Having recently completed my first year as President and Chief Executive Officer of this iconic company, I believe Curtiss-Wright is truly at an inflection point that will drive long-term value for our shareholders.

Over the course of this past year, we have increased our focus on collaboration and innovation, while leveraging the critical mass of One Curtiss-Wright across the enterprise, to identify and unlock new sources of value for our customers.

Since the onset of the COVID-19 pandemic, our unwavering focus has been on striking a balance between doing everything we can to maintain a safe and healthy workplace and adapting our business for the unprecedented challenges facing global economies.

Further, our team has proven extremely capable of managing through the global supply chain challenges and inflationary impacts on our business, strengthening our leading market positions and driving increased efficiency across our global operations which remain critical to the Company’s long-term success.

As evidenced by our strong financial performance in fiscal year 2021, we continue to build upon on our strong foundations of operational excellence and financial discipline, which enabled us to achieve a record 17% adjusted operating margin in 2021 and deliver record returns to our shareholders.

Curtiss-Wright remains well-positioned to drive tremendous value for all of our stakeholders, and we look forward with confidence to deliver on the next phase of our journey.

Pivot to Growth Strategy

Our new Pivot to Growth strategy presented during our May 2021 Investor Day focuses on maximizing revenue and operating income growth for our shareholders. Since early 2021, we have implemented numerous steps under this new strategy, including the simplification of our story and business model where we transitioned to a new and more cohesive segment and end market structure. This, in turn, positions us to further unlock shareholder value.

Curtiss-Wright is an integrated business that provides highly engineered products, solutions and services with two-thirds of our sales to Aerospace & Defense (A&D) markets, as well as critical technologies in demanding Commercial Power, Process and Industrial markets.

Importantly, Curtiss-Wright is differentiated because we have strength in the combined portfolio benefitting from long-term stability in our defense businesses and agility in our commercial businesses.

Our Pivot to Growth strategy is centered on a renewed drive for top line acceleration through both organic and inorganic sales growth, building on the strengths across our A&D and Commercial markets, deepening and expanding our customer relationships by driving One Curtiss-Wright to the customer, and maintaining our disciplined approach to acquisitions.

We see strong growth opportunities in each of our segments, not simply in the short-term, but for years to come, given the significant potential to build upon crossover technologies that leverage the strength of our combined portfolio where, for example, we have critical technologies in our commercial markets which can be pulled through into our defense markets to meet our customers’ future needs.

We have continued opportunities within our new Operational Growth Platform for margin expansion while driving continued investments in Research and Development (R&D) to fuel the innovation engine. Further, this new platform builds upon our strong track record of operational excellence and financial discipline, and refocuses our efforts to drive profitable growth which will continue to play a key role in driving Curtiss-Wright’s robust cash flow generation.

It’s truly been exciting to see that team members across Curtiss-Wright have embraced the strategy and collaborative efforts to increase the innovation across the company, while our leadership team focuses on our alignment to critical technologies and directing those R&D investments towards the highest and best use.

At our 2021 Investor Day event, we also established new long-term targets for the three-year period ending in 2023:

• 5 - 10% Total Revenue CAGR
(inclusive of 3 - 5% organic growth)

• Operating Income Growth > Revenue Growth
(which implies continued Operating Margin expansion)

• Maintaining Top Quartile Operating Margin
(relative to our peers)

• 10% (or Greater) Adjusted diluted EPS CAGR, and

• Greater than 110% average Free Cash Flow conversion

In support of our new strategy, we remain focused on driving our operations to achieve financial excellence and will utilize our strong balance sheet to execute disciplined capital allocation, to achieve top quartile performance as compared to our peer group and enhance shareholder value.

Delivering Strong 2021 Financial Performance

Adjusted sales increased 7% to $2.5 billion, as we leveraged the strength and resilience of our combined portfolio to minimize the impact of the challenging supply chain environment. This performance was driven by solid growth in our A&D markets, including the contribution from our PacStar acquisition, as well as growth in our Commercial markets, most notably within General Industrial which rebounded to pre-pandemic levels in 2021, one year ahead of expectations. Order activity was particularly strong in the second half of 2021, driving full-year orders up 11% overall and providing confidence in our future growth outlook.

Adjusted operating income improved 12% to $420 million, while adjusted operating margin increased 70 basis points to a record 17.0% as we achieved our margin objective one full year ahead of schedule. This performance reflects our continued strong execution on higher sales and the benefits of our ongoing company-wide operational excellence initiatives, as we continued to reinvest into our innovation pipeline, to the tune of $14 million, or 60 basis points, in incremental R&D this past year.

We achieved adjusted diluted earnings per share of $7.34, up 11%, reflecting our overall strong operational performance, as well as the benefit of our ongoing share repurchase activity.

Our operational execution has also played a key role in driving solid free cash flow generation. In addition, based on our strong profitability and our continued efforts to reduce working capital, we generated $347 million in adjusted free cash flow, driving an adjusted free cash flow conversion of 116%. This represented our ninth consecutive year achieving more than 100% free cash flow conversion.

Our strong full year 2021 results and share price performance are early proof points that our Pivot to Growth strategy is working.

Disciplined and Balanced Capital Allocation Strategy

We continue to utilize our strong and healthy balance sheet to implement a disciplined and balanced approach to capital allocation.

As we stated at our investor day, acquisitions have been and will continue to remain our highest priority for capital allocation under our Pivot to Growth strategy, supplemented by continued steady distributions to our shareholders, most often through share repurchases, as well as steady reinvestment in our business.

We have a strong track record of successful acquisitions, supplementing our existing portfolio with critical adjacent technologies to enhance our customer offering, with five of our last six transactions primarily serving our A&D markets. We utilize a stringent process whereby each property must be the right strategic and financial fit to help grow our top- and bottom-line faster – while not allowing for long-term deterioration of our financial metrics.

In 2021, we firmly delivered on our commitment to drive returns to our shareholders by completing record annual share repurchases of $350 million, including opportunistically deploying our capital to buybacks, while also maintaining a consistent pace of dividend payouts, including a 6% increase in the quarterly dividend during 2021.

With our continued focus on working capital and strong free cash flow generation, we concluded last year with approximately $1.6 billion of borrowing capacity, providing the financial flexibility that will enable us to pursue our long-term growth strategies.

In early 2022, we announced our pending acquisition of Safran’s aerospace arresting systems business for $240 million, which will increase the breadth and market leading position of our global defense portfolio. Additionally, we are continuing to invest in organic growth, with another $8 million incremental increase in research and development investment planned in 2022. Lastly, we expect to repurchase a minimum of $50 million in shares in 2022.

Our continued ability to deliver solid earnings growth and free cash flow have enabled us to consistently provide a steady and solid return to our shareholders.

Promoting Corporate Sustainability

We believe that a commitment to positive Environmental, Social and Governance (ESG) related business practices strengthens our operations, increases our connection with all stakeholders, and helps us better serve our customers and the communities in which we operate. On the following pages, we will provide a few examples of how Curtiss-Wright’s technologies are supporting the drive for clean, carbon-free energy.

As a global company, we are committed to reducing our environmental impact, and I would highlight that Curtiss-Wright has achieved an MSCI ESG rating of A based on our continuous improvement in sustainability. We strive to protect the environment by conserving energy and water, minimizing waste and emissions, and promoting recycling and renewable energy to reduce adverse environmental impacts. We continue to establish an energy baseline from which to track energy usage and spend; this data will be used to calculate greenhouse gas (GHG) emissions in accordance with industry standards. We anticipate disclosing such climate change data by the end of 2023, once we have compiled three full years of energy data.

We are putting greater emphasis on diversity, equity and inclusion, talent acquisition and development, and the overall employee experience at Curtiss-Wright, which in turn, creates a richer culture, enhances performance and attracts the best talent.

Looking Ahead with Confidence

As always, I would like to thank our approximately 7,800 employees for their unwavering focus and commitment for making this past year a strong success, as well as our stakeholders for your continued support of Curtiss-Wright.

Our team has displayed tremendous resiliency and execution over the past few years while faced with continued global challenges, providing me with confidence in our ability to deliver strong operational and financial performance in 2022.

Looking ahead, we remain on track to achieve our 3-year financial targets for 2023, and through our Pivot to Growth strategy, we will deliver exceptional, long-term value to all of our stakeholders.