Slide 1: 4Q 2013 Earnings Conference Call
February 20, 2014 4Q 2013 Earnings Conference Call COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
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 web site from one to twelve months following the initial presentation, but content will not be updated to reflect
Slide 3: One Curtiss-Wright
“One Curtiss-Wright” Driven by a new integrated, market-facing structure Focused on: Operating margin expansion Improved working capital management to deliver higher free cash flow A balanced capital allocation strategy Targeting top-quartile performance Dedicated to improving shareholde
Slide 4: Overview of Fourth Quarter 2013 Results
Overview of Fourth Quarter 2013 Results Sales increased 19%, with double-digit gains across all three segments Commercial markets up 23%; Defense markets up 9% Operating income increased 21% Operating margin up 20 bps to 10.7% (organic 11.3%) Up 110 bps excluding acquisition margin dilutio
Slide 5: Fourth Quarter 2013 Operating Income Drivers
Fourth Quarter 2013 Operating Income Drivers 4Q’12 Adjusted Excl. One-Time % Change vs. 4Q’13 Reported 4Q’12 Reported Items* Adj. 4Q’12 Flow Control $39.8 $40.4 $30.0 33% Controls $36.4 $27.3 $27.3 34% Surface $12.4 $3.5 $9.5 30% Technologies Corp & Other ($13.7) ($9.2) ($9.2) (49%) Total $74.9M $62
Slide 6: 4Q 2013 End Markets Summary Commercial
4Q 2013 End Markets Summary YTD 2013 Sales: Commercial 70% Commercial 30% Defense Aero Key Positives Oil & Gas Defense 17% 12% Ground Ongoing ramp up in commercial aircraft Defense production rates driving solid organic 3% growth Strong performance in Oil & Gas Naval Led by acquisitions and co
Slide 7: 4Q 2013 End Markets Summary Defense
4Q 2013 End Markets Summary YTD 2013 Sales: Defense 70% Commercial 30% Defense Aero Defense Key Positives 12% Oil & Gas Ground Strong naval defense revenues led by 17% Defense 3% Virginia-class submarines and ramp up on CVN-79 aircraft carrier Higher revenues on Air Force RASP Naval (radar) prog
Slide 8: 2014E Financial Outlook
2014E Financial Outlook (as of February 19, 2014) FY2014E FY2014E FY2013A (Prior) (Current) Total Sales $2,511M $2,650 - 2,700M No change Commercial / Industrial - $1,040 - 1,060M - Defense - $890 - 910M - Energy - $720 - 730M - Total Operating Income $234M $267 - 278M No change CW Margin 9.3% 10.1%
Slide 9: 2014E Financial Outlook
2014E Financial Outlook (as of February 19, 2014) FY2014E FY2014E FY2013A (Prior) (Current) Pension/Post-Retirement Expense $33M $36 - 37M - Interest Expense $37M $39 - 40M - Diluted EPS $2.88 $3.20 - 3.35 $3.30 - 3.40 Diluted Shares Outstanding 47.9M 48.4M - Effective Tax Rate 30.3% 32.0% 30.0 - 31
Slide 10: 2014E Market Outlook
2014E Market Outlook (as of February 19, 2014) FY2014E FY2014E % of Total (Prior) (Current) Sales Aero Defense 8 - 12% - 11% Ground Defense (7 - 11%) - 3% Naval Defense (2) - 2% - 14% Total Defense 1 - 5% No change 29% Including Other Defense Commercial Aero 6 - 10% - 16% Oil & Gas 11 - 15% - 19% Po
Slide 11: Outlook for 2014 and Closing Comments
Outlook for 2014 and Closing Comments Expect solid sales with strong, double-digit growth in operating income and diluted EPS Solid growth anticipated in all commercial markets outweighs mixed performance in defense Significant operating margin expansion Driven by operational improvement and
Slide 12: Appendix
Appendix 12 Fourth Quarter 2013
Slide 13: Non-GAAP Reconciliation
Non-GAAP Reconciliation CURTIS S -WRIGHT CORPORATION and S UBS IDIARIES NON-GAAP FINANCIAL DATA (UNAUDITED) ($ in millions) Three Months Ended December 31, Flow Control Controls S urface Technologies Corporate & Other Total Curtiss - Wright 2013 2012 Chg 2013 2012 Chg 2013 2012 Chg 2013 2012 Chg 201
Slide 14: 4Q 2013 Segment Review – Flow Control
4Q 2013 Segment Review – Flow Control Naval Defense 27% Oil & Gas 33% Gen Industrial 6% Comm Aero 2% Power Gen 32% Segment Sales: $357 M Note: Percentages in chart relate to Fourth Quarter 2013 sales. 14 Fourth Quarter 2013
Slide 15: 4Q 2013 Segment Review – Controls
4Q 2013 Segment Review – Controls Aero Defense 30% Comm Aero 29% Ground Defense 9% Naval Defense 5% Other Defense & Gen Industrial Gov't. 26% 1% Segment Sales: $264 M Note: Percentages in chart relate to Fourth Quarter 2013 sales. 15 Fourth Quarter 2013
Slide 16: 4Q 2013 Segment Review – Surface Technologies
4Q 2013 Segment Review – Surface Technologies Comm Aero 41% Gen Industrial 33% Power Gen 9% Other Defense & Aero Defense Oil & Gas Gov't. 9% 7% 1% Segment Sales: $79 M Note: Percentages in chart relate to Fourth Quarter 2013 sales. 16 Fourth Quarter 2013