Slide 1: 2Q 2016 Earnings Conference Call
2Q 2016 Earnings Conference Call July 28, 2016 NYSE: CW 1 | July 28, 2016 | © 2016 Curtiss-Wright
Slide 2: Safe Harbor Statement
Safe Harbor Statement Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will remain posted on this website from one to twelve months following the initial presentation, but content will not be updated to reflect n
Slide 3: 2016 Second Quarter Performance and Business Outlook
2016 Second Quarter Performance and Business Outlook 2Q Highlights Diluted EPS of $0.88, ahead of expectations, reflecting: – Strong performance in the Power segment – Benefits of operational improvement and cost control initiatives Operating Income up 4%; Operating Margin up 80 bps to 12.8% N
Slide 4: Second Quarter 2016 End Market Sales
Second Quarter 2016 End Market Sales 2Q’16 Results: 2Q’16 % of Total Defense Markets +1% Change Sales vs. PY Commercial Markets (4%) Aero Defense 1% 14% Key Drivers: Ground Defense (18%) 4% Ground Defense: Lower international sales of Naval Defense 4% 20% turret drive stabilization systems Tot
Slide 5: Second Quarter 2016 Operating Income / Margin Drivers
Second Quarter 2016 Operating Income / Margin Drivers ($ in millions) Change 2Q’16 2Q’15 vs. 2015 Commercial / Industrial $39.0 $45.2 (14%) Margin 13.4% 14.9% (150 bps) Defense 18.6 24.4 (24%) Margin 16.3% 20.4% (410 bps) Power 16.1 1.5 1,008% Margin 12.5% 1.2% 1,130 bps Total Segments $73.7 $71.1 4
Slide 6: 2016E Financial Outlook (Guidance as of July 27, 2016) Updated
2016E Financial Outlook* (Guidance as of July 27, 2016) Updated (in blue) FY2016E FY2016E ($ in millions, except EPS) Growth % vs 2015 (Prior) (Current) Commercial / Industrial $1,145 - 1,170 $1,130 - 1,155 (3 - 5%) Defense $490 - 500 $475 - 485 0 - 2% Power $535 - 550 $515 - 530 (2) - 1% Total Sale
Slide 7: 2016E Financial Outlook (Guidance as of July 27, 2016) Updated
2016E Financial Outlook* (Guidance as of July 27, 2016) Updated (in blue) ($ in millions, except EPS) FY2016E FY2016E Growth % (Prior) (Current) vs 2015 Pension/401K Expense ~$22 ~$20 Interest Expense $38 - 39 $40 - 41 Effective Tax Rate 31.0% No change Diluted EPS $4.00 - 4.15 No change 7 - 11% Dil
Slide 8: 2016E Financial Outlook (Guidance as of July 27, 2016) Updated
2016E Financial Outlook (Guidance as of July 27, 2016) Updated (in blue) ($ in millions) FY2016E FY2016E Growth % (Prior) (Current) vs 2015 Free Cash Flow (1) $290 - 310 $300 - 320 10 - 18% Free Cash Flow Conversion(2) 158 - 163% 166 - 170% Depreciation & Amortization $100 - 110 No change Capital Ex
Slide 9: AP1000 Program Highlights
AP1000 Program Highlights Background Curtiss-Wright providing reactor coolant pump (RCP) technology on Westinghouse AP1000 nuclear power plants Began shipping RCPs to China in 4Q’15 (2007 contract) Began shipping U.S. RCPs in 1Q’16 (2008 contract) Recent Highlights China: 8 RCPs shipped and
Slide 10: Strategic Focus on Margin Improvement
Strategic Focus on Margin Improvement Leveraging the benefits of ONE Curtiss-Wright Ongoing operational and productivity improvement initiatives Reclassifying & simplifying categories: Operational Excellence Global Footprint Corporate Efficiency Supply Chain Consolidations Shared Services Lean
Slide 11: Positioned to Deliver Strong 2016 Results
Positioned to Deliver Strong 2016 Results Remain on track for continued operating margin expansion, up 90 - 110 bps to 14.2 - 14.4%* – Mitigating impact of reduced sales outlook – Benefit of operational improvement and cost control initiatives – Goal to remain in Top Quartile vs peers Solid grow
Slide 12: Appendix
Appendix 12 | July 28, 2016 | © 2016 Curtiss-Wright
Slide 13: Balanced Capital Allocation
Balanced Capital Allocation Committed to steady return of capital to shareholders – At least $100M in expected share repurchases in 2016 Return of Capital – $300M in 2015 share repurchases – Steady dividend payout Growth through strategic Operational acquisitions Acquisitions Requirements Inte
Slide 14: 2016E End Market Sales Outlook (Guidance as of July 27, 2016) Updated
2016E End Market Sales Outlook*(Guidance as of July 27, 2016) Updated (in blue) FY2016E FY2016E % of Total (Prior) (Current) Sales Aero Defense 1 - 3% Flat 14% Ground Defense 4 - 6% (2 - 4%) 4% Naval Defense 0 - 2% No change 19% Total Defense Up 2% to 4% Flat 37% Including Other Defense Commercial A
Slide 15: 2016 End Market Sales Waterfall (Guidance as of July 27, 2016) Updated
2016 End Market Sales Waterfall (Guidance as of July 27, 2016) Updated ($ Millions) Total CW End Markets $2,120 - $2,170 Defense Markets Commercial Markets 37% 63% Naval Commercial Aerospace Power Generation General Industrial 19% 18% 20% 25% Aerospace Aircraft Equipment Aftermarket Nuclear Industri
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended June 30, 2016 vs 2015 Commercial/Industrial Defense Power Total Curtiss-Wright Operating Operating Operating Operating Sales Sales Sales Sales income income income income Organic (4%) (16%) (4%) (30%) 6% 1011% (2%) 0% Acquisitions 0% 0% 0% 0% 0% 0% 0% 0% Fo