CW 10-K & 10-Q changes, risk factors and insider trading

We store sensitive data, including intellectual property, proprietary business information, and confidential employee information on our servers and databases. As a result, we are increasingly dependent upon our information systems to operate and manage our business. Our ability to effectively operate and manage our business depends on the security, reliability, and adequacy of our information systems. In addition, various privacy and cybersecurity laws and regulations, both in the U.S. and globally, require us to manage and protect sensitive and confidential information, including personal data of our employees, from disclosure. For example, the European Union’s General Data Protection Regulation, which became effective in May 2018, extends the scope of the European Union data protection laws to all companies processing data of European Union residents, regardless of the company’s location. Additionally, we have incurred, and expect to continue to incur, additional costs to comply with increased cybersecurity protections for our customers, including the U.S. government. Despite our implementation of firewalls, switchgear, and other network security measures, our servers, databases, and other systems may be vulnerable to various cyber and other security threats, including those caused by computer hackers, physical or electronic break-ins, sabotage, computer viruses, malware, worms, and similar disruptions from unauthorized access and tampering with our computer systems, including through social engineering such as phishing attacks, coordinated denial-of-service attacks, and similar incidents. Such intrusions could result in our network security or computer systems being compromised and possibly result in the misappropriation or corruption of sensitive information, including intellectual property, or cause disruptions in our services. To the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and produce advanced cybersecurity attacks, and vulnerabilities may be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers. The occurrence of some of these risks may be increased due to the work-from-home arrangements that we have implemented for many of our office-based employees. We continue to review and enhance our computer systems as well as provide training to our employees in an attempt to prevent unauthorized and unlawful intrusions. However, it is possible that we may not be able to prevent all intrusions. Such intrusions could result in our network security or computer systems being compromised and possibly result in the misappropriation or corruption of sensitive information, including intellectual property, or cause disruptions in our services. While we carry cyber insurance, we still may be required to expend significant capital and resources to protect against, remediate, or alleviate problems caused by such intrusions. Any such intrusion could cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Our businesses depend on suppliers and subcontractors for raw materials and components.components, Atas timeswell subcontractors performas services that we provide to our customers. Our supply chain has been and may continue to be impacted by a wide variety of factors, including supplier capacity constraints, sanctions and trade restrictions and other governmental regulatory actions or inactions, labor and material shortages as well as tariffs and other geopolitical events, such as the Russia-Ukraine war,war and China’s relationship with the United States and Taiwan. Because we strive to limit the volume of raw materials and component parts on hand, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities that we require. We also depend on subcontractors and suppliers to meet their contractual obligations in full compliance with customer requirements. Nonperformance or underperformance by subcontractors and suppliers could materially impact our ability to perform obligations to our customers, which could result in a customer terminating our contract for default, expose us to liability, and substantially impair our ability to compete for future contracts and orders. Generally, raw materials and purchased components are available from a number of different suppliers, though several suppliers are our sole source of certain components. If a sole-source supplier is delayed or should cease or otherwise be unable to deliver such components, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our operating results. A sole-source supplier of a key component could also potentially exert significant bargaining power over price, quality, warranty claims, or other terms relating to these materials, which could have a material adverse effect on our financial condition, results of operations, and cash flows. In addition, supply chain constraints and improving economic conditions have resulted in sustained increases in the prices we pay for many of the components and raw materials used in our products. Furthermore, we are experiencing higher labor costs due to increased competition for personnel in many regions in which we operate as well as general inflationary conditions, including higher shipping costs, labor shortages, and rising energy prices. Our ability to perform our obligations as a prime contractor may be adversely affected if one or more of these suppliers is unable to provide the agreed-upon supplies or perform the agreed-upon services in a timely and cost-effective manner. While we have attempted to mitigate the effects of increased costs through price increases, there are no assurances that higher prices can effectively be passed through to our customers, or that we will be able to fully offset the effects of higher raw materials costs through price increases on a timely basis.

As part of our capital allocation strategy, we aim to grow our business by selectively pursuing acquisitions and technologies that supplement our organic growth. We are continuing to actively pursue additional acquisition opportunities,growth, some of which may be material to our business and financial performance. Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for several reasons, including:

Virtually all products produced and sold by us are highly engineered and require sophisticated manufacturing and system-integration techniques and capabilities. The commercial and government markets in which we operate are characterized by rapidly changing technologies. In addition, product and program needs of our government and commercial customers change and evolve regularly. Accordingly, to remain competitive in the future, we will need to continue to invest financial resources, including through internal research and development, acquisitions, or other teaming arrangements, to: (a) identify emerging technological trends in our current and target markets; (b) develop and manufacture competitive products, systems, and services; (c) enhance our offerings by adding technological innovations that differentiate our products, systems, and services from those of our competitors; and (d) develop, manufacture, and bring those products, systems, and service to market quickly at cost-effective prices. These expenditures could divert our attention and resources from other projects, and we cannot be sure that these expenditures will ultimately lead to the timely development of new offerings and technologies or identification of and expansion into new markets. Due to the design complexity of our products, we may, in the future, experience delays in completing the development and introduction of new products. Any delays could result in increased costs of development or deflect resources from other projects. In addition, there can be no assurance that the market for our products will develop or continue to expand or that we will be successful in newly identified markets as we currently anticipate. Furthermore, while we do not currently use artificial intelligence (“AI”) in the design and development of our products, we may seek to utilize AI in the future. The development, deployment, and integration of AI technologies presents risks, challenges, and potential unintended consequences that could affect our business. Given that laws and regulations around AI are continuously evolving, our obligation to comply with them could entail significant costs, negatively affect our business, or hinder our ability to incorporate certain AI capabilities into our operations and products.

In 2024,2025, approximately 48%47% of our total net sales were derived from or related to U.S. defense programs. U.S. defense spending has historically been cyclical and is subject to periodic congressional action. The level of U.S. defense spending can vary and may be impacted by numerous outside factors, such as changes in the perceived threat environment, the U.S. Government’s budget deficits, spending priorities, and possible political pressure to reduce U.S. Government military spending, each of which could cause the Department of DefenseDoW budget to remain unchanged or to decline. Generally, an increase in the level of concern over the country’s safety tends to increase defense budgets. However, we cannot provide assurance that an increase in defense spending would benefit our business. At other times, spending by the military can decrease. Decreases in U.S. defense spending, changes in the allocation of defense spending, or the expiration or termination of certain aerospace and defense programs on which we have content could result in a reduction in our revenues and earnings and could have a material adverse effect on our business, financial condition, and results of operations.

U.S. lawmakers on several occasions have passed legislation to raise the federal debt ceiling, includingthe most recent of which was through the suspensionpassage toon July 4, 2025 of the One Big Beautiful Bill Act ("OBBBA"), which raised the federal debt ceiling inby June$5 2023,trillion. whichFailure allowed the U.S. government to cover its debt obligations until January 1, 2025. Becauseby Congress failed to further suspend or increase the debt ceiling, the debt ceiling was reinstated on January 1, 2025. The U.S. Department of the Treasury has announced that, since then, it has been using extraordinary measures to prevent the U.S. government’s default on its payment obligations, and to extend the time that the U.S. government has to raise its statutory debt limit, reinstate a suspension or otherwise resolve its funding situation. If extraordinary measures are exhausted prior to legislation being enacted to resolve the funding situation, the U.S. government may not be able to fulfill its funding obligations. This could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments.

A downturn in the commercial aircraft market could adversely affect our business.

Our sales to large commercial aircraft manufacturers, such as Boeing, Airbus, and related OEM suppliers, as well as manufacturers of business jets, are cyclical in nature, and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns (inclusive of climate change), intense price competition, high interest rates, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, labor strikes such as the International Association of Machinists and Aerospace workers union work stoppagestoppages at Boeing, geopolitical events, conflicts and wars (including the Russia-Ukraine war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside of our control. For example, the COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus. The reduced air traffic applied financial pressures on airlines, who, in order to preserve cash and liquidity, dramatically reduced flight hours and cancelled or delayed the purchases of new aircraft. Furthermore, as companies and employees become accustomed to working remotely, there is a risk that business travel and the associated flight hours may notbe fully reach pre-pandemic levels.impacted. Any decrease in demand resulting from a downturn in the aerospace market could adversely affect our business, financial condition, and results of operations.

Backlog represents products or services that our customers have contractually committed to purchase from us. TotalAs backlog includes both funded (unfilled orders for which funding is authorized, appropriated, and contractually obligated by the customer) and unfunded backlog (firm orders for which funding has not been appropriated and/or contractually obligated by the customer). Wewe are a subcontractor to prime contractors for the vast majority of our government business. As such,business, substantially all amounts in backlog are funded. Backlog excludes unexercised contract options and potential orders under ordering type contracts (e.g. Indefinite Delivery / Indefinite Quantity). BacklogFurther, it is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur. Backlog as of December 31, 20242025 was $3.4approximately $4.1 billion. Backlog is subject to fluctuations and is not necessarily indicative of future sales. The timing of backlog may be impacted by project delays. The U.S. Government may unilaterally modify or cancel its contracts. In addition, under certain of our commercial contracts, our customers may unilaterally modify or terminate their orders at any time for their convenience. Accordingly, certain portions of our backlog can be cancelled or reduced at the option of the U.S. Government and commercial customers. Our failure to replace cancelled or reduced backlog could negatively impact our results of operations.

We must comply with and are affected by laws and regulations relating to the award, administration, and performance of U.S. Government contracts.contracts, Government contract laws and regulations affect how we do business with our customers and,which in some instances, impose added costs on our business. These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could further significantly increase our costs and risks and reduce our profitability. We have been, and expect to continue to be, subjected to audits, reviews, and investigation by government agencies. A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, or debarment from bidding on contracts.contracts, harm to our business reputation, or result in our progress payments being withheld. These fines and penalties could be imposedimposed, for example, by failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or paying kickbacks, or filing false claims. We have been, and expect to continue to be, subjected to audits, reviews, and investigations by government agencies. The failure to comply with the terms of our government contracts could harm our business reputation. It could also result in our progress payments being withheld. In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions. For example, the U.S. Government may terminate any of our government contracts and, in general, subcontracts, at its convenience as well as for default based on performance. Upon termination for convenience of a fixed-price type contract, we normally are entitled to receive the purchase price for delivered items, reimbursement for allowable costs for work-in-process, and an allowance for profit on work actually completed on the contract or adjustment for loss if completion of performance would have resulted in a loss. Upon termination for convenience of a cost reimbursement contract, we normally are entitled to reimbursement of allowable costs plus a portion of the fee. Such allowable costs would normally include our cost to terminate agreements with our suppliers and subcontractors. The amount of the fee recovered, if any, is related to the portion of the work accomplished prior to termination and is determined by negotiation.

We have contracts and operations in many parts of the world subject to United States and foreign laws and regulations, including the False Claims Act, regulations relating to import-export control (including the International Traffic in Arms Regulation promulgated under the Arms Export Control Act), sanctions programs implemented by the Office of Foreign Assets Control of the U.S. Department of Treasury,Treasury ("OFAC"), technology transfer restrictions, repatriation of earnings, exchange controls, the Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act, and the anti-boycott provisions of the U.S. Export Administration Act. Although we have implemented policies and procedures and provided training that we believe are sufficient to address these risks, we cannot guarantee that our operations will always comply with these laws and regulations. From time to time, we may file voluntary disclosure reports with the U.S. Department of State, the Department of Energy, the Department of Commerce, and the Department of CommerceTreasury regarding certain violations of U.S. export control laws and regulations and OFAC sanctions discovered by us in the course of our business activities, employee training, or internal reviews and audits. To date, our voluntary disclosures have not resulted in a fine, penalty, or export privilege denial or restriction that has had a material adverse impact on our financial condition or ability to export. Our failure, or failure by our sales representatives or consultants to comply with these laws and regulations could result in administrative, civil, or criminal liabilities and could, in the extreme case, result in suspension or debarment from government contracts or suspension of our export privileges, which could have a material adverse effect on our business.

Any significant disruption in the commercial nuclear power industryindustry, including delays in the development of small modular reactors, could adversely affect our business.results of operations or future outlook.

Our Naval & Power segment manufactures components for, and provide services to, customers in the nuclear power market, including utilities and certain governmental entities, and subjects us to various safety related requirements imposed by the U.S. Government, the Department of Energy, the Nuclear Regulatory Commission, and other agencies in foreign jurisdictions. In the event of non-compliance, these agencies might increase regulatory oversight, impose finesfines, or shut down operations, depending on their assessment of the severity of the noncompliance. In addition, new or revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures.

The Price-Anderson Act (“PPA”) promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S. Department of Energy (“DOE”) contractors for liabilities arising out of nuclear incidents at power plants licensed by the Nuclear Regulatory Commission (“NRC”) and at DOE nuclear facilities. That indemnification protects not only the NRC licensee or DOE prime contractor, but also others like us who may be doing work under contract or subcontract for a licensed power plant or under a DOE prime contract. The Price-Anderson Act indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry. If an incident or evacuation is not covered under the Price-Anderson Act’s indemnification provisions, we could be held liable for damages, regardless of fault. In addition, if such indemnification authority is not applicable in the future, for instance, our business could be adversely affected if the owners and operators of nuclear power plants fail to retain our services in the absence of commercially adequate insurance and indemnification.

We offer similar services in other jurisdictions outside the U.S.United States. For those jurisdictions, varying levels of nuclear liability protection is provided by international treaties, and/or domestic laws, such as the Nuclear Liability and Compensation Act of Canada and the Nuclear Installations Act of the United Kingdom, insurance and/or assets of the nuclear installation operators (some of which are backed by governments) as well as under appropriate enforceable contractual indemnifications and hold-harmless provisions. These protections and indemnifications, however, may not cover all of our liability that could arise in the performance of these services.

Governmental agencies throughout the world, including the U.S. Federal Aviation Administration ("FAA") and the European Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. We include documentation with our products sold to aircraft manufacturing customers certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries. In order to sell our products, we as well as the products that we manufacture must also be certified by our individual OEM customers. If any of the material authorizations or approvals qualifying us to supply our products is revoked or suspended, then the sale of such product would be prohibited by law, which would have an adverse effect on our business, financial condition, and results of operations.

FromIn addition, from time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations. If these proposed regulations are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition, and results of operations.

Our business and facilities are subject to numerous federal, state, local, and foreign laws and regulations relating to the use, manufacture, storage, handling, and disposal of hazardous materials and other waste products used in the manufacturing of certain of our products or providing certain of our services, and we are subject to potentially significant fines or penalties, including criminal sanctions, as well as facility shutdowns to address violations, and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges. We may also be subject to increasingly stringent environmental standards in the future, particularly as greenhouse gas emissions and climate change regulations and initiatives increase. Regulatory bodies may decide in the future to limit or ban certain materials we use in our manufacturing process due to potentially significant health and safety risks to people or the environment. Such limitations or bans may in the future require us to consider,consider the use of alternative raw materials or changes to our method of operations. Such alternatives often require customer approval and may result in additional costs, including higher raw material expenses, changes in operational methods, and additional customer qualifications. The formulation changes could also impact the utility of our products.

From time to time, we are involved in lawsuits and regulatory actions brought or threatened against us in the ordinary course of business. These actions and proceedings may involve claims for, among other things, asbestos and environmental exposures, intellectual property matters, copyright infringement, compensation for alleged personal injury, workers’ compensation, employment discrimination,and employee benefit matters, government contract issues, commercial or breachcontract ofdisputes, contract.and acquisitions or divestitures. We also may be subject to class action lawsuits, such as those involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts in these types of lawsuits, including punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief, and the magnitude of the potential loss may remain unknown for substantial periods of time. In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief. These proceedings could also result in substantial cost to defend ourselves and may require us to devote substantial resourcesemployee toresources, defendwhich ourselves andcould distract our management from the operation of our business. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses. The ultimate resolution of these matters through settlement, mediation, or court judgment could have a material impact on our financial condition, results of operations, and cash flows.

Regulators, stockholders, and other interested constituencies have focused increasingly on corporate responsibility, specifically related to the environmental, social, and governance ("ESG") or sustainability practices of companies, including climate change,change over the past few years, and expectations in this area are rapidly evolving. The criteria used to evaluate ESG practices may continue to evolve, which could result in greater expectations and may cause us to undertake costly initiatives to satisfy new criteria and abide by any new disclosure requirements. Some investors have used, and may continue to use, ESG criteria to guide their investment strategies, and may not invest in us, or divest their holdings of us, if they believe our policies relating to ESG matters are inadequate. Our customers may also require us to implement environmental, social, or governance responsibility procedures or standards before they continue to do business with us. Additionally, we may face reputational challenges if our ESG procedures or standards do not meet the standards set by certain constituencies, which are often inconsistent in approach. Furthermore, from time to time, we may communicate certain initiatives or goals regarding ESG matters. Although we intend to meet these commitments, we may be required to expend significant resources to do so, which could increase our operational costs. Further, there can be no assurance of the extent to which any of our commitments will be achieved, if at all. In addition, we could be criticized for the scope of such initiatives or goals or perceived as not acting responsibly in connection with these matters. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.

During 2024,2025, approximately 27% of our total net sales were to customers outside of the United States. Additionally, we also have operating facilities located in foreign countries. Doing business in foreign countries is subject to numerous risks, including without limitation: (a) political and economic instability and potential for social unrest; (b) the uncertainty of the ability of non-U.S. customers to finance purchases; (c) restrictions on the repatriation of funds; (d) restrictive trade policies; (e) tariff regulations; (f) difficulties in obtaining export and import licenses; (g) government financed competition; (h) changes in the local labor-relations climate; (i) economic conditions in local markets, including changes in inflation; (j) health concerns (including COVID-19 or any of its variants); (k) complying with foreign regulatory and tax requirements that are subject to change; and (l) limitations on our ability to enforce legal rights and remedies. For example, in response to Russia’s invasion of Ukraine, the United States, along with the European Union, have imposed restrictive sanctions on Russia, Russian entities, and Russian citizens. We are subject to these governmental sanctions and export controls, which may subject us to liability if we are not in full compliance with applicable laws. Further, implementation of new tariff schemes by various governments, such as those implemented by the United StatesStates, Canada, and China in recent years, could potentially increase the costs of our materials, increase our cost of production, and ultimately increase the landed cost of our products sold from one country into another country. While these factors or the impact of these factors are difficult to predict, any one or more of these factors could adversely affect our operations.

Our business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting our income tax expense and profitability. InOn bothJuly 20214, 2025, the U.S. government enacted the OBBBA, which extended various expiring tax provisions from the Tax Cuts and 2022,Jobs Act of 2017 ("TCJA") and introduced a variety of other substantial tax law changes. For Curtiss-Wright, the Bidenmost administrationsignificant announced,impact relates to the immediate expensing of research and development expenditures in certain2025, casesreducing hastotal enacted,estimated several2025 tax proposalspayments. toThere fundwas new government investments in infrastructure, healthcare, and education, among others. Certain of these proposals involve an increase in the domestic corporate tax rate, which if implemented could have ano material impact on our future results of operations and cash flows. On August 16, 2022,to the InflationCorporation's Reduction2025 Act of 2022 (IRA) was signed into law, witheffective tax provisions primarily focused on implementing a 15% minimum corporate tax on global adjusted financial statement income and a 1% excise tax on share repurchases. Certain provisions of the IRA became effective in the beginning of fiscal 2023. We have evaluated the impact of the IRA on our business and deem it to be immaterial.rate. Further, changes in the tax laws of foreign jurisdictions where we operate could arise as a result of the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development ("OECD"). In December 2022, the European Union ("EU") member states reached an agreement to implement the 15% minimum corporate tax component ("Pillar Two") of the OECD’s tax reform initiative with certain aspects effective January 1, 2024, and other aspects effective January 1, 2025. Further, on January 5, 2026, the OECD released a comprehensive package for a “side-by-side arrangement” with respect to Pillar Two global minimum tax rules that includes new administrative guidance. Legislative changes to address Pillar Two are being adopted by taxing authorities in countries where we do business. Based on the Corporation’s preliminary assessments, it does not expect Pillar Two to have a material impact on its effective tax rate nor on its consolidated results of operation, financial position, and cash flows.

A significant portion of our business activities are conducted in foreign countries, including Mexico and Canada. Our business benefits from free trade agreements such as the United States-Mexico-Canada Trade Agreement ("USMCA") and relies on various U.S. corporate tax provisions related to international commerce as we build, market, and sell our products globally. Although there are no immediate effects on our operations with respect to USMCA, we cannot predict future developments in the political climate involving the United States, Mexico and Canada, and thus, these may have an adverse and material impact on our operations and financial growth. The USMCA is subject to renewal in 2026 and the U.S. government has recently indicated that it intends to negotiate changes to the USMCA with the Mexican and Canadian governments. The effects of such negotiations and any changes to the USMCA may negatively impact our operations in Mexico and Canada, and may significantly and materially increase our costs by increasing the cost of shipping products from our facilities in Mexico and in Canada.

The United States and other countries have levied tariffs and taxes on certain goods, such as those implemented by the United StatesStates, Canada, and China in recent years. Some of our products are included in these tariffs. The imposition of new or increased tariffs, duties, border adjustment taxestaxes, or other trade restrictions by the United States could also result in the adoption of new or increased tariffs or other trade restrictions by other countries. The tariffs may in the future increase our cost of materials and may cause us to increase prices to our customerscustomers, which we believe may reduce demand for our products in the U.S. and abroad. Media and political reactions in the affected countries could potentially exacerbate the impact on our operations in those countries. Our price increases may not be sufficient to fully offset the impact of the tariffstariffs, and result in lowering our margin on products sold. If the U.S. government increases or implements additional tariffs, or if additional tariffs or trade restrictions are implemented by other countries, the resulting trade barriers could have a significant adverse impact on our suppliers, our customers and on our business. We are not able to predict future trade policy of the U.S. or of any foreign countries in which we operate or purchase goods, or the terms of any renegotiated trade agreements, or their impact on our business.

Although we currentlyhave generatesignificant discretionary funding capacity through our generation of significant operating cash flows,flows which combinedcoupled with access to the credit marketsmarkets, providesour usability withto significantfund discretionaryour fundingoperations capacity,could be negatively impacted by the following factors: (a) global macroeconomic uncertainty, (b) the ongoing trade disputes between the United StatesStates, Canada, and China, (c) armed conflicts around the world, such as those in UkraineUkraine, and Israel, and(d) any conflict or threatened conflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), (e) any prolonged future U.S. government shutdown, (f) inflationary pressures, (g) rising interest rates, (h) labor shortages, (i) global supply chain disruptions, and (j) uncertainty regarding the stability of global credit and financial markets could affect our ability to fund our operations.markets. In addition, certain of our customers and suppliers could be affected directly by an economic downturn and could face credit issues or cash flow problems that could give rise to payment delays, increased credit risk, bankruptcies, and other financial hardships, which could impact customer demand for our products as well as our ability to manage normal commercial relationships with our customers and suppliers. Depending on their severity and duration, the effects and consequences of a global economic downturn could have an adverse impact on our results of operations and financial condition.

Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseen interruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war (including the Russia-Ukraine war), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, or other events such as strikes by the workforce of a significant customer or supplier (e.g., the International Association of Machinists and Aerospace workers union work stoppagestoppages at Boeing). Several of our facilities, because of their locations, could be subject to catastrophic loss caused by the above mentionedabove-mentioned natural disasters. Global climate change may aggravate natural disasters and increase severe weather events that affect our business operations. These risks could negatively impact demand for or supply of our products and could also cause disruption to our facilities or systems, which could also interrupt operational processes and adversely impact our ability to manufacture our products and provide services and support to our customers. The insurance we maintain may be insufficient to cover our losses, and any incidents may result in loss of, or increased costs of, such insurance. In addition, while our existing disaster recovery and business continuity plans, including those relating to our information technology systems are well designed, they may not be fully responsive to, or minimize losses associated with, catastrophic events. As a result, any business disruption could negatively affect our business, operating results, or financial condition.

A pandemic, including COVID-19 or other epidemic or public health emergency, together with preventative measures taken to contain or mitigate such crises, could impact our business, operations and financial condition in a variety of ways, such as: (ii.) impact our customers such that the demand for our products and services could change; (iiii.) disrupt our supply chain and impact the ability of our suppliers to provide products or services as required; (iiiiii.) disrupt our ability to sell and provide our products and services and otherwise operate effectively; (iviv.) increase incremental costs resulting from the adoption of preventative measures and compliance with regulatory requirements; (vv.) create financial hardship on customers, including by creating restrictions on their ability to pay for our products and services; and (vivi.) result in closures of our facilities or the facilities of our customers or suppliers. Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, operations, and financial results. As we cannot predict the duration, scope or severity of future public health crises, the negative financial impact to our results cannot be reasonably estimated and could be material.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") begins with an overview of our company, followed by economic and industry-wide factors impacting our company and the markets we serve, a discussion of the overall results of operations, and finally a more detailed discussion of those results within each of our reportable segments.

Curtiss-Wright Corporation along with its subsidiaries is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace A& defenseD markets, as well as critical technologies in demanding commercial nuclear power, process, and industrial markets. We holdmaintain competitive positions in athe majority of our key A&D and commercial end markets through engineering and technological leadership, consistent investments in research and development, precision manufacturing, and stronglong-standing relationshipsrelationships. withWe our customers. Through One Curtiss-Wright, we are also well positionedcontinue to continuously leverage our teams’ collaborative efforts and the strength of our combined portfolio, while also seeking to build upon crossovercross-market applicationsopportunities that may exist acrosswithin our defense and commercial market technologies.

In the global environment, which is typically influenced by international trade, economic conditions, andas well as geopolitical and tariff uncertainty, GDP had also been greatly impacted by the pandemic in 2020, before it rebounded in 2021. In 2024, global GDP is expected to grow betweenapproximately 2.5% and 3.0%, according to various forecasts. Global GDP is expected to grow at a similar pace2.9% in 2025, givendecrease optimismto for a continued reduction2.7% in inflation,2026, butand remain well below 3% for the foreseeable future, based on uncertainty regarding the long-term impacts of potentially higher tariffs and trade uncertainty, particularly in China.future.

Curtiss-Wright maintains a strong presence across the naval, aerospace, and ground defense marketsmarkets, withwhich collectively represent approximately 58% of our annual net sales. Curtiss Wright provides vast platform and program diversity, where we support over 400 platforms and 3,000 programs worldwide. Our portfolio of products and services suppliessupports critical high-performance programs and platforms serving all branches of the U.S. military, wherein ouraddition contentto isa on critical high-performance programsstrong and platforms, and also supports a growing international defense business.presence. AThe most significant portion of our defense business operationsrevenues is comprised of long-term programs and primarily fixed-price contracts driven primarilymainly by U.S. DoDDoW budgets and funding levels. TheWe Companyhave hasstrong historicallyalignment demonstratedto solidU.S. growthmilitary inpriorities ourand defenselong-term markets,visibility on high priority platforms, most particularly whenshipbuilding. includingAs acquisitions,a supplier of COTS and hasCOTS+ exceeded the average growth rate of the U.S. defense budget over the past 20 years through various cycles and administrations. In addition, the Company is well-insulated from periods of U.S. defense budget flatness or trimming due to the breadth of our portfolio, unique, sole-source positions and opportunities to capitalize on work outsourced from defense primes, whilesolutions, we continue to expanddemonstrate that defense electronics technology will enhance our potentialability to design and develop future generations of advanced systems and products for growthhigh inperformance non-U.S. military spending.applications.

We derive a portion of our revenues from the naval defense, aerospace defense, and ground defense markets, which collectively represent approximately 57% of our annual net sales. In the naval defense market, we expect continued funding for U.S. shipbuilding programsprograms, which have received strong bipartisan support from Congress.Congress, in addition to supplemental maritime industrial base funding to support facility expansion and technology modernization initiatives. Of note, we are recognizing significant production revenues on the Ford class aircraft carrier, along with the Columbia class and Virginia class submarines, and numerous surface ship platforms, as well as development revenues on the future generation SSN(X) submarine. We have a long legacy of providing products that support nuclear propulsion systems on naval vessels. In addition, through our service centers, we are a provider of ship repair and maintenance for the U.S. Navy’s Atlantic and Pacific fleets. In the aerospace defense market, we expect to benefit from increased funding levels onsupporting the global market for manned and unmanned military aircraft, particularly Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance ("C5ISR"), electronic warfare, encryption, unmanned systems, and communications programs. AsWe a supplier of COTS and COTS+ solutions, we continue to demonstrate that defense electronics technology will enhance our ability toalso design and develop future generations of advanced systems and products for high performance applications, while also meeting the military’s size, weight, and power considerations. We are also a designer and manufacturer ofmanufacture high-technology data acquisition and comprehensive flight test instrumentation systems, as well as critical aircraft arresting systems equipment. In the ground defense market, we are a supplier of advanced tactical communications solutions for battlefield network management, including COTS-based rugged, small form factor communications systems,systems and integrated network communications management software. TheWe modernizationare ofalso thewell existingpositioned U.S. ground vehicle fleet is expected to recover slowly, while international demand should remain strong, particularly forwith our electronics stabilization systems.systems equipment supporting ground combat and tactical vehicles, particularly in the international ground defense market. Through continued innovation as well as incremental research and development investments, Curtiss-Wright remainsmaintains alignedstrong alignment with numerous high growth DoDU.S. military priorities, modernization efforts and emerging technological trends, including security, cyber, hypersonics, and the net-centric connected battlefield and soldier survivability.battlefield. In addition, Curtiss-Wright’sas alignmenta toleading supplier of MOSA-based solutions, Curtiss-Wright remains well aligned with the best-in-class open systemsstandards-based architecturearchitectures has positionedwithin the Companyindustry, to benefit fromand the DoD’scritical Modular Open Systems Approach (MOSA) mandatemandates supporting major defense acquisition programs.

Looking ahead, the DoD'sDoW has yet to release a future year defense plan ("FYDP") forecasts spending at an approximately 2% CAGR through FY29,FY30, coveringwhich is typically meant to cover longer-term spending priorities aimed at improving the defense industrial base and national security, modernization, and countering China as the “pacing challenge” in the global environment. However, there have been initial discussions about additional reconciliation funding for FY27.

Curtiss-Wright derives revenue from the global commercial aerospace market, principally to the commercial jet market, and to a lesser extent the regional jet, business jet, and commercial helicopter markets. Our primary focus is OEM products and services for commercial jets, which represent approximately 90% of our sales in this market,market and are highly dependent on new aircraft production from our primary customers, Boeing and Airbus. We have significant content on the majority of the commercial aircraft programs, including both narrow-body and wide-body aircraft. Currently, approximately 60% ofwhere our salesbusiness inis thismore market are linkedleveraged to thenarrowbody narrow-body(~60%) market.than widebody (~40%) commercial aircraft. We provide a combination of critical equipment,equipment supporting these platforms, including flight controls, actuation, high-temperature and high accuracy sensors, flight controls, and other sophisticated electronics, as well as surface treatment services such as shot and laser peeningpeening, and specialty coatings services utilized on highly stressed components of turbine engine fan blades and aircraft structures. Curtiss-Wright’s exposure continues to grow following wins on critical Airbus platforms toas we expand the reach of our electromechanical actuation business and pursuitspursue opportunities to provide high temperature enginesensors solutions.used in the hottest sections of the engine. Additionally, the Company has expanded its offering of flight data recorder technology to support the FAA's 25-hour safety mandates.

PassengerDespite economic uncertainty, global air travel reached record levels in 2025 and has steadily grown since the 2020 pandemic. The key drivers in the commercial aerospace market are passenger travel and freight logistics, along with the demand for and delivery of new aircraft to replace the existing, aging fleet, are the key drivers in the commercial aerospace market.fleet. The prolonged production up-cycle experienced in the prior decade was driven by increases in production by Boeing and Airbus on both legacy and new aircraft, particularly narrow-body aircraft. Additionally, sustained low oil prices contributed to declining fuel prices, which in turn led to cheaper airfares for consumers and increased passenger growth.

While we closely monitor these industry metrics, our success and future growth in the commercial aerospace market is primarily tied to the anticipated growth in aircraft production rates (e.g., Boeing 737 and 787, Airbus A320 and A350), the timing of our order placement, and continued partnering with aerospace OEMs on both the current fleet and the next-generation of single aisle programs and engines, as well asand emerging opportunities to support more fuel efficient and all-electric aircraft. Overall, we expect the secular trends of electrification and decarbonization, along with tremendous customer backlog, to support a long-term ramp up in commercial aerospace production.

Commercial Nuclear Power & Process

In the power market, Curtiss-Wright is a global supplier of nuclear reactor technologies. We derive sales from the commercial nuclear power generation market, whereby we supply a variety of highly engineered products and services, including reactor coolant pumps, control rod drive mechanisms, valves, motors, spent fuel management, containment doors, bolting solutions, enterprise resource planning, plant process controls, and coating services. We provide equipment and services to both the aftermarket and new build markets, and are aligned globally to support the entire commercial nuclear lifecycle. Today, we have content on every reactor operating in the U.S.U.S., today.Canada, and U.K., along with significant exposure within South Korea. Curtiss-Wright also plays a significant role in the new build market supporting the Generation III+ Westinghouse AP1000 reactor. Additionally, we are executing initiatives to leverage our capabilities into the broader conventional power generation market, capitalizing on advances in digital instrumentation and control systems, as well as next-generation Small Modular Reactors (SMRs) and Advanced Reactor designs which have the potential to bring transformational growth to the nuclear industry.designs.

According to the Nuclear Regulatory Commission (NRC),NRC, nuclear power comprises approximately 20% of all electric power produced in the U.S. today, with 94 reactors (including both Vogtle 3 and 4 AP1000 reactors) operating across 5456 nuclear power plants in 28 states. Our growth opportunities for aftermarket products and services are driven by plant aging, plant closures, plant starts, requirements for planned outages, plant life extensions (from the end of their original 40-year operating lives to 60-year and now 80-year lives via subsequent license renewals), the levying of regulatory requirements, suppliers abandoning the commercial nuclear market, and plants seeking technology and innovation advances, such as digitalization, that further enable plant modernization.

The U.S. market continues to experience strong bipartisan support for nuclear power, with previous significant investments through the Civil Nuclear Credit Program (part of the Infrastructure Bill) and nuclear power production tax credits (provided by the Inflation Reduction Act), and, more recently, through proposed nuclear reactor restarts focused on helping to preserve and expand the existing U.S. reactor fleet. As a result, we have experienced and continue to expect increased opportunities for our vast portfolio of advanced nuclear technologies to aid safety, extend the reliabilityreliability, and ensure the ongoing viability of U.S. nuclear plants. We also continue to expand Curtiss-Wright’s presence in Government Nuclear by providing equipment, systems, and construction products, such as safety-related control systems and plant performance and monitoring equipment, to key customers, including the Idaho National Laboratory and other government sites. Outside of the U.S. market, as international plants age, we foresee numerous opportunities to help solve operators’ needs to prevent obsolescence through plant safety and technology upgrades, plant life extensions, and upgrades of computer systems, and we continue to build upongrow our relationships throughout Canada, EuropeEurope, and South Korea, among others.

WeIn the new build market, we also play a significant role insupporting the new build market for the Generation III+ Westinghouse AP1000 reactor design,reactor, for which we are a supplier of reactor coolant pumps, as well as a variety of ancillary plant products and services. On a global basis, nuclear plant construction remains active. According to the World Nuclear Association, there are approximatelymore 65than 70 new reactors under construction in 15 countries, with anothernearly 85120 additional reactors planned and more than 300 others proposed over the next several decades. We continue to expect to play a role in new build nuclear plant construction, and remain aligned with Westinghouse in their pursuits. Long-termCurtiss-Wright's growth in thisthe new build market will be driven by new AP1000 orders, with the potential for 20 to 25 reactors to be built in Central and Eastern Europe, presentingalong with at least 10 reactors proposed to be built in the United States. This presents a tremendous opportunity forto drive Curtiss Wright's long-term growthgrowth, as bothPoland, PolandBulgaria, and Bulgariathe U.S. are expected to begin productionconstruction of new plants before the end of the decade. We also continue to seek opportunities in the U.S., China and India.

Backed by strong funding and legislative support, the U.S. Department of Energy haspreviously allocated $3.2 billion for advanced nuclear reactors through its Advanced Reactor Demonstration Program ("ARDP") to accelerate the development and demonstration of SMRs and advanced reactors through cost-shared partnerships with U.S. industry. The nuclear industry is also benefiting from an influx of investment from major technology companies including Amazon, Microsoft and Google to support electricity production to power data centers. We continue to grow our exposure in this market,market and are actively engaged with all major 300MW+ reactor designers to develop partnerships and secure content for the design and development of critical systems and equipment expected to be deployed globally. According to a 2022 Nuclear Energy Institute ("NEI") survey, its member utilities see a role for more than 90 gigawatts of nuclear power in support of their decarbonization goals, which translates to the potential for 300 new SMRs by 2050, and represents only a fraction of the potential global demand for these technologies. We anticipate SMR developmentdesign and prototypesdevelopment will begin to shift to prototypes as soon as 2026 and transition to initial production orders by the end of this decade,decade before reaching a steady-state of production by the middle of the next decade, providing a tremendous long-term growth opportunity.

Aside from our traditional valves offering, the Company is also advancing several subsea pumping development initiatives, working with industry leaders,leaders to meet the growing demand for more reliable pumping systems in deep sea drilling and off-shore production facilities. We have leveraged our legacy expertise in naval defense pump technology to crossover into this adjacent market and anticipate significant production orders to begin materializing by the middle of the next decade.

We derive revenue from our widely diversified offering to the general industrial market, which primarily consists of electronic sensors and control systems, electro-mechanical actuation, and surface treatment services. We supply our products and services to numerous OEMs and aftermarket industrial customers, including the transportation, commercial trucking, off-road equipment, agriculture, construction, material handling and automotive industries, which lowers the risk associated with any specific headwinds or economic cycles across the various markets in which we compete. Our growth in these markets is typically aligned with the performance of the U.S. and global economies, with changes in global GDP rates and industrial productionproduction, drivingwith the majority of our sales,sales particularlydriven forby ourcustomers surfacein treatmentNorth services.America and Europe.

We have developed long-standing relationships with our customers,customers and provide technologies that promote efficiency, safety, reduced emissions, and longevity. One of the key drivers within our general industrial market is our focus on electronification and electrification, where our electronic sensors and controls systems products serve the on-and-off highway, medical mobility, and specialty vehicles markets. Notable products include electronic throttle controls, shift controls, joysticks, power management systems and power electronics, charge switching units and traction inverter systems, drivingenabling our abilityus to provide a full suite of in-cab operator control systems to our customers. Increased industry demand for electronic control systems and sensors has been drivenfueled by the need for improved operational efficiency, safety, repeatability, enhanced functionality and connectivity, and reduced emissions,emissions enhanced functionality, andwith greater fuel efficiencies to customers worldwide. Key to our future growth is expanding the human-machine interface ("HMI") technology portfolio and providing a complete system solution to our customers. Existing and emerging trends in commercial vehicle safety, emissions control, and improved driver efficiency are propelling commercial vehicle OEMs toward higher performance subsystems. These trends are accelerating the evolution from discrete HMI components towards a more integrated vehicle interface architecture. Growth opportunities also exist with a range of intelligent actuators for industrialfactory automation and robotics and digitalization, which help our customers quickly leverage data and utilize analytics within the Internet of Things environment.environment, while also driving improved efficiency of plant operations. Meanwhile, our surface treatment services, which include shot and laser peening, engineered coatings, and analytical testing services across an extensive global network, are used to increase the safety, reliability, and longevity of components operating in harsh environments. Sales are primarily driven by global demand from general industrial customers.

In the long term, the global drive towards electrification and electronification, newpotential government regulations for emissions (expected to go into effect in 2027),emissions, investment in greenclean technology,energy technologies, and advancements in robotics and automation, along with consistent new product introductions and market penetration will provide steady growth opportunities for Curtiss-Wright’s technologies serving this market.

Operating income for the year increased $44$105 million, or 9%,20%, to $529$634 million, whileand operating margin decreasedincreased 10120 basis points compared with 2023.2024. In the DefenseAerospace Electronics& Industrial segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher A&Dsales, sales.the benefits of the Company's restructuring initiatives, and favorable foreign currency translation, partially offset by favorable mix. Operating income and operating margin in the Defense Electronics segment increased due to favorable absorption on higher sales, the benefits from both our operational excellence and restructuring initiatives, and favorable mix on defense electronics products. In the AerospaceNaval & IndustrialPower segment, operating income increased whileprimarily operatingdue margin decreased, asto favorable overhead absorption on higher sales was partially offset by current period restructuring costs and higher investment in research and development. Operating income in the Naval & Power segment increasedsales, while operating margin decreased,was asnegatively favorableimpacted overheadprimarily absorption on higher sales as well as the absence ofby first year purchase accounting costs fromassociated with our arresting systems acquisition wereof partiallyI&C offset by an unfavorable naval contract adjustmentSolutions and unfavorable product mix.

Non-segment operating expense for the year increaseddecreased $2 million, or 5%,4%, to $44$42 million, primarily due to higherlower corporate costs in the current period.

Interest expense for the year decreased $7$2 million, or 13%,4%, to $45$43 million, primarily due to lower borrowings under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”) as well as the repayment of our 2013$90 million 3.85% Senior Notes in February 2023.2025.

Other income, net for the year increaseddecreased $8$9 million, or 28%,23%, to $38$30 million, primarily due to higherlower interest income and higher overall pension costs in the current period.

The effective tax rate of 22.4%21.9% for the year ended December 31, 2023,2025, decreased as compared to an effective tax rate of 23.4%22.4% in the prior year period, primarily due to thetax benefits ofassociated awith our legal entity restructuring asin wellthe asprior loweryear provisional tax expense associated with foreign withholding taxes.period.

New orders increased $606$357 million, or 20%,10%, from the prior year period to $3,696$4,054 million, primarily due to anthe increasetiming inof naval defense orders supportingas aircraftwell carrieras andan submarineincrease programsin orders for commercial nuclear products in the Naval & Power segment. New orders also benefited from an increase in orders in the Aerospace & Industrial segment for avionicssensors and embeddedelectromechanical computing("EM") actuation products within our A&D markets as well as general industrial products. These increases were partially offset by the timing of orders for aerospace and ground defense equipment in the Defense Electronics segmentsegment, asincluding wellembedded ascomputing increaseand intactical orderscommunications for surface treatment services within our A&D markets in the Aerospace & Industrial segment.products. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

Pension and postretirement adjustments within comprehensive income during the year ended December 31, 20242025 were a $14$1 million gain, compared to a $8$14 million gain for the prior year period. The gain in the current period was primarily attributed to increaseshigher inasset the discount rate.returns. The gain in the prior period was primarily attributed to higher asset returns, partially offset by decreasesincreases in the discount rate.

Foreign currency translation adjustments during the year ended December 31, 20242025 resulted in a comprehensive lossgain of $44$68 million, compared to a comprehensive gainloss of $38$44 million in the comparable prior period. The comprehensive gain in the current period was primarily attributed to increases in the British Pound and Canadian Dollar, while the comprehensive loss in the currentprior year period was primarily attributed to decreases in the British Pound and Canadian Dollar, while the comprehensive gain in the prior year period was primarily attributed to increases in the British Pound.Dollar.

Sales increased $45$44 million, or 5%, to $932$977 million, from the comparable prior year period primarily due to higher sales in the commercial aerospace and aerospace defense markets.period. In the commercial aerospace market, sales increased $43$34 million primarily due to higher OEMdemand sales offor sensors products and actuation products, as well as surface treatment services,services on narrowbodyvarious narrow-body and widebodywide-body platforms. TheSales aerospacein the ground defense market benefitedincreased from sales increases of $15$16 million primarily due to higher sales of EM actuation developmentequipment. In the aerospace defense market, sales increased $8 million primarily due to higher demand for actuation equipment and productionsurface treatment services on various domestic and international fighter jet programs. These increases were partially offset by lower sales of $18 million in the general industrial market, primarily due to lower sales of industrial vehicle products to off-highway vehicle platforms.platforms in the general industrial market.

Operating income increased $3$18 million, or 2%,12%, to $148$166 million from the comparable prior year period, whileand operating margin decreasedincreased 50110 basis points to 15.9%,17.0%, asprimarily due to favorable overhead absorption on higher salessales, wasthe benefits of the Company's restructuring initiatives, and favorable foreign currency translation, partially offset by currentunfavorable period restructuring costs and higher investment in research and development.mix.

New orders increased $87$57 million as compared to the prior year, primarily due to an increase in orders for surfacesensors treatmentand servicesEM actuation products within our A&D markets.markets as well as increase in orders for general industrial products.

Sales increased $95$108 million, or 12%, to $911$1,019 million, from the comparable prior year period. In the ground defense market, sales increased $47$38 million primarily due to higherthe demandtiming forof tacticaldomestic battlefieldsales communicationsof embedded computing equipment. Sales in the aerospace defense market increased $42$35 million primarily due to higher demandsales forof embedded computing equipment on various helicopterinternational andprograms fighteras jetwell as domestic unmanned aerial vehicle programs. In the commercialnaval aerospacedefense market, sales benefited $10$17 million primarily fromdue to higher OEMsales demandof forembedded computing equipment supporting various domestic and international programs. Sales in the commercial aerospace market increased $16 million primarily due to higher sales of our flight data recorder and avionics andtechnology electronicsto onOEM various platforms.customers.

Operating income increased $33$53 million, or 17%,24%, to $225$278 million compared with the same period in 2023,2024, and operating margin increased 120260 basis points to 24.7%,27.3%, primarily due to favorable overhead absorption on higher A&Dsales, sales.the benefits from both our operational excellence and restructuring initiatives, and favorable mix on defense electronics products. These increases were partially offset by higher investment in research and development.

New orders increaseddecreased $120$82 million as compared to the prior year, primarily due to anthe increasetiming inof orders foron avionicsaerospace and ground defense equipment, including embedded computing equipment.and tactical communications products.

Sales increased $136$225 million, or 12%,18%, to $1,278$1,503 million, from the comparable prior year period. In the naval defense market, sales increased $95$106 million primarily due to higher demand and the timing of salesproduction on variousthe Columbia-class and Virginia-class submarine programs, as well as higher foreignsales militaryof sales.aftermarket fleet services. Sales in the power & process market increased $33$99 million primarily due to the incremental impact from our I&C Solutions acquisition as well as higher organic sales of commercial nuclear aftermarket salesproducts supporting the maintenance of existing operating reactors in North America, partially offset byand the wind-downdevelopment onof thenext-generation Chinaadvanced Direct AP1000 program.reactors. In the aerospace defense market, sales increased $7$12 million primarily due to higher demandsales forof arresting systems equipment supporting various domesticinternational customers.

New orders increased $399$383 million as compared to the prior year, primarily due to anthe increasetiming inof naval defense orders supportingas aircraftwell carrieras andan submarineincrease programs.in orders for commercial nuclear products.

Sales increased $265$281 million, or 14%,13%, to $2,170$2,451 million, as compared to the prior year period, primarily due to higher sales across all markets. Sales in the aerospace defense market increased primarily due to higher demandsales forof bothembedded computing and arresting systems equipment supporting various domesticinternational customerscustomers, as well as embeddedhigher computingdemand for actuation equipment and surface treatment services on various helicopterdomestic and international fighter jet programs. Sales in the ground defense market increased primarily due to higher demandsales forof tacticalEM battlefieldactuation communicationsequipment as well as embedded computing equipment. Sales increases in the naval defense market were primarily due to higher demand andas well as the timing of salesproduction on variousthe Columbia-class and Virginia-class submarine programs as well as higher foreignsales militaryof sales.aftermarket fleet services. Sales in the naval defense market also increased due to higher sales of embedded computing equipment supporting various domestic and international programs. Sales in the commercial aerospace market primarily benefited from higher demand for OEM sensors products and actuation products, surface treatment services on narrowbodyvarious narrow-body and widebodywide-body platforms,platforms as well as higher sales of our flight data recorder and avionics equipmenttechnology onto variousOEM platforms.customers.

Commercial sales increased $11$96 million, or 1%,10%, to $951$1,047 million. Sales in the power & process market increased primarily benefiteddue to the incremental impact from our I&C Solutions acquisition, as well as higher organic sales of commercial nuclear aftermarket salesproducts supporting the maintenance of existing operating reactors in North America, partially offset byand the wind-downdevelopment onof next-generation advanced reactors. Sales in the China Direct AP1000 program. The general industrial market waswere negativelyessentially impacted by lower sales of industrial vehicle products to off-highway vehicle platforms.flat.

Cash provided by operating activities increased $96$99 million to $544$643 million from the comparable prior year period, primarily due to higher net earnings and improved working capital.earnings.

Our capital expenditures were $61$90 million and $45$61 million for 20242025 and 2023,2024, respectively, with the increase primarily due to higher capital spending in the DefenseAerospace Electronics& Industrial and Naval & Power segments during the current period.

There have been no material changes in our Risk Factors during the threesix months ended MarchJune 31,30, 2026. Information regarding our Risk Factors is more fully described in "Item 1A. Risk Factors" of our 2025 Annual Report on Form 10-K filed with the SEC.10-K.