CURTISS WRIGHT CORP, 10-Q filed on 7/31/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Document And Entity Information [Abstract]
 
Entity Registrant Name
Curtiss Wright Corporation 
Entity Central Index Key
0000026324 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Large Accelerated Filer 
Document Type
10-Q 
Document Period End Date
Jun. 30, 2014 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
Q2 
Amendment Flag
false 
Entity common stock shares outstanding
48,134,633 
Entity well known seasoned issuer
Yes 
Entity Voluntary Filers
No 
Entity Current Reporting Status
Yes 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Net sales
 
 
 
 
Product sales
$ 521,815 
$ 491,056 
$ 1,032,187 
$ 953,506 
Service sales
130,637 
106,638 
245,695 
212,741 
Total net sales
652,452 
597,694 
1,277,882 
1,166,247 
Cost of sales
 
 
 
 
Cost of product sales
350,758 
330,451 
699,507 
650,024 
Cost of service sales
85,491 
69,558 
161,097 
138,912 
Total cost of sales
436,249 
400,009 
860,604 
788,936 
Gross profit
216,203 
197,685 
417,278 
377,311 
Research and development expenses
17,621 
14,851 
34,745 
31,016 
Selling expenses
37,047 
37,202 
75,295 
72,006 
General and administrative expenses
84,885 
85,053 
166,780 
173,388 
Operating income
76,650 
60,579 
140,458 
100,901 
Interest expense
(8,988)
(9,342)
(18,044)
(18,005)
Other income, net
64 
200 
118 
645 
Earnings from continuing operations before income taxes
67,726 
51,437 
122,532 
83,541 
Provision for income taxes
21,917 
16,376 
38,271 
26,335 
Earnings from continuing operations
45,809 
35,061 
84,261 
57,206 
Discontinued operations, net of taxes
 
 
 
 
Loss from discontinued operations
(4,994)
(1,691)
(8,282)
(2,893)
Loss on divestitures
(4,424)
0 
(4,424)
0 
Loss from discontinued operations
(9,418)
(1,691)
(12,706)
(2,893)
Net earnings
$ 36,391 
$ 33,370 
$ 71,555 
$ 54,313 
Basic earnings per share
 
 
 
 
Earnings from continuing operations (usd per share)
$ 0.96 
$ 0.75 
$ 1.75 
$ 1.22 
Earnings from discontinued operations (usd per share)
$ (0.20)
$ (0.04)
$ (0.26)
$ (0.06)
Total, Basic earnings per share (usd per share)
$ 0.76 
$ 0.71 
$ 1.49 
$ 1.16 
Diluted earnings per share
 
 
 
 
Earnings from continuing operations (usd per share)
$ 0.93 
$ 0.74 
$ 1.72 
$ 1.20 
Earnings from discontinued operations (usd per share)
$ (0.19)
$ (0.04)
$ (0.26)
$ (0.06)
Total, Diluted earnings per share (usd per share)
$ 0.74 
$ 0.70 
$ 1.46 
$ 1.14 
Dividends per share
$ 0.13 
$ 0.10 
$ 0.26 
$ 0.19 
Weighted average shares outstanding:
 
 
 
 
Basic (shares)
48,175 
46,786 
48,055 
46,700 
Diluted (shares)
49,239 
47,507 
49,160 
47,478 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net earnings
$ 36,391 
$ 33,370 
$ 71,555 
$ 54,313 
Other comprehensive income
 
 
 
 
Foreign currency translation, net of tax (1)
17,737 1
(9,945)1
7,820 1
(41,750)1
Pension and postretirement adjustments, net of tax (2)
914 2
52,865 2
1,700 2
55,651 2
Other comprehensive income, net of tax
18,651 
42,920 
9,520 
13,901 
Comprehensive income
$ 55,042 
$ 76,290 
$ 81,075 
$ 68,214 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax
$ 0.4 
$ 0.1 
$ 0.7 
$ (1.1)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax, Portion Attributable to Parent
$ (0.5)
$ (1.4)
$ (0.9)
$ (2.9)
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Current Assets:
 
 
Cash and cash equivalents
$ 194,140 
$ 175,294 
Receivables, net
621,415 
603,592 
Inventories, net
465,886 
452,087 
Deferred tax assets, net
48,272 
47,650 
Assets held for sale
10,799 
0 
Other current assets
69,053 
58,660 
Total current assets
1,409,565 
1,337,283 
Property, plant, and equipment, net
506,350 
515,718 
Goodwill
1,117,981 
1,110,429 
Other intangible assets, net
446,717 
471,379 
Other assets
26,022 
23,465 
Total assets
3,506,635 
3,458,274 
Current liabilities:
 
 
Current portion of long-term debt and short-term debt
775 
1,334 
Accounts payable
183,672 
186,941 
Accrued expenses
128,611 
142,935 
Income taxes payable
2,893 
789 
Deferred revenue
184,219 
164,343 
Other current liabilities
46,494 
38,251 
Total current liabilities
546,664 
534,593 
Long-term debt
933,489 
958,604 
Deferred tax liabilities, net
142,104 
123,644 
Accrued pension and other postretirement benefit costs
122,804 
138,904 
Long-term portion of environmental reserves
15,147 
15,498 
Other liabilities
111,854 
134,326 
Total liabilities
1,872,062 
1,905,569 
Stockholders' Equity
 
 
Common stock, $1 par value,100,000,000 shares authorized at June 30, 2014 and December 31, 2013; 49,189,702 shares issued at June 30, 2014 and December 31, 2013; outstanding shares were 48,134,633 at June 30, 2014 and 47,638,835 at December 31, 2013
49,190 
49,190 
Additional paid in capital
157,373 
150,618 
Retained earnings
1,440,000 
1,380,981 
Accumulated other comprehensive income
34,779 
25,259 
Common treasury stock, at cost (1,055,069 shares at June 30, 2014 and 1,550,867 shares at December 31, 2013)
(46,769)
(53,343)
Total stockholders' equity
1,634,573 
1,552,705 
Total liabilities and stockholders' equity
$ 3,506,635 
$ 3,458,274 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Common stock, par value (usd per share)
$ 1 
$ 1 
Common Stock, Shares Authorized
100,000,000 
100,000,000 
Common Stock, Shares, Issued
49,189,702 
49,189,702 
Common Stock, Shares, Outstanding
48,134,633 
47,638,835 
Treasury Stock, Shares
1,055,069 
1,550,867 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash flows from operating activities:
 
 
Net earnings
$ 71,555 
$ 54,313 
Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
Depreciation and amortization
61,386 
60,233 
Loss on divestitures
7,106 
0 
Net loss (gain) on sale of assets
389 
(92)
Deferred income taxes
10,695 
1,652 
Share-based compensation
4,286 
3,182 
Change in operating assets and liabilities, net of businesses acquired and divested:
 
 
Accounts receivable, net
(19,801)
9,133 
Inventories, net
(29,604)
(21,608)
Progress payments
(7,164)
(10,872)
Accounts payable and accrued expenses
(26,567)
(34,728)
Deferred revenue
20,430 
(4,010)
Income taxes payable
1,924 
(10,460)
Net pension and postretirement liabilities
(15,545)
10,752 
Other current and long-term assets and liabilities
5,327 
3,306 
Net cash provided by operating activities
84,417 
60,801 
Cash flows from investing activities:
 
 
Proceeds from sales and disposals of long lived assets
328 
944 
Proceeds from divestitures, net of cash sold
52,098 
0 
Additions to property, plant, and equipment
(35,996)
(32,126)
Acquisition of businesses, net of cash acquired
(34,362)
(97,886)
Additional consideration of prior period acquisitions
(230)
(4,107)
Net cash used for investing activities
(18,162)
(133,175)
Cash flows from financing activities:
 
 
Borrowings under revolving credit facility
362,563 
521,429 
Borrowings on debt
0 
400,000 
Payment of revolving credit facility
(413,203)
(817,776)
Repurchases of common stock
(23,911)
0 
Proceeds from share-based compensation
26,476 
8,853 
Dividends paid
(6,277)
(4,207)
Excess tax benefits from share-based compensation plans
6,657 
310 
Net cash provided by (used for) financing activities
(47,695)
108,609 
Effect of exchange-rate changes on cash
286 
(5,215)
Net increase in cash and cash equivalents
18,846 
31,020 
Cash and cash equivalents at beginning of period
175,294 
112,023 
Cash and cash equivalents at end of period
194,140 
143,043 
Supplemental disclosure of non-cash activities:
 
 
Capital expenditures incurred but not yet paid
1,371 
2,281 
Property and equipment acquired under build to suit transaction
$ 12,376 
$ 0 
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (USD $)
In Thousands, unless otherwise specified
Total
Common Stock Member
Additional Paid In Capital Member
Retained Earnings Member
Accumulated Other Comprehensive Loss Member
Treasury Stock Member
Beginning Balance at Dec. 31, 2012
 
$ 49,190 
$ 151,883 
$ 1,261,377 
$ (55,508)
$ (94,350)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net earnings
 
 
 
137,981 
 
 
Other comprehensive income, net of tax
80,767 
 
 
 
80,767 
 
Dividends paid/declared
 
 
 
(18,377)
 
 
Stock options exercised, net of tax
 
0 
(5,728)
 
 
34,451 
Restricted stock
 
 
(2,127)
 
 
5,796 
Share-based compensation
 
 
6,920 
 
 
430 
Other
 
 
(330)
 
 
330 
Ending Balance at Dec. 31, 2013
1,552,705 
49,190 
150,618 
1,380,981 
25,259 
(53,343)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net earnings
71,555 
 
 
71,555 
 
 
Other comprehensive income, net of tax
9,520 
 
 
 
9,520 
 
Dividends paid/declared
 
 
 
(12,536)
 
 
Stock options exercised, net of tax
 
0 
5,131 
 
 
26,719 
Restricted stock
 
 
(2,051)
 
 
3,155 
Share-based compensation
 
 
4,052 
 
 
234 
Repurchases of common stock
 
 
 
 
 
(23,911)
Other
 
 
(377)
 
 
377 
Ending Balance at Jun. 30, 2014
$ 1,634,573 
$ 49,190 
$ 157,373 
$ 1,440,000 
$ 34,779 
$ (46,769)
BASIS OF PRESENTATION
BASIS OF PRESENTATION
BASIS OF PRESENTATION

Curtiss-Wright Corporation and its subsidiaries (the Corporation or the Company) is a diversified, multinational manufacturing and service company that designs, manufactures, and overhauls precision components and systems and provides highly engineered products and services to the commercial/industrial, defense, and energy markets.

The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated.

The unaudited condensed consolidated financial statements of the Corporation have been prepared in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete long-term contracts under the percentage-of-completion accounting methods, the estimate of useful lives for property, plant, and equipment, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. In the three and six month periods ended June 30, 2014 and 2013, there were no individual significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2013 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

Changes in Segment Presentation

As a result of certain organizational changes in 2014, the Corporation revised its reportable segments to align to the major markets it currently serves: Commercial/Industrial, Defense, and Energy. Prior period financial information has been reclassified to conform to the current period presentation. The change in reportable segments did not impact the Corporation's previously reported Condensed Consolidated Financial Statements. See Note 11 of the Notes to the Condensed Consolidated Financial Statements for more information on the Corporation's reportable segments.

Discontinued operations

During the second quarter we sold our Benshaw and 3D Radar businesses, which had been previously reported within the Defense segment and reclassified the Vessels business, which had been previously reported within the Energy segment, as held for sale. Please refer to Footnote 3 of our Condensed Consolidated Financial Statements for further information. The results of operations of these businesses are reported as discontinued operations within our Condensed Consolidated Statements of Earnings. Prior year amounts have been restated to conform to the current year presentation.

Corrections to Prior Years Amounts

The presentation of net sales and cost of sales in the prior year's statement of earnings has been corrected to separately present the components of product and service sales and costs of sales. This change in presentation did not affect total net sales, total cost of sales, total gross profit, operating income, or net earnings.

Out of Period Correction of an Immaterial Error Related to Three and Six Month Periods ended June 30, 2013

In the third quarter of 2013, the Corporation recorded an out of period adjustment related to the three and six month periods ended June 30, 2013 of $18 million to decrease comprehensive income and increase our deferred tax liability to reflect the tax impact of a May 31, 2013 amendment to our Curtiss-Wright Pension Plan which required a plan remeasurement. This error did not affect our condensed consolidated statement of net earnings or condensed consolidated statements of cash flows for the three and nine month periods ended September 30, 2013 or the three and six month periods ended June 30, 2013.  The Corporation evaluated the effects of this error on the June 30, 2013 condensed consolidated financial statements and based on an analysis of quantitative and qualitative factors, the Corporation determined that the error was not material and, therefore, amendment of previously filed reports is not required. 

RECENTLY ISSUED ACCOUNTING STANDARDS

STANDARDS ISSUED BUT NOT YET EFFECTIVE

In May 2014, the FASB issued a comprehensive new revenue recognition standard which will supersede previous existing revenue recognition guidance. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective adoption. The Corporation is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In April 2014, new guidance was issued that amends the current discontinued operations guidance. The new guidance limits discontinued operation reporting to situations where the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results, and requires expanded disclosures for discontinued operations. The adoption of this new guidance will be effective prospectively for annual reporting periods beginning after December 15, 2014 and interim periods within those years, with early adoption permitted in certain instances. The Corporation plans to adopt the provisions of the new guidance during the first quarter of 2015. The significance of this guidance for the Corporation is dependent on any future divestitures or disposals.
ACQUISITION
ACQUISITION
ACQUISITIONS

The Corporation evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets. The Corporation has completed a number of acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements. This goodwill arises because the purchase prices for these businesses reflect the future earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition.  Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts.  Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

The Corporation allocates the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. In the months after closing, as the Corporation obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and as the Corporation learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price.  Adjustments to the purchase price allocation are made only for those items identified as of the acquisition date and prior to completion of the measurement period.

The Corporation acquired three businesses during the six months ended June 30, 2014, described in more detail below.

The amounts of net sales and net loss included in the Corporation’s consolidated statement of earnings from the acquisition date to the period ended June 30, 2014 are $6.8 million and $0.3 million, respectively.

COMMERCIAL/INDUSTRIAL

Component Coating and Repair Services Limited

On January 10, 2014, the Corporation acquired 100% of the issued and outstanding capital stock of Component Coating and Repair Services Limited (CCRS) for approximately £15 million ($25 million) in cash, net of cash acquired. The Share Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited into escrow as security for potential indemnification claims against the sellers. CCRS operates out of two locations in Glasgow and Alfreton in the United Kingdom and will operate within the Corporation's Commercial/Industrial segment. CCRS is a provider of corrosion resistant coatings and precision airfoil repair services for aerospace and industrial turbine applications. Revenues were approximately $9.9 million in the latest fiscal year ending May 31, 2013.

The purchase price of the acquisition has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)
CCRS

Accounts receivable
$
2,984

Inventory
64

Property, plant, and equipment
1,987

Other current and non-current assets
71

Intangible assets
9,560

Current and non-current liabilities
(1,754
)
Deferred income taxes
(2,058
)
Net tangible and intangible assets
10,854

Purchase price
24,644

Goodwill
$
13,790

 
 

Amount of tax deductible goodwill
$
—



ENERGY

Engemasa Pressure Relief Valves

On June 4, 2014, the Corporation acquired the valve division of Engemasa Engenharia E Materiais LTDA of Sao Carlos, Brazil
for approximately $1.8 million in cash. The division will operate within the Corporation's Energy segment.

Nuclear Power Services Inc.

On February 18, 2014, the Corporation acquired certain assets and assumed certain liabilities of Nuclear Power Services Inc. (NPSI) for approximately CAD 9 million (approximately $8.0 million) in cash. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type, including a portion of the purchase price held back as security for potential indemnification claims against the seller. NPSI is based in Ontario, Canada and will operate within the Corporation's Energy segment. NPSI provides qualified nuclear component sourcing, Equipment Qualification, Commercial Grade Dedication (CGD) services, and Instrumentation & Control component manufacturing primarily to the Canadian and International CANDU nuclear industry. NPSI generated revenues of approximately $4.9 million for the year ended December 31, 2013.

Supplemental Pro Forma Statements of Operations Data

The assets, liabilities and results of operations of the businesses acquired in 2014 were not material to the Corporation’s consolidated financial position or results of operations and therefore pro forma financial information for the acquisitions are not presented.

As it relates to the prior year, the following table presents unaudited consolidated pro forma financial information for the combined results of the Corporation and its completed business acquisitions during the year ended December 31, 2013 as if the acquisitions had occurred on January 1, 2013 for purposes of the financial information presented for the period ended June 30, 2013.
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(In thousands, except per share data)
2013
 
2013
Net sales
$
636,480

 
$
1,257,699

Net earnings from continuing operations
33,985

 
56,039

Diluted earnings per share from continuing operations
0.72

 
1.18



The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on historical financial information.  The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had the Corporation completed the acquisition on January 1, 2012. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition. The unaudited pro forma consolidated results reflect primarily the following pro forma pre-tax adjustments:

•
Additional amortization expense related to the fair value of identifiable intangible assets acquired of approximately $1.1 million and $2.7 million for the three and six months ended, June 30, 2013, respectively.
•
Additional interest expense associated with the incremental borrowings that would have been incurred to acquire these companies as of January 1, 2012 of $1.3 million and $3.1 million for the three and six months ended, June 30, 2013, respectively.
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Benshaw

On June 30, 2014, the Corporation sold the assets of its Benshaw business, which had been reported in the Defense segment, to Regal-Beloit Corporation for $50 million in cash. Benshaw's operating results are included in discontinued operations in the Corporation’s Consolidated Statement of Earnings for all periods presented.

The following table summarizes the result of the Corporation's Benshaw business as discontinued operations:
 
 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net sales
 
$
14,342

 
$
17,709

 
$
29,029

 
$
38,138

Loss from discontinued operations before income taxes
 
(2,360
)
 
(252
)
 
(3,061
)
 
(319
)
Income tax benefit
 
803

 
161

 
1,068

 
280

Loss on divestiture, after tax of $2754
 
$
(5,144
)
 
$
—

 
$
(5,144
)
 
$
—

Loss from discontinued operations
 
$
(6,701
)
 
$
(91
)
 
$
(7,137
)
 
$
(39
)


Vessels

In the second quarter of 2014, management committed to a plan to sell the Vessels business, within the Energy segment. The Corporation decided to divest the business because it was not considered core and to allow the Corporation to concentrate on higher-growth opportunities. As of June 30, 2014, the business has been classified as held for sale and the results of operations for the business have been presented as discontinued operations.

The following table summarizes the result of the Corporation's Vessels business as discontinued operations:
 
 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net sales
 
$
2,613

 
$
1,324

 
$
3,718

 
$
2,685

Loss from discontinued operations before income taxes
 
(4,902
)
 
(2,423
)
 
(8,054
)
 
(5,037
)
Income tax benefit
 
1,774

 
872

 
2,915

 
1,814

Loss from discontinued operations
 
$
(3,128
)
 
$
(1,551
)
 
$
(5,139
)
 
$
(3,223
)

The aggregate components of the assets classified as held for sale, are as follows:

(In thousands)
 
 
June 30, 2014
Assets held for sale:
 
 
 
Property, plant, and equipment, net
 
 
7,845

Goodwill
 
 
2,954

Total assets held for sale
 
 
10,799



3D Radar

On April 30, 2014, the Corporation sold the assets of the 3D Radar business, within the Defense segment, to Chemring Group PLC for $3.0 million in cash. Trade accounts receivable and payable were retained by the Corporation. The determination was made to divest the business as it was not considered a core business of the Corporation. The disposal resulted in a $0.7 million pre-tax gain and has been reported as discontinued operations in the Corporation's Consolidated Statement of Earnings. This business contributed $5.2 million in sales for the year ended December 31, 2013.
RECEIVABLES
RECEIVABLES
RECEIVABLES

Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables.  Substantially all amounts of unbilled receivables are expected to be billed and collected within one year. An immaterial amount of unbilled receivables are subject to retainage provisions. The amount of claims and unapproved change orders within our receivables balances are immaterial.

The composition of receivables is as follows:
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Billed receivables:
 
 
 
Trade and other receivables
$
454,802

 
$
444,841

Less: Allowance for doubtful accounts
(6,435
)
 
(6,857
)
Net billed receivables
448,367

 
437,984

Unbilled receivables:
 
 
 
Recoverable costs and estimated earnings not billed
187,588

 
184,120

Less: Progress payments applied
(14,540
)
 
(18,512
)
Net unbilled receivables
173,048

 
165,608

Receivables, net
$
621,415

 
$
603,592

INVENTORIES
INVENTORIES
    INVENTORIES

Inventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year. Long term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost (principally average cost) or market. The composition of inventories is as follows:
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Raw materials
$
228,405

 
$
231,219

Work-in-process
120,551

 
114,372

Finished goods and component parts
122,200

 
117,444

Inventoried costs related to long-term contracts
60,552

 
58,796

Gross inventories
531,708

 
521,831

Less:  Inventory reserves
(53,670
)
 
(54,400
)
Progress payments applied
(12,152
)
 
(15,344
)
Inventories, net
$
465,886

 
$
452,087



As of June 30, 2014 and December 31, 2013, inventory also includes capitalized contract development costs of $40.9 million and $37.1 million, respectively, related to certain aerospace and defense programs.  These capitalized costs will be liquidated as production units are delivered to the customers.  As of June 30, 2014 and December 31, 2013, $10.2 million and $13.8 million, respectively, are scheduled to be liquidated under existing firm orders.
GOODWILL
GOODWILL
GOODWILL

The changes in the carrying amount of goodwill, revised to reflect the Corporation's new segment structure, for the six months ended June 30, 2014 are as follows:
 
(In thousands)
 
Commercial/Industrial
 
Defense
 
Energy
 
Consolidated
December 31, 2013
$
347,819

 
$
485,431

 
$
277,179

 
$
1,110,429

Acquisitions
13,790

 
—

 
4,705

 
18,495

Assets held for sale
—

 
—

 
(2,954
)
 
(2,954
)
Divestitures
—

 
(11,355
)
 
—

 
(11,355
)
Goodwill adjustments
(1,002
)
 
(254
)
 
—

 
(1,256
)
Foreign currency translation adjustment
2,541

 
1,761

 
320

 
4,622

June 30, 2014
$
363,148

 
$
475,583

 
$
279,250

 
$
1,117,981

OTHER INTANGIBLE ASSETS, NET
OTHER INTANGIBLE ASSETS, NET
OTHER INTANGIBLE ASSETS, NET
 
The following tables present the cumulative composition of the Corporation’s intangible assets:
 
 
(In thousands)
June 30, 2014
 
Gross
 
Accumulated Amortization
 
Net
Technology
 
$
207,507

 
$
(88,626
)
 
$
118,881

Customer related intangibles
 
422,307

 
(129,871
)
 
292,436

Other intangible assets
 
59,186

 
(23,786
)
 
35,400

Total
 
$
689,000

 
$
(242,283
)
 
$
446,717

 
 
 
 
 
 
 
 
 
(In thousands)
December 31, 2013
 
Gross
 
Accumulated Amortization
 
Net
Technology
 
$
213,888

 
$
(88,644
)
 
$
125,244

Customer related intangibles
 
430,604

 
(127,194
)
 
303,410

Other intangible assets
 
66,436

 
(23,711
)
 
42,725

Total
 
$
710,928

 
$
(239,549
)
 
$
471,379



During the first six months of 2014, the Corporation acquired intangible assets of $13.5 million, primarily consisting of Customer related intangibles of $13.2 million with a weighted average amortization period of 13.3 years.
Total intangible amortization expense for the six months ended June 30, 2014 was $24.6 million as compared to $24.2 million in the prior year period.  The estimated amortization expense for the five years ending December 31, 2014 through 2018 is $46.8 million, $43.8 million, $42.5 million, $41.9 million, and $40.4 million, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
Forward Foreign Exchange and Currency Option Contracts
 
The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada.  The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions.  The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations.  Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.
 
Interest Rate Risks and Related Strategies
 
The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Corporation periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Corporation exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount.

For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates.

The notional amounts of the Corporation’s outstanding interest rate swaps designated as fair value hedges were $400 million at June 30, 2014.

The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities that the company has the ability to access.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves.

Level 3: Inputs are unobservable data points that are not corroborated by market data.

Based upon the fair value hierarchy, all of the forward foreign exchange contracts and interest rate swaps are valued at a Level 2.

Effects on Consolidated Balance Sheets

The location and amounts of derivative instrument fair values in the condensed consolidated balance sheet are below.
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Assets
 
 
 
Undesignated for hedge accounting
 
 
 
Forward exchange contracts
$
257

 
$
605

Total asset derivatives (A)
$
257

 
$
605

Liabilities
 
 
 
Designated for hedge accounting
 
 
 
Interest rate swaps
$
24,911

 
$
49,845

Undesignated for hedge accounting
 
 
 
Forward exchange contracts
$
394

 
$
277

Total liability derivatives (B)
$
25,305

 
$
50,122



(A)Forward exchange derivatives are included in Other current assets and interest rate swap assets are included in Other assets.
(B)Forward exchange derivatives are included in Other current liabilities and interest rate swap liabilities are included in Other liabilities.

Effects on Condensed Consolidated Statements of Earnings
 
Fair value hedge
 
The location and amount of gains or losses on the hedged fixed rate debt attributable to changes in the market interest rates and the offsetting gain (loss) on the related interest rate swaps for the three and six months ended June 30, were as follows:
 
 
(In thousands)
 
 
Gain/(Loss) on Swap
 
Gain/(Loss) on Borrowings
 
 
Three Months Ended
 
Six Months Ended
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
June 30,
 
June 30,
Income Statement Classification
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Other income, net
 
$
12,159

 
$
(25,623
)
 
$
24,934

 
$
(36,573
)
 
$
(12,159
)
 
$
25,623

 
$
(24,934
)
 
$
36,573



Undesignated hedges

The location and amount of gains and losses recognized in income on forward exchange derivative contracts not designated for hedge accounting for the three and six months ended June 30, were as follows:

 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
Derivatives not designated as hedging instrument
 
2014
 
2013
 
2014
 
2013
Forward exchange contracts:
 
 
 
 
 
 
 
 
General and administrative expenses
 
$
2,020

 
$
(4,275
)
 
$
(930
)
 
$
(5,836
)


Debt

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issues as of June 30, 2014.  Accordingly, all of the Corporation’s debt is valued at a Level 2.  The fair values described below may not be indicative of net realizable value or reflective of future fair values.  Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

 
June 30, 2014
 
December 31, 2013
(In thousands)
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Industrial revenue bond, due 2023
$
8,400

 
$
8,400

 
$
8,400

 
$
8,400

Revolving credit agreement, due 2017
—

 
—

 
50,000

 
50,000

5.51% Senior notes due 2017
150,000

 
164,094

 
150,000

 
163,059

3.84% Senior notes due 2021
99,523

 
99,523

 
98,632

 
98,632

3.70% Senior notes due 2023
225,000

 
220,111

 
225,000

 
209,140

3.85% Senior notes due 2025
94,253

 
94,253

 
88,555

 
88,555

4.24% Senior notes due 2026
186,572

 
186,572

 
173,557

 
173,557

4.05% Senior notes due 2028
69,741

 
69,741

 
64,411

 
64,411

4.11% Senior notes due 2028
100,000

 
95,431

 
100,000

 
89,252

Other debt
775

 
775

 
1,383

 
1,383

Total debt
$
934,264

 
$
938,900

 
$
959,938

 
$
946,389

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The following tables are consolidated disclosures of all domestic and foreign defined pension plans as described in the Corporation’s 2013 Annual Report on Form 10-K.  The postretirement benefits information includes the domestic Curtiss-Wright Corporation, Williams, and EMD postretirement benefit plans, as there are no foreign postretirement benefit plans.

Pension Plans

The components of net periodic pension cost for the three and six months ended June 30, 2014 and 2013 are as follows:

 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Service cost
$
6,372

 
$
10,899

 
$
12,742

 
$
21,718

Interest cost
7,552

 
6,781

 
15,096

 
13,516

Expected return on plan assets
(10,425
)
 
(8,875
)
 
(20,838
)
 
(17,761
)
Amortization of prior service cost
157

 
254

 
315

 
554

Amortization of unrecognized actuarial loss
1,483

 
3,935

 
2,966

 
8,207

Curtailments
—

 
2,711

 
—

 
2,711

Net periodic benefit cost
$
5,139

 
$
15,705

 
$
10,281

 
$
28,945



During the six months ended June 30, 2014, the Corporation made $22.7 million in contributions to the Curtiss-Wright Pension Plan, and expects to make total contributions of $40.0 million in 2014.  In addition, contributions of $2.8 million were made to the Corporation’s foreign benefit plans during the six months ended June 30, 2014.  Contributions to the foreign benefit plans are expected to be $3.4 million in 2014.

Other Postretirement Benefit Plans

The components of the Corporation's net postretirement benefit cost for the three and six months ended June 30, 2014 and 2013 are as follows:
 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Service cost
$
70

 
$
99

 
$
141

 
$
199

Interest cost
219

 
209

 
438

 
417

Amortization of prior service cost
(164
)
 
(157
)
 
(328
)
 
(314
)
Amortization of unrecognized actuarial gain
(202
)
 
(160
)
 
(405
)
 
(320
)
Net postretirement benefit cost (income)
$
(77
)
 
$
(9
)
 
$
(154
)
 
$
(18
)


During the six months ended June 30, 2014, the Corporation paid $0.7 million to the postretirement plans.  During 2014, the Corporation anticipates contributing $1.7 million to the postretirement plans.

Defined Contribution Retirement Plan

Effective January 1, 2014, all non-union employees who are not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation's sponsored 401(k) plan. The employer contributions include both employer match and non-elective contribution components, up to a maximum employer contribution of 6% of eligible compensation.  The expense relating to the plan was $7.7 million for the six months ended June 30, 2014.  The Corporation made $3.4 million in contributions to the plan during the six months ended June 30, 2014, and expects to make total contributions of $7.0 million in 2014.
EARNINGS PER SHARE
EARNINGS PER SHARE
EARNINGS PER SHARE
 
Diluted earnings per share were computed based on the weighted-average number of shares outstanding plus all potentially dilutive common shares.  A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
 
 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Basic weighted-average shares outstanding
48,175

 
46,786

 
48,055

 
46,700

Dilutive effect of stock options and deferred stock compensation
1,064

 
721

 
1,105

 
778

Diluted weighted-average shares outstanding
49,239

 
47,507

 
49,160

 
47,478



As of June 30, 2014, there were no options outstanding that were considered anti-dilutive. As of June 30, 2013 there were 618,000 stock options outstanding that could potentially dilute earnings per share in the future, which were excluded from the computation of diluted earnings per share, as they would be considered anti-dilutive.
SEGMENT INFORMATION
SEGMENT INFORMATION
SEGMENT INFORMATION
 
Prior to the first quarter of 2014, the Corporation reported its results of operations through three segments: Flow Control, Controls, and Surface Technologies. Beginning in the first quarter of 2014, the Corporation realigned its reportable segments with its end markets to strengthen its ability to service customers and recognize certain organizational efficiencies. As result of this realignment the Corporation has three new reportable segments: Commercial/Industrial, Defense, and Energy. The Corporation's former Surface Technologies segment is consolidated within the new Commercial/Industrial segment. The commercial businesses which were in the former Controls segment form part of the new Commercial/Industrial segment. The Corporation's defense businesses, which were primarily in the Corporation’s former Controls segment and to a lesser extent in the former Flow Control segment, are now consolidated within the new Defense segment. The Corporation's Oil and Gas and Nuclear divisions, which were in the former Flow Control segment, form the new Energy segment.

The Corporation's measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis because they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.

Net sales and operating income by reportable segment was as follows:

 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Net sales
 
 
 
 
 
 
 
Commercial/Industrial
$
276,280

 
$
241,960

 
$
543,205

 
$
462,416

Defense
192,690

 
193,632

 
380,336

 
381,807

Energy
185,233

 
164,074

 
357,972

 
325,617

Less: Intersegment revenues
(1,751
)
 
(1,972
)
 
(3,631
)
 
(3,593
)
Total consolidated
$
652,452

 
$
597,694

 
$
1,277,882

 
$
1,166,247

 
 
 
 
 
 
 
 
Operating income (expense)
 
 
 
 
 
 
 
Commercial/Industrial
$
37,741

 
$
27,010

 
$
70,224

 
$
47,063

Defense
24,454

 
29,854

 
47,723

 
47,057

Energy
20,720

 
15,791

 
36,361

 
29,155

Corporate and eliminations (1)
(6,265
)
 
(12,076
)
 
(13,850
)
 
(22,374
)
Total consolidated
$
76,650

 
$
60,579

 
$
140,458

 
$
100,901


(1) Corporate and eliminations includes pension expense, environmental remediation and administrative expenses, legal, foreign currency transactional gains and losses, and other expenses.

Operating income by reportable segment and the reconciliation to income from continuing operations before income taxes are as follows:

 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Total operating income
$
76,650

 
$
60,579

 
$
140,458

 
$
100,901

Interest expense
(8,988
)
 
(9,342
)
 
(18,044
)
 
(18,005
)
Other income, net
64

 
200

 
118

 
645

Earnings from continuing operations before income taxes
$
67,726

 
$
51,437

 
$
122,532

 
$
83,541



 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Identifiable assets
 
 
 
Commercial/Industrial
$
1,383,435

 
$
1,310,521

Defense
1,212,268

 
1,292,462

Energy
816,769

 
798,028

Corporate and Other
94,163

 
57,263

Total consolidated
$
3,506,635

 
$
3,458,274

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The cumulative balance of each component of accumulated other comprehensive (loss) income, net of tax, is as follows:
 
 
(In thousands)
 
Foreign currency translation adjustments, net
 
Total pension and postretirement adjustments, net
 
Accumulated other comprehensive income (loss)
December 31, 2012
$
65,722

 
$
(121,230
)
 
$
(55,508
)
Current period other comprehensive income (loss)
(6,619
)
 
87,386

 
80,767

December 31, 2013
$
59,103

 
$
(33,844
)
 
$
25,259

Other comprehensive income before reclassifications (1)
7,820

 
71

 
7,891

Amounts reclassified from accumulated other comprehensive income (1)
—

 
1,629

 
1,629

Net current period other comprehensive income
7,820

 
1,700

 
9,520

June 30, 2014
$
66,923

 
$
(32,144
)
 
$
34,779



(1)
All amounts are after tax.

Details of amounts reclassified from accumulated other comprehensive income (loss) are below:
 
 
(In thousands)
 
Amount reclassified from Accumulated other comprehensive income (loss)
 
Affected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
 
 
 
Amortization of prior service costs
13

 
(1)
Amortization of actuarial losses
(2,561
)
 
(1)
 
(2,548
)
 
Total before tax
 
919

 
Income tax
Total reclassifications
$
(1,629
)
 
Net of tax


(1)
These items are included in the computation of net periodic pension cost.  See Note 9, Pension and Other Postretirement Benefit Plans.
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS

Legal Proceedings

The Corporation has been named in a number of lawsuits that allege injury from exposure to asbestos.  To date, the Corporation has not been found liable for or paid any material sum of money in settlement in any case.  The Corporation believes its minimal use of asbestos in its past and current operations and the relatively non-friable condition of asbestos in its products makes it unlikely that it will face material liability in any asbestos litigation, whether individually or in the aggregate.  The Corporation maintains insurance coverage for these potential liabilities and believes adequate coverage exists to cover any unanticipated asbestos liability.

In December 2013, the Corporation, along with other unaffiliated parties, received a claim from Canadian Natural Resources Limited (CNRL) filed in the Court of Queen's Bench of Alberta, Judicial District of Calgary. The claim pertains to a January 2011 fire and explosion at a delayed coker unit at its Fort McMurray refinery that resulted in the injury of five CNRL employees, damage to property and equipment, and various forms of consequential loss, such as loss of profit, lost opportunities, and business interruption. The fire and explosion occurred when a CNRL employee bypassed certain safety controls and opened an operating coker unit. The total quantum of alleged damages arising from the incident has not been finalized, but is estimated to meet or exceed $1 billion.  The Corporation maintains various forms of commercial, property and casualty, product liability, and other forms of insurance; however, such insurance may not be adequate to cover the costs associated with a judgment against us. The Corporation is currently unable to estimate an amount, or range of potential losses, if any, from this matter. The Corporation believes it has adequate legal defenses and intends to defend this matter vigorously. The Corporation's financial condition, results of operations, and cash flows, could be materially affected during a future fiscal quarter or fiscal year by unfavorable developments or outcome regarding this claim.

In addition to the CNRL litigation, the Corporation is party to a number of other legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material effect on the Corporation’s results of operations or financial position.

Environmental Matters

The aggregate environmental liability was $15.9 million at June 30, 2014 and $16.3 million at December 31, 2013.  All environmental reserves exclude any potential recovery from insurance carriers or third-party legal actions.

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. At June 30, 2014 and December 31, 2013, there were $36.6 million and $47.2 million of stand-by letters of credit outstanding, respectively, and $25.9 million and $23.2 million of bank guarantees outstanding, respectively.   In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.  The Corporation has provided this financial assurance in the form of a $52.9 million surety bond.

AP1000 Program

Within the Corporation’s Defense segment, our Electro-Mechanical Division is the reactor coolant pump (RCP) supplier for the Westinghouse AP1000 nuclear power plants under construction in China and the United States.  The terms of the AP1000 China and United States contracts include liquidated damage provisions for failure to meet contractual delivery dates if the Corporation caused the delay and the delay was not excusable. The Corporation would be liable for liquidated damages if the Corporation was deemed responsible for not meeting the delivery dates. On October 10, 2013, the Corporation received a letter from Westinghouse stating entitlements to the maximum amount of liquidated damages allowable under the AP1000 China contract from Westinghouse of approximately $25 million. As of June 30, 2014, the Corporation has not met certain contractual delivery dates under its AP 1000 China and US contracts; however there are significant uncertainties as to which parties are responsible for the delays.  Given the uncertainties surrounding the responsibility for the delays no accrual has been made for this matter as of June 30, 2014.  As of June 30, 2014, the range of possible loss is $0 to $35 million for the delivery dates that have not been met.
BASIS OF PRESENTATION (Policies)
Basis Of Accounting 

Curtiss-Wright Corporation and its subsidiaries (the Corporation or the Company) is a diversified, multinational manufacturing and service company that designs, manufactures, and overhauls precision components and systems and provides highly engineered products and services to the commercial/industrial, defense, and energy markets.

The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated.

The unaudited condensed consolidated financial statements of the Corporation have been prepared in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete long-term contracts under the percentage-of-completion accounting methods, the estimate of useful lives for property, plant, and equipment, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. In the three and six month periods ended June 30, 2014 and 2013, there were no individual significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2013 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

Discontinued operations 
Discontinued operations

During the second quarter we sold our Benshaw and 3D Radar businesses, which had been previously reported within the Defense segment and reclassified the Vessels business, which had been previously reported within the Energy segment, as held for sale. Please refer to Footnote 3 of our Condensed Consolidated Financial Statements for further information. The results of operations of these businesses are reported as discontinued operations within our Condensed Consolidated Statements of Earnings. Prior year amounts have been restated to conform to the current year presentation.

Corrections of Prior Years Amounts 
Corrections to Prior Years Amounts

The presentation of net sales and cost of sales in the prior year's statement of earnings has been corrected to separately present the components of product and service sales and costs of sales. This change in presentation did not affect total net sales, total cost of sales, total gross profit, operating income, or net earnings.

Out of Period Correction of an Immaterial Error Related to Three and Six Month Periods ended June 30, 2013

In the third quarter of 2013, the Corporation recorded an out of period adjustment related to the three and six month periods ended June 30, 2013 of $18 million to decrease comprehensive income and increase our deferred tax liability to reflect the tax impact of a May 31, 2013 amendment to our Curtiss-Wright Pension Plan which required a plan remeasurement. This error did not affect our condensed consolidated statement of net earnings or condensed consolidated statements of cash flows for the three and nine month periods ended September 30, 2013 or the three and six month periods ended June 30, 2013.  The Corporation evaluated the effects of this error on the June 30, 2013 condensed consolidated financial statements and based on an analysis of quantitative and qualitative factors, the Corporation determined that the error was not material and, therefore, amendment of previously filed reports is not required. 

Changes in Segment Presentation

As a result of certain organizational changes in 2014, the Corporation revised its reportable segments to align to the major markets it currently serves: Commercial/Industrial, Defense, and Energy. Prior period financial information has been reclassified to conform to the current period presentation. The change in reportable segments did not impact the Corporation's previously reported Condensed Consolidated Financial Statements. See Note 11 of the Notes to the Condensed Consolidated Financial Statements for more information on the Corporation's reportable segments.
ACQUISITION (Table)
Schedule Of Business Acquisitions By Acquisition 
The purchase price of the acquisition has been allocated to the net tangible and intangible assets acquired with the remainder recorded as goodwill on the basis of estimated fair values, as follows:

(In thousands)
CCRS

Accounts receivable
$
2,984

Inventory
64

Property, plant, and equipment
1,987

Other current and non-current assets
71

Intangible assets
9,560

Current and non-current liabilities
(1,754
)
Deferred income taxes
(2,058
)
Net tangible and intangible assets
10,854

Purchase price
24,644

Goodwill
$
13,790

 
 

Amount of tax deductible goodwill
$
—

Business Acquisition Pro Forma Information 

As it relates to the prior year, the following table presents unaudited consolidated pro forma financial information for the combined results of the Corporation and its completed business acquisitions during the year ended December 31, 2013 as if the acquisitions had occurred on January 1, 2013 for purposes of the financial information presented for the period ended June 30, 2013.
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(In thousands, except per share data)
2013
 
2013
Net sales
$
636,480

 
$
1,257,699

Net earnings from continuing operations
33,985

 
56,039

Diluted earnings per share from continuing operations
0.72

 
1.18

DISCONTINUED OPERATIONS (Table)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures 
The following table summarizes the result of the Corporation's Benshaw business as discontinued operations:
 
 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net sales
 
$
14,342

 
$
17,709

 
$
29,029

 
$
38,138

Loss from discontinued operations before income taxes
 
(2,360
)
 
(252
)
 
(3,061
)
 
(319
)
Income tax benefit
 
803

 
161

 
1,068

 
280

Loss on divestiture, after tax of $2754
 
$
(5,144
)
 
$
—

 
$
(5,144
)
 
$
—

Loss from discontinued operations
 
$
(6,701
)
 
$
(91
)
 
$
(7,137
)
 
$
(39
)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures 
The following table summarizes the result of the Corporation's Vessels business as discontinued operations:
 
 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
 
2014
 
2013
 
2014
 
2013
Net sales
 
$
2,613

 
$
1,324

 
$
3,718

 
$
2,685

Loss from discontinued operations before income taxes
 
(4,902
)
 
(2,423
)
 
(8,054
)
 
(5,037
)
Income tax benefit
 
1,774

 
872

 
2,915

 
1,814

Loss from discontinued operations
 
$
(3,128
)
 
$
(1,551
)
 
$
(5,139
)
 
$
(3,223
)

The aggregate components of the assets classified as held for sale, are as follows:

(In thousands)
 
 
June 30, 2014
Assets held for sale:
 
 
 
Property, plant, and equipment, net
 
 
7,845

Goodwill
 
 
2,954

Total assets held for sale
 
 
10,799

RECEIVABLES (Table)
Schedule Of Accounts Notes Loans And Financing Receivable
The composition of receivables is as follows:
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Billed receivables:
 
 
 
Trade and other receivables
$
454,802

 
$
444,841

Less: Allowance for doubtful accounts
(6,435
)
 
(6,857
)
Net billed receivables
448,367

 
437,984

Unbilled receivables:
 
 
 
Recoverable costs and estimated earnings not billed
187,588

 
184,120

Less: Progress payments applied
(14,540
)
 
(18,512
)
Net unbilled receivables
173,048

 
165,608

Receivables, net
$
621,415

 
$
603,592

INVENTORIES (Table)
Schedule Of Inventory
The composition of inventories is as follows:
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Raw materials
$
228,405

 
$
231,219

Work-in-process
120,551

 
114,372

Finished goods and component parts
122,200

 
117,444

Inventoried costs related to long-term contracts
60,552

 
58,796

Gross inventories
531,708

 
521,831

Less:  Inventory reserves
(53,670
)
 
(54,400
)
Progress payments applied
(12,152
)
 
(15,344
)
Inventories, net
$
465,886

 
$
452,087

GOODWILL (Table)
Schedule Of Goodwill
The changes in the carrying amount of goodwill, revised to reflect the Corporation's new segment structure, for the six months ended June 30, 2014 are as follows:
 
(In thousands)
 
Commercial/Industrial
 
Defense
 
Energy
 
Consolidated
December 31, 2013
$
347,819

 
$
485,431

 
$
277,179

 
$
1,110,429

Acquisitions
13,790

 
—

 
4,705

 
18,495

Assets held for sale
—

 
—

 
(2,954
)
 
(2,954
)
Divestitures
—

 
(11,355
)
 
—

 
(11,355
)
Goodwill adjustments
(1,002
)
 
(254
)
 
—

 
(1,256
)
Foreign currency translation adjustment
2,541

 
1,761

 
320

 
4,622

June 30, 2014
$
363,148

 
$
475,583

 
$
279,250

 
$
1,117,981

OTHER INTANGIBLE ASSETS, NET (Table)
Schedule Of Intangible Assets By Major Class
The following tables present the cumulative composition of the Corporation’s intangible assets:
 
 
(In thousands)
June 30, 2014
 
Gross
 
Accumulated Amortization
 
Net
Technology
 
$
207,507

 
$
(88,626
)
 
$
118,881

Customer related intangibles
 
422,307

 
(129,871
)
 
292,436

Other intangible assets
 
59,186

 
(23,786
)
 
35,400

Total
 
$
689,000

 
$
(242,283
)
 
$
446,717

 
 
 
 
 
 
 
 
 
(In thousands)
December 31, 2013
 
Gross
 
Accumulated Amortization
 
Net
Technology
 
$
213,888

 
$
(88,644
)
 
$
125,244

Customer related intangibles
 
430,604

 
(127,194
)
 
303,410

Other intangible assets
 
66,436

 
(23,711
)
 
42,725

Total
 
$
710,928

 
$
(239,549
)
 
$
471,379

FAIR VALUE OF FINANCIAL INSTRUMENTS (Table)
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] 
The location and amounts of derivative instrument fair values in the condensed consolidated balance sheet are below.
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Assets
 
 
 
Undesignated for hedge accounting
 
 
 
Forward exchange contracts
$
257

 
$
605

Total asset derivatives (A)
$
257

 
$
605

Liabilities
 
 
 
Designated for hedge accounting
 
 
 
Interest rate swaps
$
24,911

 
$
49,845

Undesignated for hedge accounting
 
 
 
Forward exchange contracts
$
394

 
$
277

Total liability derivatives (B)
$
25,305

 
$
50,122



(A)Forward exchange derivatives are included in Other current assets and interest rate swap assets are included in Other assets.
(B)Forward exchange derivatives are included in Other current liabilities and interest rate swap liabilities are included in Other liabilities.
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] 
The location and amount of gains or losses on the hedged fixed rate debt attributable to changes in the market interest rates and the offsetting gain (loss) on the related interest rate swaps for the three and six months ended June 30, were as follows:
 
 
(In thousands)
 
 
Gain/(Loss) on Swap
 
Gain/(Loss) on Borrowings
 
 
Three Months Ended
 
Six Months Ended
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
 
June 30,
 
June 30,
Income Statement Classification
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Other income, net
 
$
12,159

 
$
(25,623
)
 
$
24,934

 
$
(36,573
)
 
$
(12,159
)
 
$
25,623

 
$
(24,934
)
 
$
36,573



Undesignated hedges

The location and amount of gains and losses recognized in income on forward exchange derivative contracts not designated for hedge accounting for the three and six months ended June 30, were as follows:

 
(In thousands)
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30,
 
June 30,
Derivatives not designated as hedging instrument
 
2014
 
2013
 
2014
 
2013
Forward exchange contracts:
 
 
 
 
 
 
 
 
General and administrative expenses
 
$
2,020

 
$
(4,275
)
 
$
(930
)
 
$
(5,836
)
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] 
 
June 30, 2014
 
December 31, 2013
(In thousands)
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Industrial revenue bond, due 2023
$
8,400

 
$
8,400

 
$
8,400

 
$
8,400

Revolving credit agreement, due 2017
—

 
—

 
50,000

 
50,000

5.51% Senior notes due 2017
150,000

 
164,094

 
150,000

 
163,059

3.84% Senior notes due 2021
99,523

 
99,523

 
98,632

 
98,632

3.70% Senior notes due 2023
225,000

 
220,111

 
225,000

 
209,140

3.85% Senior notes due 2025
94,253

 
94,253

 
88,555

 
88,555

4.24% Senior notes due 2026
186,572

 
186,572

 
173,557

 
173,557

4.05% Senior notes due 2028
69,741

 
69,741

 
64,411

 
64,411

4.11% Senior notes due 2028
100,000

 
95,431

 
100,000

 
89,252

Other debt
775

 
775

 
1,383

 
1,383

Total debt
$
934,264

 
$
938,900

 
$
959,938

 
$
946,389

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Table)
Schedule Of Defined Benefit Plans Disclosures 
The components of net periodic pension cost for the three and six months ended June 30, 2014 and 2013 are as follows:

 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Service cost
$
6,372

 
$
10,899

 
$
12,742

 
$
21,718

Interest cost
7,552

 
6,781

 
15,096

 
13,516

Expected return on plan assets
(10,425
)
 
(8,875
)
 
(20,838
)
 
(17,761
)
Amortization of prior service cost
157

 
254

 
315

 
554

Amortization of unrecognized actuarial loss
1,483

 
3,935

 
2,966

 
8,207

Curtailments
—

 
2,711

 
—

 
2,711

Net periodic benefit cost
$
5,139

 
$
15,705

 
$
10,281

 
$
28,945

Schedule Of Defined Benefit Plans Disclosures 
three and six months ended June 30, 2014 and 2013 are as follows:
 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Service cost
$
70

 
$
99

 
$
141

 
$
199

Interest cost
219

 
209

 
438

 
417

Amortization of prior service cost
(164
)
 
(157
)
 
(328
)
 
(314
)
Amortization of unrecognized actuarial gain
(202
)
 
(160
)
 
(405
)
 
(320
)
Net postretirement benefit cost (income)
$
(77
)
 
$
(9
)
 
$
(154
)
 
$
(18
)


EARNINGS PER SHARE (Table)
Schedule of Earnings Per Share Reconciliation
A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
 
 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Basic weighted-average shares outstanding
48,175

 
46,786

 
48,055

 
46,700

Dilutive effect of stock options and deferred stock compensation
1,064

 
721

 
1,105

 
778

Diluted weighted-average shares outstanding
49,239

 
47,507

 
49,160

 
47,478

SEGMENT INFORMATION (Table)
Schedule Of Segment Reporting Information By Segment 
 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Net sales
 
 
 
 
 
 
 
Commercial/Industrial
$
276,280

 
$
241,960

 
$
543,205

 
$
462,416

Defense
192,690

 
193,632

 
380,336

 
381,807

Energy
185,233

 
164,074

 
357,972

 
325,617

Less: Intersegment revenues
(1,751
)
 
(1,972
)
 
(3,631
)
 
(3,593
)
Total consolidated
$
652,452

 
$
597,694

 
$
1,277,882

 
$
1,166,247

 
 
 
 
 
 
 
 
Operating income (expense)
 
 
 
 
 
 
 
Commercial/Industrial
$
37,741

 
$
27,010

 
$
70,224

 
$
47,063

Defense
24,454

 
29,854

 
47,723

 
47,057

Energy
20,720

 
15,791

 
36,361

 
29,155

Corporate and eliminations (1)
(6,265
)
 
(12,076
)
 
(13,850
)
 
(22,374
)
Total consolidated
$
76,650

 
$
60,579

 
$
140,458

 
$
100,901


(1) Corporate and eliminations includes pension expense, environmental remediation and administrative expenses, legal, foreign currency transactional gains and losses, and other expenses.
Reconciliation of Operating Profit (Loss) from Segments to Consolidated 
Operating income by reportable segment and the reconciliation to income from continuing operations before income taxes are as follows:

 
(In thousands)
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Total operating income
$
76,650

 
$
60,579

 
$
140,458

 
$
100,901

Interest expense
(8,988
)
 
(9,342
)
 
(18,044
)
 
(18,005
)
Other income, net
64

 
200

 
118

 
645

Earnings from continuing operations before income taxes
$
67,726

 
$
51,437

 
$
122,532

 
$
83,541

Reconciliation Of Assets From Segment To Consolidated 
 
(In thousands)
 
June 30, 2014
 
December 31, 2013
Identifiable assets
 
 
 
Commercial/Industrial
$
1,383,435

 
$
1,310,521

Defense
1,212,268

 
1,292,462

Energy
816,769

 
798,028

Corporate and Other
94,163

 
57,263

Total consolidated
$
3,506,635

 
$
3,458,274

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Table)
Schedule of Comprehensive Income (Loss) 
The cumulative balance of each component of accumulated other comprehensive (loss) income, net of tax, is as follows:
 
 
(In thousands)
 
Foreign currency translation adjustments, net
 
Total pension and postretirement adjustments, net
 
Accumulated other comprehensive income (loss)
December 31, 2012
$
65,722

 
$
(121,230
)
 
$
(55,508
)
Current period other comprehensive income (loss)
(6,619
)
 
87,386

 
80,767

December 31, 2013
$
59,103

 
$
(33,844
)
 
$
25,259

Other comprehensive income before reclassifications (1)
7,820

 
71

 
7,891

Amounts reclassified from accumulated other comprehensive income (1)
—

 
1,629

 
1,629

Net current period other comprehensive income
7,820

 
1,700

 
9,520

June 30, 2014
$
66,923

 
$
(32,144
)
 
$
34,779



(1)
All amounts are after tax.
Reclassification out of Accumulated Other Comprehensive Income 
Details of amounts reclassified from accumulated other comprehensive income (loss) are below:
 
 
(In thousands)
 
Amount reclassified from Accumulated other comprehensive income (loss)
 
Affected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
 
 
 
Amortization of prior service costs
13

 
(1)
Amortization of actuarial losses
(2,561
)
 
(1)
 
(2,548
)
 
Total before tax
 
919

 
Income tax
Total reclassifications
$
(1,629
)
 
Net of tax


(1)
These items are included in the computation of net periodic pension cost.  See Note 9, Pension and Other Postretirement Benefit Plans.
BASIS OF PRESENTATION - Narrative (Details) (Change in Assumptions for Pension Plans [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2013
Change in Assumptions for Pension Plans [Member]
 
Prior period reclassification adjustment
$ 18 
ACQUISITION (Narrative) (Detail)
6 Months Ended 12 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 6 Months Ended 0 Months Ended 12 Months Ended
Jun. 30, 2014
USD ($)
NumberAcquisitions
May 31, 2013
Component Coating and Repair Services [Member]
USD ($)
Jan. 10, 2014
Component Coating and Repair Services [Member]
Commercial Industrial [Member]
USD ($)
Jan. 10, 2014
Component Coating and Repair Services [Member]
Commercial Industrial [Member]
GBP (£)
Jun. 30, 2014
Component Coating and Repair Services [Member]
Commercial Industrial [Member]
Jun. 4, 2014
Engemasa Pressure Relief Valve [Member]
Energy [Member]
USD ($)
Jun. 30, 2014
Engemasa Pressure Relief Valve [Member]
Energy [Member]
Feb. 18, 2014
NPSI [Member]
Energy [Member]
USD ($)
Feb. 18, 2014
NPSI [Member]
Energy [Member]
CAD ($)
Dec. 31, 2013
NPSI [Member]
Energy [Member]
USD ($)
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
Number of Businesses Acquired
3 
 
 
 
 
 
 
 
 
 
Effective date of acquisition
 
 
 
 
Jan. 10, 2014 
 
Jun. 04, 2014 
Feb. 18, 2014 
Feb. 18, 2014 
 
Purchase price net of cash acquired
 
 
$ 24,644,000 
£ 15,000,000 
 
$ 1,800,000 
 
$ 8,000,000 
$ 9,000,000 
 
Revenue reported by acquiree in last reporting period
 
9,900,000 
 
 
 
 
 
 
 
4,900,000 
Actual pro forma Revenue by acquiree
6,800,000 
 
 
 
 
 
 
 
 
 
Actual pro forma earnings of aquiree
$ 300,000 
 
 
 
 
 
 
 
 
 
ACQUISITION (Detail)
In Thousands, unless otherwise specified
0 Months Ended
Jun. 30, 2014
USD ($)
Dec. 31, 2013
USD ($)
Jun. 30, 2014
Commercial Industrial [Member]
USD ($)
Dec. 31, 2013
Commercial Industrial [Member]
USD ($)
Jan. 10, 2014
Component Coating and Repair Services [Member]
Commercial Industrial [Member]
USD ($)
Jan. 10, 2014
Component Coating and Repair Services [Member]
Commercial Industrial [Member]
GBP (£)
Business Acquisition [Line Items]
 
 
 
 
 
 
Accounts receivable
 
 
 
 
$ 2,984 
 
Inventory
 
 
 
 
64 
 
Property, plant, and equipment
 
 
 
 
1,987 
 
Other current and non-current assets
 
 
 
 
71 
 
Intangible assets
 
 
 
 
9,560 
 
Current and non-current liabilities
 
 
 
 
(1,754)
 
Deferred income taxes
 
 
 
 
(2,058)
 
Net tangible and intangible assets
 
 
 
 
10,854 
 
Purchase price
 
 
 
 
24,644 
15,000 
Goodwill
1,117,981 
1,110,429 
363,148 
347,819 
13,790 
 
Amount of tax deductible goodwill
 
 
 
 
$ 0 
 
ACQUISITION (Proforma) (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2013
Business Combinations [Abstract]
 
 
Net sales
$ 636,480 
$ 1,257,699 
Net earnings from continuing operations
$ 33,985 
$ 56,039 
Diluted earnings per share from continuing operations (in usd per share)
$ 0.72 
$ 1.18 
ACQUISITION (Proforma Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2013
Business Acquisition [Line Items]
 
 
Additional amortization of intangible assets
$ 1.1 
$ 2.7 
Additional interest expense
$ 1.3 
$ 3.1 
DISCONTINUED OPERATIONS (Detail) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 12 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Benshaw [Member]
Jun. 30, 2013
Benshaw [Member]
Jun. 30, 2014
Benshaw [Member]
Jun. 30, 2013
Benshaw [Member]
Jun. 30, 2014
Vessels [Member]
Jun. 30, 2013
Vessels [Member]
Jun. 30, 2014
Vessels [Member]
Jun. 30, 2013
Vessels [Member]
Jun. 30, 2014
3 D Radar [Member]
Dec. 31, 2013
3 D Radar [Member]
Apr. 30, 2014
3 D Radar [Member]
Income Statement Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of assets
 
 
 
 
$ 50,000,000 
 
$ 50,000,000 
 
 
 
 
 
 
 
$ 3,000,000 
Net sales
 
 
 
 
14,342,000 
17,709,000 
29,029,000 
38,138,000 
2,613,000 
1,324,000 
3,718,000 
2,685,000 
 
5,200,000 
 
Loss from discontinued operations before income taxes
 
 
 
 
(2,360,000)
(252,000)
(3,061,000)
(319,000)
(4,902,000)
(2,423,000)
(8,054,000)
(5,037,000)
700,000 
 
 
Income tax benefit
 
 
 
 
803,000 
161,000 
1,068,000 
280,000 
1,774,000 
872,000 
2,915,000 
1,814,000 
 
 
 
Loss on divestiture, after tax of $2754
(4,424,000)
0 
(4,424,000)
0 
(5,144,000)
0 
(5,144,000)
0 
 
 
 
 
 
 
 
Loss from discontinued operations
(9,418,000)
(1,691,000)
(12,706,000)
(2,893,000)
(6,701,000)
(91,000)
(7,137,000)
(39,000)
(3,128,000)
(1,551,000)
(5,139,000)
(3,223,000)
 
 
 
Year-to-date taxes
 
 
 
 
 
 
2,754,000,000 
 
 
 
 
 
 
 
 
Assets held for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant, and equipment, net
 
 
 
 
 
 
 
 
7,845,000 
 
7,845,000 
 
 
 
 
Goodwill
 
 
 
 
 
 
 
 
2,954,000 
 
2,954,000 
 
 
 
 
Total assets held for sale
 
 
 
 
 
 
 
 
$ 10,799,000 
 
$ 10,799,000 
 
 
 
 
RECEIVABLES (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Billed receivables:
 
 
Trade and other receivables
$ 454,802 
$ 444,841 
Less: Allowance for doubtful accounts
(6,435)
(6,857)
Net billed receivables
448,367 
437,984 
Unbilled receivables:
 
 
Recoverable costs and estimated earnings not billed
187,588 
184,120 
Less: Progress payments applied
(14,540)
(18,512)
Net unbilled receivables
173,048 
165,608 
Receivables, net
$ 621,415 
$ 603,592 
INVENTORIES (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Inventory, Net [Abstract]
 
 
Raw material
$ 228,405 
$ 231,219 
Work-in-process
120,551 
114,372 
Finished goods and component parts
122,200 
117,444 
Inventoried costs related to long-term contracts
60,552 
58,796 
Gross inventories
531,708 
521,831 
Less: Inventory reserves
(53,670)
(54,400)
Progress payments applied
(12,152)
(15,344)
Inventories, net
$ 465,886 
$ 452,087 
INVENTORIES (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Inventory, Net [Abstract]
 
 
Other inventory, capitalized costs
$ 40.9 
$ 37.1 
Other inventory, capitalized costs to be liquidated under firm orders
$ 10.2 
$ 13.8 
GOODWILL (Detail) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Goodwill [Roll Forward]
 
December 31, 2013
$ 1,110,429 
Acquisitions
18,495 
Assets held for sale
(2,954)
Divestitures
(11,355)
Goodwill adjustments
(1,256)
Foreign currency translation adjustment
4,622 
June 30, 2014
1,117,981 
Commercial Industrial [Member]
 
Goodwill [Roll Forward]
 
December 31, 2013
347,819 
Acquisitions
13,790 
Assets held for sale
0 
Divestitures
0 
Goodwill adjustments
(1,002)
Foreign currency translation adjustment
2,541 
June 30, 2014
363,148 
Defense [Member]
 
Goodwill [Roll Forward]
 
December 31, 2013
485,431 
Acquisitions
0 
Assets held for sale
0 
Divestitures
(11,355)
Goodwill adjustments
(254)
Foreign currency translation adjustment
1,761 
June 30, 2014
475,583 
Energy [Member]
 
Goodwill [Roll Forward]
 
December 31, 2013
277,179 
Acquisitions
4,705 
Assets held for sale
(2,954)
Divestitures
0 
Goodwill adjustments
0 
Foreign currency translation adjustment
320 
June 30, 2014
$ 279,250 
OTHER INTANGIBLE ASSETS, NET (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Finite Lived Intangible Assets [Line Items]
 
 
Gross
$ 689,000 
$ 710,928 
Accumulated Amortization
(242,283)
(239,549)
Net
446,717 
471,379 
Technology [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Gross
207,507 
213,888 
Accumulated Amortization
(88,626)
(88,644)
Net
118,881 
125,244 
Customer Related Intangibles [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Gross
422,307 
430,604 
Accumulated Amortization
(129,871)
(127,194)
Net
292,436 
303,410 
Other Intangible Assets [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Gross
59,186 
66,436 
Accumulated Amortization
(23,786)
(23,711)
Net
$ 35,400 
$ 42,725 
OTHER INTANGIBLE ASSETS, NET (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Finite Lived Intangible Assets [Line Items]
 
 
Acquired intangible assets
$ 13.5 
 
Amortization expense
24.6 
24.2 
Future amortization expense in remainder of fiscal year
46.8 
 
Future amortization expense in year two
43.8 
 
Future amortization expense in year three
42.5 
 
Future amortization expense in year four
41.9 
 
Future amortization expense in year five
40.4 
 
Customer-Related Intangible Assets [Member]
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Acquired intangible assets
$ 13.2 
 
Weighted average useful life
13 years 3 months 18 days 
 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Interest Rate Swap) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Fair Value Disclosures [Abstract]
 
Notional amount
$ 400 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Balance Sheet) (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Assets
$ 257 1
$ 605 1
Liabilities
25,305 2
50,122 2
Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Liabilities
24,911 
49,845 
Not Designated as Hedging Instrument [Member] |
Foreign Exchange Forward [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Assets
257 
605 
Liabilities
$ 394 
$ 277 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Income Loss) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
General And Administrative Expense [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
General and administrative expenses
$ 2,020 
$ (4,275)
$ (930)
$ (5,836)
Swap [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Other income, net
12,159 
(25,623)
24,934 
(36,573)
Borrowings [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Other income, net
$ (12,159)
$ 25,623 
$ (24,934)
$ 36,573 
FAIR VALUE OF FINANCIAL INSTRUMENTS (Debt) (Detail) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
$ 934,264 
$ 959,938 
Estimated Fair Value
938,900 
946,389 
Industrial revenue bond, due 2023 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
8,400 
8,400 
Estimated Fair Value
8,400 
8,400 
Revolving credit agreement, due 2017 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
0 
50,000 
Estimated Fair Value
0 
50,000 
5.51% Senior notes due 2017 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
150,000 
150,000 
Estimated Fair Value
164,094 
163,059 
Debt Instrument, Interest Rate, Stated Percentage
5.51% 
 
3.84% Senior notes due 2021 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
99,523 
98,632 
Estimated Fair Value
99,523 
98,632 
Debt Instrument, Interest Rate, Stated Percentage
3.84% 
 
3.70% Senior notes due 2023 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
225,000 
225,000 
Estimated Fair Value
220,111 
209,140 
Debt Instrument, Interest Rate, Stated Percentage
3.70% 
 
3.85% Senior notes due 2025 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
94,253 
88,555 
Estimated Fair Value
94,253 
88,555 
Debt Instrument, Interest Rate, Stated Percentage
3.85% 
 
4.24% Senior notes due 2026 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
186,572 
173,557 
Estimated Fair Value
186,572 
173,557 
Debt Instrument, Interest Rate, Stated Percentage
4.24% 
 
4.05% Senior notes due 2028 [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
69,741 
64,411 
Estimated Fair Value
69,741 
64,411 
Debt Instrument, Interest Rate, Stated Percentage
4.05% 
 
4.11% Senior Notes [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
100,000 
100,000 
Estimated Fair Value
95,431 
89,252 
Debt Instrument, Interest Rate, Stated Percentage
4.11% 
 
Other debt [Member]
 
 
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
 
 
Carrying Value
775 
1,383 
Estimated Fair Value
$ 775 
$ 1,383 
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Pension Plans Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 6,372 
$ 10,899 
$ 12,742 
$ 21,718 
Interest cost
7,552 
6,781 
15,096 
13,516 
Expected return on plan assets
(10,425)
(8,875)
(20,838)
(17,761)
Amortization of prior service cost
157 
254 
315 
554 
Amortization of unrecognized actuarial loss
1,483 
3,935 
2,966 
8,207 
Curtailments
0 
2,711 
0 
2,711 
Net postretirement benefit cost (income)
5,139 
15,705 
10,281 
28,945 
Other Postretirement Benefit Plan, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
70 
99 
141 
199 
Interest cost
219 
209 
438 
417 
Amortization of prior service cost
(164)
(157)
(328)
(314)
Amortization of unrecognized actuarial loss
(202)
(160)
(405)
(320)
Net postretirement benefit cost (income)
$ (77)
$ (9)
$ (154)
$ (18)
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Additional) (Detail) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Defined Benefit Plan Disclosure [Line Items]
 
Defined Contribution Plan, Employer Contribution, Percentage, Maximum
6.00% 
Defined Contribution Plan, Cost Recognized
$ 7.7 
Defined Contribution Plan, Employer Discretionary Contribution Amount
3.4 
Defined Contribution Plan, Estimated Future Employer Contributions in Current Fiscal Year
7.0 
Domestic Defined Benefit Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Contributions by employer
22.7 
Future employer contributions
40.0 
Foreign Defined Benefit [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Contributions by employer
2.8 
Future employer contributions
3.4 
Other Postretirement Benefit Plan, Defined Benefit [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Contributions by employer
0.7 
Future employer contributions
$ 1.7 
EARNINGS PER SHARE (Detail)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Earnings Per Share Reconciliation [Abstract]
 
 
 
 
Basic weighted-average shares outstanding (shares)
48,175 
46,786 
48,055 
46,700 
Dilutive effect of stock options and deferred stock compensation (shares)
1,064 
721 
1,105 
778 
Diluted weighted-average shares outstanding (shares)
49,239 
47,507 
49,160 
47,478 
EARNINGS PER SHARE (AntiDilutive) (Detail)
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Earnings Per Share [Abstract]
 
 
Antidilutive securities excluded from computation of earnings per share, amount
0 
618,000 
SEGMENT INFORMATION (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
segment
Jun. 30, 2013
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
Number of operating segments
 
 
3 
 
 
Net sales
$ 652,452 
$ 597,694 
$ 1,277,882 
$ 1,166,247 
 
Operating income (expense)
76,650 
60,579 
140,458 
100,901 
 
Identifiable assets
3,506,635 
 
3,506,635 
 
3,458,274 
Commercial Industrial [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
276,280 
241,960 
543,205 
462,416 
 
Operating income (expense)
37,741 
27,010 
70,224 
47,063 
 
Identifiable assets
1,383,435 
 
1,383,435 
 
1,310,521 
Defense [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
192,690 
193,632 
380,336 
381,807 
 
Operating income (expense)
24,454 
29,854 
47,723 
47,057 
 
Identifiable assets
1,212,268 
 
1,212,268 
 
1,292,462 
Energy [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
185,233 
164,074 
357,972 
325,617 
 
Operating income (expense)
20,720 
15,791 
36,361 
29,155 
 
Identifiable assets
816,769 
 
816,769 
 
798,028 
Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
(1,751)
(1,972)
(3,631)
(3,593)
 
Corporate and Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Operating income (expense)
(6,265)1
(12,076)1
(13,850)1
(22,374)1
 
Corporate and Other [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Identifiable assets
$ 94,163 
 
$ 94,163 
 
$ 57,263 
SEGMENT INFORMATION (Reconciliation) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting [Abstract]
 
 
 
 
Total operating income
$ 76,650 
$ 60,579 
$ 140,458 
$ 100,901 
Interest expense
(8,988)
(9,342)
(18,044)
(18,005)
Other income, net
64 
200 
118 
645 
Earnings from continuing operations before income taxes
$ 67,726 
$ 51,437 
$ 122,532 
$ 83,541 
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
 
Beginning balance
 
 
$ 25,259 
$ (55,508)
$ (55,508)
Other comprehensive income (loss) before reclassifications
 
 
7,891 1
 
 
Amounts reclassified from accumulated other comprehensive loss
 
 
1,629 1
 
 
Other comprehensive income, net of tax
18,651 
42,920 
9,520 
13,901 
80,767 
Ending balance
34,779 
 
34,779 
 
25,259 
Foreign Currency Translation Adjustments, Net [Member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
 
Beginning balance
 
 
59,103 
65,722 
65,722 
Other comprehensive income (loss) before reclassifications
 
 
7,820 1
 
 
Amounts reclassified from accumulated other comprehensive loss
 
 
0 1
 
 
Other comprehensive income, net of tax
 
 
7,820 
 
(6,619)
Ending balance
66,923 
 
66,923 
 
59,103 
Total Pension and Postretirment Adjustments, Net [Member]
 
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
 
 
 
 
 
Beginning balance
 
 
(33,844)
(121,230)
(121,230)
Other comprehensive income (loss) before reclassifications
 
 
71 1
 
 
Amounts reclassified from accumulated other comprehensive loss
 
 
1,629 1
 
 
Other comprehensive income, net of tax
 
 
1,700 
 
87,386 
Ending balance
$ (32,144)
 
$ (32,144)
 
$ (33,844)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclass) (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Earnings from continuing operations before income taxes
$ 67,726 
$ 51,437 
$ 122,532 
$ 83,541 
Income tax
(21,917)
(16,376)
(38,271)
(26,335)
Net earnings
36,391 
33,370 
71,555 
54,313 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Total Pension and Postretirment Adjustments, Net [Member]
 
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
Amortization of prior service costs
 
 
13 1
 
Amortization of actuarial losses
 
 
(2,561)1
 
Earnings from continuing operations before income taxes
 
 
(2,548)
 
Income tax
 
 
919 
 
Net earnings
 
 
$ (1,629)
 
CONTINGENCIES AND COMMITMENTS (Detail) (USD $)
6 Months Ended 0 Months Ended
Jun. 30, 2014
Jun. 30, 2014
Environmental Matters [Member]
Dec. 31, 2013
Environmental Matters [Member]
Jun. 30, 2014
Standby Letters Of Credit [Member]
Dec. 31, 2013
Standby Letters Of Credit [Member]
Jun. 30, 2014
FinancialStandbyLetterOfCreditMember
Dec. 31, 2013
FinancialStandbyLetterOfCreditMember
Jun. 30, 2014
Scenario, Forecast [Member]
Oct. 10, 2013
Failure to Meet Contractual Obligations [Member]
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
Accrual for environmental loss contingencies
 
$ 15,900,000 
$ 16,300,000 
 
 
 
 
 
 
Letters of credit, outstanding
 
 
 
36,600,000 
47,200,000 
25,900,000 
23,200,000 
 
 
Surety Bond Outstanding
52,900,000 
 
 
 
 
 
 
 
 
Damages sought
 
 
 
 
 
 
 
1,000,000,000 
25,000,000 
Range of possible loss, minimum
0 
 
 
 
 
 
 
 
 
Range of possible loss, maximum
$ 35,000,000