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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 1-134
CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-0612970
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(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
4 Becker Farm Road, Roseland, NJ 07068
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (973) 597-4700
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------------ ------------------------
Common Stock, par value $1 per share New York Stock Exchange
Class B Common Stock, par value $1 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]
Page 1
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates* of the
Registrant is $594,292,905 (based on the closing price of the Registrant's
Common Stock and Class B Common Stock on the New York Stock Exchange on March
14, 2003 of $59.79 and $57.89, respectively).
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock, as of the latest practicable date.
Number of Shares
Class Outstanding at March 14, 2003
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Common Stock, par value $1 per share 5,905,585
Class B Common Stock, par value $1 per share 4,382,116
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders of the Registrant for the year
ended December 31, 2002 are incorporated by reference into Parts II, III, and
IV. Portions of the Proxy Statement of the Registrant with respect to the 2003
Annual Meeting of Stockholders are incorporated by reference into Part III.
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* All directors and executive officers of the Registrant have been excluded from
the amount shown solely because of the definition of the term "affiliate" in the
regulations promulgated pursuant to the Securities Exchange Act of 1934. The
Registrant disclaims that any of such directors or officers is an affiliate. See
material referred to under Item 12, below.
Page 2
INDEX TO FORM 10-K
PART I
Forward-Looking Information
Introduction
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Controls and Procedures
PART IV
Item 15. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
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FORWARD-LOOKING INFORMATION
Except for historical information, this Annual Report on Form 10-K may be deemed
to contain "forward-looking" information. Examples of forward-looking
information include, but are not limited to, (a) projections of or statements
regarding return on investment, future earnings, interest income, other income,
earnings or loss per share, investment mix and quality, growth prospects,
capital structure and other financial terms, (b) statements of plans and
objectives of management, (c) statements of future economic performance, and (d)
statements of assumptions, such as economic conditions underlying other
statements. Such forward-looking information can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "anticipates," or the negative of any of the foregoing or other
variations thereon or comparable terminology, or by discussion of strategy. No
assurance can be given that the future results described by the forward-looking
information will be achieved. Such statements are subject to risks,
uncertainties, and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
information. Such statements in this Annual Report include, without limitation,
those contained in (a) Item 1. Business, (b) Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations and (c) Item 8.
Financial Statements and Supplementary Data including, without limitation, the
Environmental Matters Note. Important factors that could cause the actual
results to differ materially from those in these forward-looking statements
include, among other items, the Corporation's successful execution of internal
performance plans; performance issues with key suppliers, subcontractors and
business partners; the ability to negotiate financing arrangements with lenders;
legal proceedings; changes in the need for additional machinery and equipment
and/or in the cost for the expansion of the Corporation's operations; product
demand and market acceptance risks; the effect of economic conditions; the
impact of competitive products and pricing; product development,
commercialization and technological difficulties; unanticipated environmental
remediation expenses or claims; capacity and supply constraints or difficulties;
an inability to perform customer contracts at anticipated cost levels; changing
priorities or reductions in the U.S. government defense budget; contract
continuation and future contract awards; U.S. international military budget
constraints and determinations; and other factors that generally affect the
business of companies operating in the Corporation's segments.
Introduction
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Pursuant to the Securities Exchange Act of 1934, the Registrant,
Curtiss-Wright Corporation hereby files its Annual Report on Form 10-K for the
fiscal year ended December 31, 2002. References in the text to the
"Corporation," "Company," "Curtiss-Wright" or the "Registrant" include
Curtiss-Wright Corporation and its consolidated subsidiaries unless the context
indicates otherwise. References to the Corporation's "Annual Report" are to its
2002 Annual Report to Stockholders, which is attached hereto as Exhibit 13.
Page 4
PART I
Item 1. Business.
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Business Description
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Curtiss-Wright Corporation was incorporated in 1929 under the laws of the
State of Delaware. The Company reports its operations in three Segments: Motion
Control, Flow Control and Metal Treatment.
Motion Control
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The motion control segment consists of three main operating divisions that
design, develop, manufacture and maintain sophisticated, high performance
mechanical systems, drive systems and electronic controls and sensors for
aerospace, ground defense, and industrial equipment applications.
The mechanical systems division designs, manufactures and repairs
electro-mechanical and hydro-mechanical actuation components and systems, which
are designed to position aircraft control surfaces, or to operate canopies,
cargo doors, weapons bay doors or other devices used on aircraft. Aircraft
applications include actuators and control systems and sensors for the Boeing
737, 747, 757, 767, 777, Airbus A320, A330 and A340, civil air transports and,
the Lockheed Martin F-16 Falcon fighter, the Boeing F/A-18 Hornet fighter, the
F-22 Raptor fighter, jointly developed by Lockheed Martin and Boeing, the Bell
Boeing V-22 Osprey, and the Sikorsky Black Hawk and Seahawk helicopters. Motion
Control is also developing flight control actuators for the Engineering and
Manufacturing Development phase of Lockheed Martin's F-35 Joint Strike Fighter
program. The F-35 is the next generation fighter aircraft being designed for use
by all three branches of the U.S. military as well as several foreign
governments. The U.S. Air Force's Unmanned Combat Air Vehicle (UCAV) weapons bay
door system is another major development effort for the Corporation. The
manufacturing of these applications is performed at the Shelby, North Carolina
facility.
As a related service within the mechanical systems division, Curtiss-Wright
also provides commercial airlines, the military and general aviation customers
with component overhaul and repair services. The services provided include the
overhaul and repair of hydraulic, pneumatic, mechanical, electro-mechanical, and
electronic components, aircraft parts sourcing, and component exchange services
for a wide array of aircraft. The division provides these services from
facilities in Gastonia, North Carolina; Miami, Florida; and a marketing and
distribution facility in Singapore. The division also sells a commercial rescue
tool using its "Power Hinge"'TM' aerospace technology under the trademark Power
Hawk'r'. Various accessories and related equipment are also offered for the
Power Hawk'r'. The primary use for this tool is the extrication of automobile
accident victims.
Page 5
The mechanical systems division markets its aerospace products using a
direct sales force. These products are sold in competition with a number of
other suppliers, some of whom have broader product lines and greater financial,
technical, and human resources. Competition is primarily on the basis of
engineering capability, quality and price and is focused on offering solutions
to perform control and actuation functions on a limited number of new production
programs. This division's overhaul and repair services are sold in competition
with a number of other overhaul and repair providers. Competition in the
overhaul and repair business is based upon quality, delivery and price.
Marketing is accomplished through independent sales representatives and by
direct sales employees.
The sensors and drives division designs, manufactures and distributes
electro-mechanical and electro-hydraulic actuation components and systems
including electronic controls design for the military tracked and wheeled
vehicle, high-speed tilting train, and commercial marine propulsion markets.
These products, which are designed and manufactured at the division's facility
in Neuhausen am Rheinfall, Switzerland, primarily consist of turret aiming and
stabilization systems and suspension systems for armored military vehicles sold
to defense equipment manufacturers, and tilting systems for high-speed train
applications. The products are sold using a direct sales force to customers
primarily in Western Europe, Southeast Asia and South Africa.
The sensors and drives division expanded in April 2002 with the acquisition
of the stock of Penny and Giles Controls Ltd., Penny & Giles Controls Inc.,
Penny and Giles Aerospace Ltd., the assets of Penny & Giles International Plc
devoted to its aerospace component business, and the assets of Autronics
Corporation. Collectively, the acquired companies develop and manufacture
position and fire detection sensors and systems, electronic control hardware,
air data computers, joysticks and other electronics for the military and
commercial aerospace and industrial markets.
Penny & Giles and Autronics sell their products primarily to prime
contractors and system integrators, both directly and through a network of
independent sales representatives on a world-wide basis.
The electronics division designs, develops and manufactures
mission-critical electronic control systems primarily for defense markets. This
division's products are manufactured at our Vista Controls Littleton,
Massachusetts and Santa Clarita, California facilities. Products include
electronic components and subsystems used in fire control, aiming and
stabilization, munitions loading and environmental processors for military
ground vehicles. They provide electronic subsystems for the demanding combat
platforms in existence today including the Bradley fighting vehicle, the Abrams
M1A2/A3 tank, and the Brigade Combat Team Interim Armored Vehicle, which is in
the U.S. Army's modernization and transformation efforts. They also provide the
mission management and flight control computers used on the U.S. Air Force
Global Hawk, a high-altitude and high endurance unmanned aerial vehicle. In
February 2002, the Corporation signed a licensing agreement with Viisage
Technology, Inc. ("Viisage"), a leader in facial-recognition technology and
identification systems, to market and sell their facial-recognition solutions to
all agencies associated with the U.S. Department of Defense. Viisage is a
related party of the former owner of Vista.
Page 6
Vista sells their products primarily to the prime contractors and subsystem
suppliers, both directly and through a network of independent sales
representatives. The addition of these companies provides a North American base
of operations for our ground defense vehicle business, while offering
opportunities to market and sell additional products to our existing aerospace
customers.
Sales by this segment to the Boeing Company in 2002, 2001, and 2000
accounted for 15%, 32% and 33%, respectively, of total segment sales. The loss
of the Boeing Company as a customer would have a material adverse effect on this
segment. U.S. Government direct and end use sales of this segment in 2002, 2001
and 2000, accounted for 46%, 26% and 17%, respectively, of total segment sales.
The loss of this business would also have a material adverse affect on this
segment.
The backlog of this segment as of January 31, 2003 was $166.2 million as
compared with $165.2 million as of January 31, 2002. Of the January 31, 2003
backlog, approximately 86% is expected to be shipped during 2003. None of the
business of this segment is seasonal. Raw materials are generally available in
adequate quantities from a number of suppliers.
Flow Control
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This segment consists of eight operating divisions that design,
manufacture, distribute, and service a broad range of highly engineered flow
control products for severe service military and commercial applications.
At its Target Rock facility located in East Farmingdale, New York, this
segment designs, manufactures, refurbishes and tests highly engineered valves of
various types and sizes, such as motor operated and solenoid operated globe,
gate, control and safety relief valves. These valves are used to control the
flow of liquids and gases and to provide safety relief in high-pressure
applications. This division also supplies actuators and controllers for its own
valves as well as for valves manufactured by its competitors. The primary
customers for these valves are the U.S. Navy, which uses them in nuclear
propulsion systems, and owners and operators of commercial power utilities who
use them in new and existing nuclear and fossil fuel power plants. All new
nuclear plants are outside the U.S. and recent sales for such plants have been
in Korea and Taiwan. Sales are made by responding directly to requests for
proposals from customers. The production of valves for the U.S. Navy and for new
power plants is characterized by long lead times from order placement to
delivery.
Through its Enertech operation, the division designs, manufactures, and
distributes flow control products for sale into global commercial nuclear power
markets from its facility in Brea, California. Enertech's product lines include:
snubbers, advanced valves, valve actuators, pumps, test and diagnostic
equipment, as well as related diagnostic services. In addition, this operation
provides training, on-site services, staff augmentation and engineering programs
relating to nuclear power plants. This operation also provides hydraulic power
units and components primarily for the automotive and entertainment industries.
Page 7
Flow Control's Farris Engineering ("Farris") operation is one of the
world's leading manufacturers of spring-loaded and pilot operated
pressure-relief valves for the processing industries. Farris' primary customers
are refineries, petrochemical/chemical plants and pharmaceutical manufacturing
facilities. Farris products are manufactured in Brecksville, Ohio and Brantford,
Ontario.
Sprague Products ("Sprague"), also located in Brecksville, Ohio,
manufactures and provides specialty hydraulic and pneumatic valves, air-driven
pumps and gas boosters under the "Sprague" and "PowerStar" trade names. Sprague
products are used generally in various industrial applications as well as in
directional control valves for truck transmissions and car transport carriers.
The segment further expanded its product lines and distribution base
through the acquisitions of Solent & Pratt Engineering Ltd. ("S&P"), Peerless
Instrument Co. ("Peerless") and Deltavalve USA, LLC ("Deltavalve") in 2001 and
the Electro-Mechanical Corporation division ("EMD") and TAPCO International,
Inc. ("TAPCO") during 2002.
From its facility in Bridport, England, S&P manufactures high performance
butterfly valves and is a global supplier to the petroleum, petrochemical,
chemical and process industries.
Peerless designs, develops, manufactures, tests and services specialized
instrumentation and control equipment primarily for the U.S. Nuclear Naval
program. During March 2003, Peerless relocated its facility from Elmhurst, New
York to East Farmingdale, New York.
Deltavalve designs, engineers, and manufactures metal-seated industrial
valves used in standard and advanced applications including high-cycle,
high-pressure, extreme temperature, and corrosive plant environments. Through
the use of new innovative technology, this division developed the DeltaGuard'TM'
valve, which improves the process for unloading the by-product of the crude oil
refining process. Deltavalve is located in Salt Lake City, Utah with an assembly
and testing facility in Calgary, Alberta, Canada.
In October 2002, the segment acquired EMD, located in Cheswick, PA. EMD is
a world leader in the development, design, manufacturing and qualification of
critical function electro-dynamic solutions for the United States Navy, and the
commercial nuclear utility industry through its relationship with Westinghouse
Electric Company. The division designs and manufactures secondary propulsion
systems, control rod drive mechanisms, and power conditioning electronics.
Additionally, EMD is strengthening its relationship with the Navy by teaming
with Northrop Grumman in the design and development of major subsystems for the
Navy's Naval Air System Control Electro-Mechanical Aircraft Launch System
(EMALS) for installation in its aircraft carrier fleet.
TAPCO designs, engineers and manufactures high-performance metal seated
industrial gate valves, butterfly valves, flapper valves, actuators, and
internal components used in high-temperature, highly abrasive, and highly
corrosive environments in the petrochemical refining industry. It also provides
inspection, installation, repair and maintenance, and other field
Page 8
services for harsh environment flow control systems. TAPCO's main operating
facility is located in Houston, Texas. TAPCO also has a small operation in the
UK to serve the European market.
Strong competition in flow control products and services is encountered
from a large number of domestic and foreign sources. Competition occurs on the
basis of technical expertise, price, delivery, contractual terms, previous
installation history and reputation for quality. Delivery speed and the
proximity of service centers are important with respect to after-market
products. Sales to commercial users are accomplished by a combination of direct
sales employees and manufacturers' representatives located in our primary market
areas. This representation provides sales coverage of nuclear power utilities,
principle boiler and reactor builders, architectural engineers, and hydrocarbon
processing industry and chemical processing industry plants worldwide. For it's
military contracts, the segment receives requests for quotes from prime
contractors as a result of being an approved supplier for Naval Propulsion
System Pumps and Valves. An outside sales engineer supports non-nuclear sales
activities. The segment uses the direct distribution basis for military &
commercial valves and associated spare parts.
The backlog of this segment as of January 31, 2003 was $349.4 million as
compared with $81.4 million as of January 31, 2002. Of the January 31, 2003
backlog, approximately 75% is expected to be shipped during 2003. Approximately
33% of this segment's backlog is comprised of orders with the U.S. Navy through
its prime contractor, the Plant Apparatus Division of Bechtel Plant Machinery,
Inc., ("Bechtel") a unit of Bechtel Group, Inc. Sales by this segment to Bechtel
accounted for 30% and 22% of total segment sales in 2002 and 2001, respectively.
The loss of this customer would have a material adverse effect on the business
of this segment. None of the business of this segment is seasonal. Raw materials
are generally available in adequate quantities from a number of suppliers.
Metal Treatment
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This segment of Curtiss-Wright provides approximately 50 metal-treating
services, with its principal services being "shot-peening" and "heat-treating."
"Shot-peening" is the process by which the durability of metal parts are
improved by the bombardment of the part's surface with spherical media such as
steel shot, ceramic or glass beads to compress the outer layer of the metal.
"Heat-treating" is a metallurgical process of subjecting metal objects to heat
and/or cold, or otherwise treating the material to change the physical and/or
chemical characteristics or properties of the material. These processes are used
principally to improve the service life, strength and durability of metal parts.
They are also used to form curvatures in metal panels, which are assembled as
wingskins of commercial and military aircraft, and to manufacture reed valves
used in compressors. The segment provides these services to a broad spectrum of
customers in various industries, including aerospace, automotive, construction
equipment, oil, petrochemical, and metal working. Through a combination of
acquisitions and new plant openings, this segment continues to increase its
network of regional facilities. Operations are now conducted from 44 facilities
located in the United States, Canada, England, France, Germany, Sweden and
Belgium.
Page 9
In addition to shot-peening and heat-treating, other products and services
include lasershot peening, anodizing, chemical milling, and engineering/testing
and field services. In 2002, this segment expanded its reach with the opening of
a fourth shot-peening facility in Germany and a lasershot peening facility in
California and with the acquisition of a shot-peening facility in Sweden and an
aerospace metal finishing facility in New Jersey.
Working extensively with the Lawrence Livermore National Laboratory, the
Metal Treatment segment is developing an advanced metal surface treatment
process utilizing laser technology. The new laser process is already being used
in production to extend the life of critical turbine engine components. Future
applications include additional turbine engine components and potentially wing
skin forming, allowing for placement of more extreme aerodynamic curvatures of
wing skins of greater thickness.
The services and products of this segment are marketed directly by
employees of the segment. Although numerous companies compete with the segment
in this field and many customers have the resources to perform such services
themselves, Curtiss-Wright believes that its greater technical knowledge and
quality of workmanship provide a competitive advantage. The segment competes on
the basis of quality, service and price.
The backlog of this segment as of January 31, 2003 and 2002 was $1.1
million for both periods. All of such backlog is expected to be shipped in the
first quarter of 2003. The services of this segment are sold with very modest
lead times and accordingly, the backlog of this segment is not indicative of
future sales. The business of this segment is not seasonal. Raw materials are
generally available in adequate quantities from a number of suppliers, and the
segment is not materially dependent upon any single source of supply. No single
customer accounted for 10% or more of total sales in 2002 and 2000; however,
Airbus UK accounted for 13% of total sales in 2001. The loss of this customer
would have a material adverse effect on this segment. The active customer base
numbers are in excess of 5,000.
Other Information
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Government Sales
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From 2000 to 2002, the Corporation's direct sales to the U.S. Government
and sales for U.S. Government and foreign government end use averaged
approximately 29% of consolidated sales over those three years. However, due to
acquisitions in 2001 and 2002, the percentage of government sales has increased
from 17% in 2000 to 39% in 2002 and is expected to increase slightly in 2003.
U.S. Government sales, both direct and indirect, are generally made under
standard types of government contracts, including fixed price and fixed
price-redeterminable.
In accordance with normal practice in the case of U.S. Government business,
contracts and orders are subject to partial or complete termination at any time,
at the option of the customer. In the event of a termination for convenience by
the government, there generally are provisions for recovery by the Corporation
of its allowable incurred costs and a proportionate share of the profit
Page 10
or fee on the work completed, consistent with regulations of the U.S.
Government. Contracts for Navy nuclear programs usually provide that
Curtiss-Wright absorb most of any cost overrun. In the event that there is a
cost underrun, the customer recoups a portion of the underrun based upon a
formula in which the customer's portion increases as the underrun exceeds
certain established levels.
It is the policy of the Corporation to seek customary progress payments on
certain of its contracts. Where such payments are obtained by the Corporation
under U.S. Government prime contracts or subcontracts, they are secured by a
lien in favor of the government on the materials and work in process allocable
or chargeable to the respective contracts. (See Notes 1.G, 6 and 7 to the
Consolidated Financial Statements, on pages 35, 40 and 41, respectively, of the
Registrant's Annual Report, which notes are incorporated by reference in this
Annual Report on Form 10-K.) In the case of most Motion Control and Flow Control
products for U.S. Government end use, the contracts typically provide for the
retention by the customer of stipulated percentages of the contract price,
pending completion of contract closeout conditions.
Research and Development
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Research and development expenditures incurred by the Corporation amounted
to $11.6 million in 2002 as compared with $4.4 million in 2001 and $3.4 million
in 2000. The Corporation owns and is licensed under a number of United States
and foreign patents and patent applications, which have been obtained or filed
over a period of years. Curtiss-Wright does not consider that the successful
conduct of its business is materially dependent upon the protection of any one
or more of the patents, patent applications or patent license agreements under
which it now operates.
Environmental Protection
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The effect of compliance upon the Corporation with present legal
requirements concerning protection of the environment is described in Notes 1.N
and 16 to the Consolidated Financial Statements which appear on pages 36 and 47
to 48, respectively, of the Registrant's Annual Report and is incorporated by
reference in this Annual Report on Form 10-K.
Employees
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At the end of 2002, the Corporation had 4,244 employees, 916 of which were
represented by labor unions and are covered by collective bargaining agreements.
Certain Financial Information
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The industry segment information is described in Note 19 to the
Consolidated Financial Statements, which appears on pages 50 to 52 of the
Registrant's Annual Report, and is incorporated by reference in this Annual
Report on Form 10-K. In 2002, 2001, and 2000, foreign operations of the
Corporation generated 22.9%, 17.8%, and 26.4%, respectively, of the
Page 11
Corporation's pre-tax earnings. The Corporation does not regard the risks
associated with these foreign operations to be materially greater than those
applicable to its business in the U.S.
Item 2. Properties.
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The principal physical properties of the Corporation and its subsidiaries
as of January 1, 2003 are described below:
Owned/
Location Description (1) Leased Segment
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Cheswick, 630,000 sq. ft. Owned Flow Control
Pennsylvania on 114 acres
East Farmingdale, 215,000 sq. ft. Owned(2) Flow Control
New York on 11 acres
Chester, Wales 200,107 sq. ft. Owned Metal Treatment
United Kingdom
Shelby, 137,440 sq. ft. Owned Motion Control
North Carolina on 29 acres
Bensalem, 128,000 sq. ft. Leased Metal Treatment
Pennsylvania
Bensalem, 89,100 sq. ft. Owned Metal Treatment
Pennsylvania on 4.18 acres
Brampton, Ontario, 86,650 sq. ft. Owned Metal Treatment
Canada on 8 acres
Christchurch, Dorset 80,900 sq. ft Owned(3) Motion Control
United Kingdom
Columbus, 74,500 sq. ft. Owned Metal Treatment
Ohio on 9 acres
Brecksville 68,000 sq. ft. Owned Flow Control
Ohio on 5.56 acres
Miami, 65,000 sq. ft. within a Leased Motion Control
Florida business complex
Page 12
Owned/
Location Description (1) Leased Segment
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Fort Wayne, 62,589 sq. ft. Owned Metal Treatment
Indiana on 3.2 acres
Littleton, 61,000 sq. ft. within a Leased Motion Control
Massachusetts business complex
Elmhurst, 55,000 sq. ft. Leased Flow Control
New York (4)
Gastonia, 52,860 sq. ft. Owned Motion Control
North Carolina on 7.5 acres
Cwmfelinfach, Wales, 52,500 sq. ft. Leased Motion Control
United Kingdom
Valencia, 51,061 sq. ft. Leased Motion Control
California
Irwindale, 47,604 sq. ft. Leased Motion Control
California
Neuhausen am, 47,350 sq. ft. within a Leased Motion Control
Rheinfall, Switzerland business complex
Houston, 45,000 sq. ft. Leased Flow Control
Texas
Pine Brook, 45,000 sq. ft. within a Leased Motion Control
New Jersey business complex
Mt. Pleasant, 37,000 sq. ft. Leased Flow Control
Pennsylvania
Romulus, 35,840 sq. ft. Leased Metal Treatment
Michigan
York, 32,396 sq. ft. Owned Metal Treatment
Pennsylvania on 3.6 acres
Derby, 32,000 sq. ft. Owned Metal Treatment
United Kingdom
Page 13
Owned/
Location Description (1) Leased Segment
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Dallas, 31,100 sq. ft. Owned Metal Treatment
Texas
Brea, 30,550 sq. ft. Leased Flow Control
California
Lafayette, 30,000 sq. ft. Owned Metal Treatment
Louisiana
Wichita, 30,000 sq. ft. Leased Metal Treatment
Kansas
(1) Sizes are approximate. Unless otherwise indicated, all properties are
owned in fee, are not subject to any major encumbrance, and are occupied
primarily by factory and/or warehouse operations.
(2) The Bank of New York, as successor trustee for the Suffolk County
Industrial Development Agency, has a Uniform Commercial Code lien on
approximately six acres of land and the building located thereon in
connection with the issuance of industrial revenue bonds.
(3) The Corporation owns the building and has a long-term lease for the land.
(4) During March 2003, Flow Control's Peerless operating division moved its
operations from Elmhurst, NY to East Farmingdale, NY.
In addition to the properties listed above, the Corporation leases an
aggregate of approximately 398,000 square feet of space at thirty different
locations in the United States, Canada, England, Germany, and Sweden and owns
buildings encompassing about 339,000 square feet in seventeen different
locations in the United States, Canada, France, Germany, Korea, Belgium and
England. None of these properties individually are material to the Corporation's
business.
As of December 31, 2002, the Corporation leased approximately 14,000 square
feet of space in Lyndhurst, New Jersey, for its corporate office. On February
28, 2003, the Corporation terminated this lease and moved its corporate
headquarters to Roseland, NJ, where it leases approximately 18,700 square feet
of office space.
The buildings on the properties referred to in this Item are well
maintained, in good condition, and are suitable and adequate for the uses
presently being made of them.
Page 14
The Registrant currently owns 450,000 square feet of space situated on 39.8
acres of property located in Fairfield, New Jersey (the "Fairfield Property").
The Fairfield Property is being held for sale and the Corporation continues to
review third party proposals to purchase the Fairfield Property. On December 20,
2001 the Corporation sold its Wood-Ridge Business Complex for $51 million, which
is located in Wood-Ridge, New Jersey. The business complex comprised
approximately 2.3 million square feet of rental space situated on 138 acres of
land. In January 2002, the Corporation sold 21 acres of land located in Hardwick
Township, New Jersey. In September 2002, the Corporation sold approximately 7.4
acres of land in Lyndhurst, New Jersey.
Item 3. Legal Proceedings.
- --------------------------
In the ordinary course of business, the Corporation and its subsidiaries
are subject to various pending claims, lawsuits and contingent liabilities. The
Corporation does not believe that disposition of any of these matters will have
a material adverse effect on the Corporation's consolidated financial position
or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
Not applicable.
PART II
Item 5. Market for the Registrant's Common Stock
And Related Stockholder Matters.
- ------------------------------------------------
See the information contained in the Registrant's Annual Report on the
inside back cover under the captions "Stock Price Range," "Dividends," and
"Stock Exchange Listing" which information is incorporated herein by reference.
The approximate total number of record holders of the Common Stock, $1.00 par
value, and the Class B Common Stock, $1.00 par value, of the Registrant was
7,980 as of March 14, 2003.
Item 6. Selected Financial Data.
- ---------------------------------------
See the information contained in the Registrant's Annual Report on page 20
under the caption "Consolidated Selected Financial Data," which information is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
- ---------------------------------------------------------
See the information contained in the Registrant's Annual Report on pages 21
through 28, under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which information is incorporated herein
by reference.
Page 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
- --------------------------------------------------------------------
See the information contained in the Registrant's Annual Report on page 29,
under the caption "Quantitative and Qualitative Disclosures About Market Risk,"
which information is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
- ----------------------------------------------------
The following Consolidated Financial Statements of the Registrant and its
subsidiaries, and supplementary financial information, are included in the
Registrant's Annual Report, which information is incorporated herein by
reference.
Consolidated Statements of Earnings for the years ended December 31, 2002,
2001, and 2000, page 31.
Consolidated Balance Sheets at December 31, 2002 and 2001, page 32.
Consolidated Statements of Cash Flows for the years ended December 31,
2002, 2001, and 2000, page 33.
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 2002, 2001, and 2000, page 34.
Notes to Consolidated Financial Statements, pages 35 through 53, inclusive,
and Quarterly Results of Operations, page 20.
Report of Independent Accountants for the years ended December 31, 2002,
2001, and 2000, page 30.
Item 9. Changes in and Disagreements with Accountants
On Accounting and Financial Disclosure.
- -----------------------------------------------------
Information required by this Item is included in the Registrant's Form 8-K
filed on March 26, 2002, which information is incorporated herein by reference.
PART III
Item 10. Directors and Executive Officers
Of the Registrant.
- ------------------------------------------
Information required in connection with directors and executive officers is
set forth below, as well as under the caption "Election of Directors," in the
Registrant's Proxy Statement with respect to the Corporation's 2003 Annual
Meeting of Stockholders (the "Proxy Statement"), which information is
incorporated herein by reference.
Page 16
Executive Officers of the Registrant
------------------------------------
The following table sets forth the names, ages, and principal occupations
and employment of all executive officers of the Registrant. The period of
service is for at least the past five years and such occupations and employment
are with Curtiss-Wright Corporation, except as otherwise indicated:
Principal Occupation
Name and Employment Age
- ---------------------------------------------------------------------------------------------------
Martin R. Benante Chairman of the Board of Directors 50
and Chief Executive Officer since April
2000; formerly President and Chief
Operating Officer from April 1999 to
April 2000; formerly Vice President of the
Corporation from April 1996 to April 1999;
President of Curtiss-Wright Flow
Control Corporation, a wholly-owned
subsidiary from March 1995 to April 1999
George J. Yohrling Executive Vice President since May 2001; 62
President, Curtiss-Wright Controls,
Inc., a wholly-owned subsidiary, since April
1998; Executive Vice President for
Aerospace Operations of Curtiss-Wright
Controls, Inc. from April 1997 to April 1998;
Senior Vice President from July 1996 to April
1997 of Curtiss-Wright Controls, Inc.;
Vice President and General Manager of Curtiss-
Wright Controls/Shelby, Inc.,
then a wholly-owned subsidiary, since 1985.
Joseph Napoleon Executive Vice President since May 2001; 56
President, Curtiss-Wright Flow Control
Corporation, a wholly-owned subsidiary,
since August 1999; Vice President and General
Manager of Curtiss-Wright Flow Control
Corporation from April 1999 to August 1999;
Vice President, Curtiss-Wright Flow Control
Corporation from October 1995 to April 1999.
Edward Bloom Vice President since June 2002; President of 61
Metal Improvement Company, Inc., a wholly-
owned subsidiary, since June 2002; formerly
Executive Vice President of Metal Improvement
Company, Inc. from December 1995 to June 2002.
Page 17
Principal Occupation
Name and Employment Age
- ----------------------------------------------------------------------------------------------------
Glenn E. Tynan Vice President of Finance and Chief 44
Financial Officer since June 2002;
Controller from June 2000 to May 2002; Vice
President and Corporate Controller of the
Movado Group from 1999 to 2000; Corporate
Controller of Dexter Corporation from 1998
to 1999; Vice President Finance and
Controller of Lightolier from 1995 to 1998.
Michael Denton Secretary and General Counsel since August 47
2001; Corporate Counsel of Honeywell
International, Inc. (previously AlliedSignal
Inc.) from 1993 to 2001.
Gary J. Benschip Treasurer since February 1993. 55
Kevin McClurg Corporate Controller since September 2002; 37
Assistant Controller from February 2002 to
September 2002; Director of Accounting of
Toys R Us, Inc. until January 2002; Director
of International Reporting of Random House
from January 1998 to May 2001;
The executive officers of the Registrant are elected by the Board of
Directors at its annual organizational meeting and hold office until the
organization meeting in the subsequent year or until a respective successor is
chosen and qualified.
There are no family relationships among these officers, or between any of
them and any director of Curtiss-Wright Corporation, nor any arrangements or
understandings between any officer and any other person pursuant to which the
officer was elected.
Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
Information required by Item 405 of Regulation S-K is set forth in the
Proxy Statement under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance," which information is incorporated herein by reference.
Item 11. Executive Compensation.
- --------------------------------
Information required by this Item is included under the captions "Executive
Compensation" and in the "Summary Compensation Table" in the Registrant's Proxy
Statement, which information is incorporated herein by reference.
Page 18
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
- -------------------------------------------------------------
Information required by this Item is contained in Note 15 to the
Consolidated Financial Statements, which appears on pages 46 and 47 of
Registrant's Annual Report, and Registrant's Proxy Statement, all of which
information is incorporated herein by reference: (i) the information under the
caption "Security Ownership and Transactions with Certain Beneficial Owners" and
(ii) the information included under the caption "Election of Directors."
Item 13. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Information required by this Item is included under the captions "Executive
Compensation" and "Security Ownership and Transactions with Certain Beneficial
Owners" in the Registrant's Proxy Statement, which information is incorporated
herein by reference.
Item 14. Controls And Procedures.
- ---------------------------------
During the 90-day period prior to the filing date of this report,
management, including the Corporation's Principal Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
the Corporation's disclosure controls and procedures. Based upon, and as of the
date of that evaluation, the Principal Executive Officer and Chief Financial
Officer concluded that the disclosure controls and procedures were effective, in
all material respects, to ensure that information required to be disclosed in
the reports the Corporation files and submits under the Exchange Act is
recorded, processed, summarized and reported as and when required.
There have been no significant changes in the Corporation's internal
controls or in other factors that could significantly affect internal controls,
subsequent to the date the Chief Executive Officer and Chief Financial Officer
completed their evaluation.
PART IV
Item 15. Exhibits, Financial Statement
Schedule and Reports on Form 8-K.
- ------------------------------------------
(a)(1) Financial Statements:
The following Consolidated Financial Statements of the Registrant and
supplementary financial information, included in the Registrant's
Annual Report, are incorporated herein by reference in Item 8:
(i) Consolidated Statements of Earnings for the years ended
December 31, 2002, 2001, and 2000, page 31.
Page 19
(ii) Consolidated Balance Sheets at December 31, 2002 and 2001,
page 32.
(iii) Consolidated Statements of Cash Flows for the years ended
December 31, 2002, 2001, and 2000, page 33.
(iv) Consolidated Statements of Stockholders' Equity for the years
ended December 31, 2002, 2001, and 2000, page 34.
(v) Notes to Consolidated Financial Statements, pages 35 through
53, inclusive, and Quarterly Results of Operations, page 20.
(vi) Report of Independent Accountants for the years ended December
31, 2002, 2001, and 2000, page 30.
(a)(2) Financial Statement Schedules:
The items listed below are presented herein on pages 31 and 32 of this
Form 10-K.
Report of Independent Accountants on Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted, since they are not
required, are not applicable, or because the required information is included in
the financial statements or notes thereto.
(a)(3) Other Matters - Subsequent Events
See the information contained in the Registrant's Annual Report on page
28 under the caption "Recent Developments" and on page 53 under the
caption "Subsequent Events", which information is incorporated herein
by reference.
Exhibits:
(2) Plan of acquisition, reorganization, arrangement, liquidation, or
succession
(2)(i) Second Amended and Restated Distribution Agreement, dated as
of August 17, 2001, between the Company and Unitrin, Inc.
(incorporated by reference to Appendix A to the Registrant's
Proxy Statement Schedule on 14A with respect to the
recapitalization of the Company dated September 5, 2001).
(2)(ii) Second Amended and Restated Agreement and Plan of Merger,
dated as of August 17, 2001, among the Company,
Page 20
Unitrin, Inc., and CW Disposition Company (incorporated by
reference to Appendix B to the Registrant's Proxy Statement
Schedule on 14A with respect to the recapitalization of the
Company dated September 5, 2001).
(2)(iii) Asset Purchase and Sale Agreement dated October 25, 2001
between Lau Acquisition Corporation, Lau Defense Systems, LLC,
Vista Controls Corporation and Curtiss-Wright Corporation
(incorporated by reference to Exhibit 2.3 to the Registrant's
Quarterly Report on Form 10-Q for the period ended September
30, 2001).
(2)(iv) Real Estate Sale and Purchase Agreement dated August 2, 2001
between Curtiss-Wright Corporation, Curtiss-Wright Flight
Systems, Inc. and Shaw Achas, LLC (incorporated by reference
to Exhibit 2.1 to the Registrant's Current Report on Form 8-K,
filed January 4, 2002).
(2)(v) Addendum to Real Estate Sale and Purchase Agreement dated
September 10, 2001 by and between Curtiss-Wright Corporation,
Curtiss-Wright Flight Systems, Inc. and Shaw Achas, LLC
(incorporated by reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K, filed January 4, 2002).
(2)(vi) Share and Asset Purchase Agreement dated February 19, 2002
between Spirent Plc. and Curtiss-Wright Corporation
(incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K, filed April 15, 2002).
(2)(vii) Asset Purchase Agreement dated October 25, 2002 between
Westinghouse Government Services Company LLC and
Curtiss-Wright Corporation (incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K,
filed November 12, 2002).
(3) Articles of Incorporation and By-laws of the Registrant
(3)(i) Restated Certificate of Incorporation as amended November 29,
2001 (incorporated by reference to Appendix C-1 to
Registrant's Proxy Statement on Schedule 14A with respect to
the recapitalization of the Company dated September 5, 2001).
Page 21
(3)(ii) By-laws as amended through November 29, 2001 (incorporated by
reference to Appendix D-1 to Registrant's Proxy Statement on
Schedule 14A with respect to the recapitalization of the
Company dated September 5, 2001).
(4) Instruments defining the rights of security holders, including
indentures
(4)(i) Agreement to furnish to the Commission upon request, a copy of
any long-term debt instrument where the amount of the
securities authorized thereunder does not exceed 10% of the
total assets of the Registrant and its subsidiaries on a
consolidated basis (incorporated by reference to Exhibit 4 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1985).
(4)(ii) Revolving Credit Agreement dated May 13, 2002 between
Registrant, the Lenders parties thereto from time to time, the
Issuing Banks referred to therein and The Bank of Nova Scotia
(incorporated by reference to Exhibit 4.1 to Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31,
2002).
(4)(iii) Short-Term Credit Agreement dated May 13, 2002 between
Registrant, the Lenders parties thereto from time to time, the
Issuing Banks referred to therein and The Bank of Nova Scotia
(incorporated by reference to Exhibit 4.2 to Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31,
2002).
(4)(iv) Amended and Restated Rights Agreement, dated as of November 6,
2000, as amended and restated as of November 20, 2001, between
the Company and Mellon Investor Services LLC (f/k/a
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent,
(incorporated by reference to Exhibit 4 to the Registrant's
Report on Form 8-K, filed November 20, 2001).
(4)(v) Amendment to Restated Rights Agreement dated February 1, 2002
naming American Stock Transfer & Trust Company as Rights
Agent, (incorporated by reference to Exhibit 4(iv) to the
Registrant's Annual Report on Form 10-K, filed March 18,
2002).
(10) Material Contracts:
Page 22
(i) Modified Incentive Compensation Plan, as amended November 9,
1989 (incorporated by reference to Exhibit 10(a) to
Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 1989).*
(ii) Curtiss-Wright Corporation 1995 Long-Term Incentive Plan
(incorporated by reference to Exhibit 4.1 to Registrant's Form
S-8 Registration Statement No. 95602114 filed December 15,
1995).*
(iii) Revised Standard Employment Severance Agreement with Certain
Management of Curtiss-Wright (incorporated by reference to
Exhibit 10 to Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 2001).*
(iv) Retirement Benefits Restoration Plan as amended April 15, 1997
(incorporated by reference to Exhibit 10 to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30,
1997).*
(v) Restated and Amended Curtiss-Wright Corporation Retirement
Plan as amended through February 28, 2002, (incorporated by
reference to Exhibit (10)(v) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001).
(vi) Restated and Amended Curtiss-Wright Corporation Savings and
Investment Plan dated February 28, 2002, (incorporated by
reference to Exhibit (10)(v) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001).
(vii) Curtiss-Wright Electro-Mechanical Division Pension Plan dated
October 29, 2002, filed herewith.*
(viii) Curtiss-Wright Corporation 1996 Stock Plan for Non-Employee
Directors (incorporated by reference to Exhibit 4.1 to
Registrant's Form S-8 Registration Statement No. 96583181,
filed June 19, 1996).*
(ix) Curtiss-Wright Corporation Executive Deferred Compensation
Plan effective November 18, 1997 (incorporated by reference to
Exhibit (10)(viii) to
Page 23
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997).*
(x) Change In Control Severance Protection Agreement dated July 9,
2001 between the Registrant and Chief Executive Officer of the
Registrant (incorporated by reference to Exhibit 10.1 to
Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 2001).*
(xi) Standard Change In Control Severance Protection Agreement
dated July 9, 2001 between the Registrant and Key Executives
of the Registrant (incorporated by reference to the
Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 2001).*
(xii) Trust Agreement dated January 20, 1998 by and between
Curtiss-Wright Corporation and PNC Bank, National Association
(incorporated by reference to Exhibit 10(a) to Registrant's
Quarterly Report on Form 10-Q for the period ended March 31,
1998).*
(xiii) Consulting Agreement dated April 10, 2000 between Registrant
and David Lasky, (incorporated by reference to Exhibit
(10)(xi) to Registrant's Annual Report on Form 10-K for the
year ended December 31, 2000).*
(xiv) Standard Supplemental Retirement Agreement dated April 27,
1999 between the registrant and certain Officers of the
Registrant (incorporated by reference to Exhibit 10 to
Registrant's Quarterly Report on Form 10-Q for the period
ended June 30, 2000).*
(xv) Mutual Separation Agreement dated June 26, 2001 between Brian
D. O'Neill and Registrant, (incorporated by reference to
Exhibit (10)(xiv) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2001).*
(xvi) Mutual Separation Agreement dated November 12, 2001 between
Robert A. Bosi and Registrant, (incorporated by reference to
Exhibit (10)(xv) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2001).*
Page 24
(xvii) Consulting Agreement dated June 18, 2002 between Registrant
and Gerald Nachman (incorporated by reference to Exhibit 10.1
to Registrant's Quarterly Report on Form 10-Q for the period
ended June 30, 2002).*
(13) Annual Report to Stockholders for the year ended December 31,
2002.
(16) Letter from PricewaterhouseCoopers LLP, dated March 25, 2003
(incorporated by reference to Registrant's Form 8-K, filed
March 26, 2003).
(21) Subsidiaries of the Registrant.
(23) Consents of Experts and Counsel - see Consent of Independent
Accountants.
(99.1) Certification of Martin R. Benante, Chairman and CEO, Pursuant
to Section 906 of the Sarbanes Oxley Act of 2002, filed
herewith
(99.2) Certification of Glenn E. Tynan, Chief Financial Officer,
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,
filed herewith.
-----------
*Management contract or compensatory plan or arrangement
(b) Reports on Form 8-K
(i) On November 12, 2002 the Company filed a report on Form 8-K
reporting the acquisition of certain assets of the
Electro-Mechanical Division of Westinghouse Government
Services Company, LLC.
(ii) On December 12, 2002, the Company filed a report on Form 8-K
announcing that the assets relating to the acquisition of the
Electro-Mechanical Division of Westinghouse Government
Services Company, LLC did not meet the reporting thresholds
under Item 7 of Form 8-K.
Page 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CURTISS-WRIGHT CORPORATION
(Registrant)
Date: March 28, 2003 By: /s/ Martin R. Benante
----------------------
Martin R. Benante
Chairman and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: March 28, 2003 By: /s/ Glenn E. Tynan
------------------------------
Glenn E. Tynan
Chief Financial Officer
Date: March 28, 2003 By: /s/ Kevin McClurg
------------------------------
Kevin McClurg
Controller
Date: March 28, 2003 By: /s/ Gary J. Benschip
------------------------------
Gary J. Benschip
Treasurer
Date: March 28, 2003 By: /s/ Martin R. Benante
------------------------------
Martin R. Benante
Director
Date: March 28, 2003 By: /s/ James B. Busey IV
------------------------------
James B. Busey IV
Director
Page 26
Date: March 28, 2003 By: /s/ S. Marce Fuller
------------------------------
S. Marce Fuller
Director
Date: March 28, 2003 By: /s/ David Lasky
------------------------------
David Lasky
Director
Date: March 28, 2003 By: /s/ William B. Mitchell
------------------------------
William B. Mitchell
Director
Date: March 28, 2003 By: /s/ John R. Myers
------------------------------
John R. Myers
Director
Date: March 28, 2003 By: /s/ William W. Sihler
------------------------------
William W. Sihler
Director
Date: March 28, 2003 By: /s/ J. McLain Stewart
------------------------------
J. McLain Stewart
Director
Page 27
CERTIFICATIONS
I, Martin R. Benante, certify that:
1. I have reviewed this annual report on Form 10-K of Curtiss-Wright
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant 's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant 's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
Page 28
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 28, 2003
/s/ Martin R. Benante
- -----------------------
Chief Executive Officer
I, Glenn E. Tynan, certify that:
1. I have reviewed this annual report on Form 10-K of Curtiss-Wright
Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
Page 29
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: March 28, 2003
/s/ Glenn E. Tynan
- -----------------------
Chief Financial Officer
Page 30
PRICEWATERHOUSECOOPERS LLP [LOGO]
PricewaterhouseCoopers LLP
400 Campus Drive
P.O. Box 988
Florham Park, NJ 07932
Telephone (973) 236 4000
Facsimile (973) 236 5000
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
Of Curtiss-Wright Corporation:
Our audits of the consolidated financial statements referred to in our report
dated March 12, 2003, except for Note 21, for which the date is March 19, 2003,
appearing in the 2002 Annual Report to Shareholders of Curtiss-Wright
Corporation (which report and consolidated financial statements are incorporated
by reference in this Annual Report on Form 10-K) also included an audit of the
financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our
opinion, this financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.
/s/PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
March 12, 2003, except for Note 21,
as to which the date is March 19, 2003
Page 31
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SCHEDULE II - VALUATION and QUALIFYING ACCOUNTS
for the years ended December 31, 2002, 2001, and 2000
(In thousands)
Additions
---------------------------------
Balance at Charged to Charged to Balance at
Beginning Costs and Other Accounts Deductions End of
Description of Period Expenses (Describe) (Describe) Period
----------- --------- -------- ---------- ---------- ------
Deducted from assets to which they apply:
Year-ended December 31, 2002
- ----------------------------
Reserves for inventory obsolescence $ 14,384 $ 2,400 $8,105 (A) $ 612 (E) $24,277
Reserves for doubtful accounts and notes 2,117 197 546 (B) 690 (F) 2,170
-------- ------- ------ ------- -------
Total $ 16,501 $ 2,597 $8,651 $ 1,302 $26,447
======== ======= ====== ======= =======
Year-ended December 31, 2001
- ----------------------------
Reserves for inventory obsolescence $ 10,944 $ 1,857 $ 1,841 (C) $ 258 (G) $14,384
Reserves for doubtful accounts and notes 2,659 882 527 (D) 1,951 (F) 2,117
-------- ------- ------ ------- -------
Total $ 13,603 $ 2,739 $ 2,368 $ 2,209 $16,501
======== ======= ======= ======= =======
Year-ended December 31, 2000
- ----------------------------
Reserves for inventory obsolescence $ 10,511 $ 1,146 $ -- $ 713 (H) $10,944
Reserves for doubtful accounts and notes 3,230 803 -- 1,374 (F) 2,659
-------- ------- ------- ------- -------
Total $ 13,741 $ 1,949 $ -- $ 2,087 $13,603
======== ======= ======= ======= =======
Notes:
(A) Includes amounts acquired from the purchase of Electro-Mechanical
Division, Penny & Giles and Autronics, finalization of purchase accounting
adjustments of Lau Defense Systems and Vista Controls, and a currency
translation adjustment.
(B) Relates primarily to amounts acquired from the purchase of Penny & Giles
and Autronics.
(C) Relates primarily to amounts acquired from the purchase of Lau Defense
Systems and Vista Controls, Peerless Instrument and Solent & Pratt.
(D) Relates primarily to amounts acquired from the purchase of Lau Defense
Systems, Peerless Instrument and Solent & Pratt.
(E) Deductions relate to the scraping of obsolete inventory.
(F) Deductions relate primarily to the write-off of accounts receivable, net
of recoveries.
(G) Deductions relate primarily to release of reserves no longer required.
(H) Deductions relate to the scraping of obsolete inventory and release of
reserves no longer required.
Page 32
(I) EXHIBIT INDEX
The following is an index of the exhibits
included in this report or incorporated
herein by reference.
Exhibit
No. Name Page
- ------------------------------------------------------------------------------------------------
(2)(i) Second Amended and Restated Distribution Agreement, *
dated as of August 17, 2001, between the Company and Unitrin,
Inc. (incorporated by reference to Appendix A to the
Registrant's Proxy Statement Schedule on 14A with respect to
the recapitalization of the Company dated September 5, 2001).
(2)(ii) Second Amended and Restated Agreement and Plan of Merger, dated *
as of August 17, 2001, among the Company, Unitrin, Inc., and CW
Disposition Company (incorporated by reference to Appendix B to
the Registrant's Proxy Statement Schedule on 14A with respect
to the recapitalization of the Company dated September 5,
2001).
(2)(iii) Asset Purchase and Sale Agreement dated October 25, *
2001 between Lau Acquisition Corporation, Lau Defense Systems,
LLC, Vista Controls Corporation and Curtiss-Wright Corporation.
(incorporated by reference to Exhibit 2.3 to the Registrant's
Quarterly Report on Form 10-Q for the period ended September
30, 2001).
(2)(iv) Real Estate Sale and Purchase Agreement dated August 2, 2001 *
between Curtiss-Wright Corporation, Curtiss-Wright Flight
Systems, Inc. and Shaw Achas, LLC (incorporated by reference to
Exhibit 2.1 to the Registrant's Current Report on Form 8-K,
filed January 4, 2002).
(2)(v) Addendum to Real Estate Sale and Purchase Agreement dated *
September 10, 2001 by and between Curtiss-Wright Corporation
Curtiss-Wright Flight Systems, Inc. and Shaw Achas, LLC
(incorporated by reference to Exhibit 2.2 to the Registrant's
Current Report on Form 8-K, filed January 4, 2002).
(2)(vi) Share and Asset Purchase Agreement dated February 19, 2002 *
between Spirent Plc. and Curtiss-Wright Corporation
(incorporated by reference to Exhibit 2.1 to the Registrant's
Current Report on Form 8-K, filed April 15, 2002).
Page 33
Exhibit
No. Name Page
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(2)(vii) Asset Purchase Agreement dated October 25, 2002 between *
Westinghouse Government Services Company LLC and Curtiss-Wright
Corporation (incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K, filed November 12,
2002).
(3)(i) Restated Certificate of Incorporation as amended November 29, *
2001 (incorporated by reference to Appendix C-1 to Registrant's
Proxy Statement on Schedule 14A with respect to the
recapitalization of the Company dated September 5, 2001).
(3)(ii) By-laws as amended through November 29, 2001 (incorporated by *
reference to Appendix D-1 to Registrant's Proxy Statement on
Schedule 14A with respect to the recapitalization of the
Company dated September 5, 2001).
(4)(i) Agreement to furnish to the Commission upon request, a copy of *
any long-term debt instrument where the amount of the
securities authorized thereunder does not exceed 10% of the
total assets of the Registrant and its subsidiaries on a
consolidated basis (incorporated by reference to Exhibit 4 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1985).
(4)(ii) Revolving Credit Agreement dated May 13, 2002 between *
Registrant, the Lenders parties thereto from time to time, the
Issuing Banks referred to therein and The Bank of Nova Scotia
(incorporated by reference to Exhibit 4.1 to Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31,
2002).
(4)(iii) Short-Term Credit Agreement dated May 13, 2002 between *
Registrant, the Lenders parties thereto from time to time, the
Issuing Banks referred to therein and The Bank of Nova Scotia
(incorporated by reference to Exhibit 4.2 to Registrant's
Quarterly Report on Form 10-Q for the Quarter ended March 31,
2002).
(4)(iv) Amended and Restated Rights Agreement, dated as of November 6, *
2000, as amended and restated as of November 20, 2001, between
the Company and Mellon
Page 34
Exhibit
No. Name Page
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Investor Services LLC (f/k/a ChaseMellon Shareholder Services, 38
L.L.C.), as Rights Agent, (incorporated by reference to
Exhibit 4 to the Registrant's Report on Form 8-K, filed
November 20, 2001).
(4)(v) Amendment to Restated Rights Agreement dated February 1, 2002 *
naming American Stock Transfer & Trust Company as Rights Agent,
(incorporated by reference to Exhibit 4(iv) to the Registrant's
Annual Report on Form 10-K, filed March 18, 2002).
(10)(i) Modified Incentive Compensation Plan, as amended November 9, *
1989 (incorporated by reference to Exhibit 10(a) to
Registrant's Quarterly Report on Form 10-Q for the period ended
September 30, 1989).**
(10)(ii) Curtiss-Wright Corporation 1995 Long-Term Incentive Plan *
(incorporated by reference to Exhibit 4.1 to Registrant's Form
S-8 Registration Statement No. 95602114 filed December 15,
1995).**
(10)(iii) Revised Standard Employment Severance Agreement with Certain *
Management of Curtiss-Wright (incorporated by reference to
Exhibit 10 to Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 2001).**
(10)(iv) Retirement Benefits Restoration Plan as amended April 15, 1997 *
(incorporated by reference to Exhibit 10 to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30,
1997).**
(10)(v) Restated and Amended Curtiss-Wright Corporation Retirement Plan *
as amended through February 28, 2002, (incorporated by
reference to Exhibit (10)(v) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001).
(10)(vi) Restated and Amended Curtiss-Wright Corporation Savings and *
Investment Plan dated February 28, 2002, (incorporated by
reference to Exhibit (10)(v) to Registrant's Annual Report on
Form 10-K for the year ended December 31, 2001).
Page 35
Exhibit
No. Name Page
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(10)(vii) Curtiss-Wright Electro-Mechanical Division Pension Plan dated
October 29, 2002, filed herewith.**
(10)(viii) Curtiss-Wright Corporation 1996 Stock Plan for Non-Employee *
Directors (incorporated by reference to Exhibit 4.1 to
Registrant's Form S-8 Registration Statement No. 96583181,
filed June 19, 1996).**
(10)(ix) Curtiss-Wright Corporation Executive Deferred Compensation Plan *
effective November 18, 1997 (incorporated by reference to
Exhibit (10)(viii) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1997).**
(10)(x) Change In Control Severance Protection Agreement dated July *
9, 2001 between the Registrant and Chief Executive Officer of
the Registrant (incorporated by reference to Exhibit 10.1 to
Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 2001).**
(10)(xi) Standard Change In Control Severance Protection Agreement *
dated July 9, 2001 between the Registrant and Key Executives of
the Registrant (incorporated by reference to the Registrant's
Quarterly Report on Form 10-Q for the period ended September
30, 2001).**
(10)(xii) Trust Agreement dated January 20, 1998 by and between *
Curtiss-Wright Corporation and PNC Bank, National Association
(incorporated by reference to Exhibit 10(a) to Registrant's
Quarterly Report on Form 10-Q for the period ended March 31,
1998).**
(10)(xiii) Consulting Agreement dated April 10, 2000 between Registrant *
and David Lasky, (incorporated by reference to Exhibit (10)(xi)
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 2000).**
(10)(xiv) Standard Supplemental Retirement Agreement dated April 27, 1999 *
between the registrant and certain Officers of the Registrant
(incorporated by reference to Exhibit 10 to Registrant's
Quarterly Report on Form 10-Q for the period ended June 30,
2000).**
Page 36
Exhibit
No. Name Page
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(10)(xv) Mutual Separation Agreement dated June 26, 2001 between Brian *
D. O'Neill and Registrant, (incorporated by reference to
Exhibit (10)(xiv) to Registrant's Annual Report on Form 10-K
for the year ended December 31, 2001).**
(10)(xvi) Mutual Separation Agreement dated November 12, 2001 between *
Robert A. Bosi and Registrant, (incorporated by reference to
Exhibit (10)(xv) to Registrant's Annual Report on Form 10-K for
the year ended December 31, 2001).**
(10)(xvii) Consulting Agreement dated June 18, 2002 between Registrant and *
Gerald Nachman (incorporated by reference to Exhibit 10.1 to
Registrant's Quarterly Report on Form 10-Q for the period ended
June 30, 2002).**
(13) Annual Report to Stockholders for the year ended December 31, 107
2002.
(16) Letter from PricewaterhouseCoopers LLP, dated March 25, 2003 *
(incorporated by reference to Registrant's Form 8-K, filed
March 26, 2003).
(21) Subsidiaries of the Registrant. 108
(23) Consents of Experts and Counsel - see Consent of Independent 109
Accountants.
(99.1) Certification of Martin R. Benante, Chairman and Chief 110
Executive Officer, Pursuant to Section 906 of the Sarbanes
Oxley Act of 2002.
(99.2) Certification of Glenn E. Tynan, Chief Financial Officer, 111
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
- --------------------------------------------------------------------------------
* Incorporated by reference as noted.
** Management contract or compensatory plan or arrangement.
Page 37
STATEMENT OF DIFFERENCES
The trademark symbol shall be expressed as............................... 'TM'
The registered trademark symbol shall be expressed as.................... 'r'