Curtiss-wright reports fourth quarter and full-year 2021 financial results; full-year 2022 guidance reflects higher sales, operating margin and eps
Davidson, n.c.--(business wire)--curtiss-wright corporation (nyse: cw) reports financial results for the fourth quarter and full-year ended december 31, 2021. fourth quarter 2021 highlights: reported sales of $667 million, diluted earnings per share (eps) of $1.94, and free cash flow (fcf) of $219 million; adjusted sales of $655 million, up 2%; adjusted diluted eps of $2.40, up 6%; new orders of $676 million, up 19%; adjusted fcf of $219 million, with 230% fcf conversion; and record share repurchases of approximately $258 million. full-year 2021 highlights: reported sales of $2.5 billion, operating income of $383 million, operating margin of 15.3%, diluted eps of $6.58, and fcf of $347 million; adjusted sales of $2.5 billion, up 7%; adjusted operating income of $420 million, up 12%; record adjusted operating margin of 17.0%, up 70 basis points; adjusted diluted eps of $7.34, up 11%; new orders of $2.5 billion, up 11%; backlog up 3%; adjusted fcf of $347 million, with 116% fcf conversion; and record annual share repurchases of $350 million. “curtiss-wright delivered strong fourth quarter results with better-than-expected profitability, strong free cash flow and tremendous order growth,” said lynn m. bamford, president and ceo of curtiss-wright corporation. “for the full year, we grew sales by 7% to nearly $2.5 billion, in line with our expectations, as we leveraged the strength and resilience of our combined portfolio to minimize the impact of the challenging supply chain environment. i’m proud of the team’s focus and continued strong execution of our operational excellence initiatives, which enabled us to generate 70 basis points in full-year operating margin expansion and meet our 17% operating margin objective one full year ahead of schedule.” “we continue to utilize our strong and healthy balance sheet to implement a disciplined capital deployment strategy. throughout the past year, we delivered on our commitment to drive returns to our shareholders by executing record annual share repurchases of $350 million. we also recently announced our pending acquisition of safran’s aerospace arresting systems business for $240 million, which will increase the breadth of our global defense portfolio and is expected to yield significant opportunities for revenue growth” “over the past few weeks, we resolved two significant legacy matters. first, we have reached an agreement with westinghouse to settle all outstanding legal matters covering both the u.s. and china ap1000 reactor coolant pump (rcp) contracts dating back to 2007. as a result, we have secured westinghouse’s commitment to curtiss-wright’s rcp technology in future ap1000 power plants globally, including their next multi-unit project in eastern europe. we now have a clear path moving forward and the potential to generate new rcp orders within the next three to five years. second, we recently completed the divestiture of the german valves business which had been classified as held for sale since the fourth quarter of 2020. we are pleased to move past these matters with a well-defined focus on advancing our strategic priorities to generate long-term profitable growth.” “looking to 2022, we are projecting total sales growth of 3% to 5% driven by growth in all of our a&d and commercial markets, continued operating margin expansion, and double-digit adjusted diluted eps growth of 10% to 12%. we remain on track to achieve our 3-year financial targets for 2023 that we communicated at last year’s investor day and successfully execute on our pivot to growth strategy to drive long-term shareholder value.” fourth quarter 2021 operating results (in millions) q4-2021 q4-2020 change reported sales $ 667 $ 668 0% operating income $ 105 $ 76 38% operating margin 15.8% 11.4% 440 bps adjusted (1) sales $ 655 $ 641 2% operating income $ 129 $ 126 2% operating margin 19.7% 19.7% - (1) reconciliations of reported to adjusted operating results are available in the appendix. adjusted sales of $655 million, up $14 million, or 2%; total aerospace & defense (a&d) market sales were flat, while total commercial market sales increased 6%; in our a&d markets, strong double-digit growth in commercial aerospace and the contribution from the pacstar acquisition in ground defense were offset by reductions in the aerospace defense and naval defense markets due to the timing of sales and ongoing supply chain headwinds; in our commercial markets, we experienced continued strong demand in the general industrial market, as well as higher sales within the power & process markets, despite the wind down on the china direct ap1000 program; adjusted operating income of $129 million improved 2%, while adjusted operating margin remained flat at 19.7%. higher operating income was driven by favorable overhead absorption on higher revenues in our aerospace & industrial and defense electronics segments, as well as the benefits of our ongoing company-wide operational excellence initiatives. these improvements were partially offset by lower revenues and unfavorable mix in the naval & power segment; and non-segment expenses of $12 million, up $2 million, primarily due to higher environmental costs. fourth quarter 2021 segment performance aerospace & industrial (in millions) q4-2021 q4-2020 change reported sales $ 210 $ 213 (1%) operating income $ 40 $ 34 17% operating margin 19.0% 16.0% 300 bps adjusted (1) sales $ 208 $ 192 8% operating income $ 40 $ 34 20% operating margin 19.5% 17.5% 200 bps (1) reconciliations of reported to adjusted operating results are available in the appendix. adjusted sales of $208 million, up approximately $15 million, or 8%; higher general industrial market revenue was principally driven by the continued strong rebound in demand for industrial vehicle products for on- and off-highway platforms; higher commercial aerospace market revenue reflected higher sales of sensors products and surface treatment services on narrowbody platforms, partially offset by lower actuation sales on widebody platforms; aerospace defense market revenue increased primarily due to higher sales of actuation products and surface treatment services on the f-35 program; and adjusted operating income of $40 million, up 20% from the prior year, while adjusted operating margin increased 200 basis points to 19.5%, reflecting strong absorption on higher sales and the benefits of our ongoing operational excellence initiatives. defense electronics (in millions) q4-2021 q4-2020 change reported sales $ 199 $ 181 10% operating income $ 52 $ 35 50% operating margin 26.3% 19.2% 710 bps adjusted (1) sales $ 200 $ 182 10% operating income $ 53 $ 45 17% operating margin 26.5% 24.9% 160 bps (1) reconciliations of reported to adjusted operating results are available in the appendix. adjusted sales of $200 million, up approximately $17 million, or 10%; lower aerospace defense market revenues reflected the timing of sales of our embedded computing equipment on various programs, as certain revenues shifted into 2022 due to ongoing supply chain headwinds. this decrease was partially offset by higher production revenues on the f-35 program; higher ground defense market revenue was principally driven by the contribution from the pacstar acquisition for tactical battlefield communications equipment; higher commercial aerospace market revenue reflected increased sales of avionics and electronic systems on various domestic and international platforms; and adjusted operating income of $53 million, up 17% from the prior year, while adjusted operating margin increased 160 basis points to 26.5%, as solid absorption on higher sales and favorable mix in defense electronics more than offset unfavorable foreign currency translation. naval & power (in millions) q4-2021 q4-2020 change reported sales $ 258 $ 274 (6%) operating income $ 25 $ 18 43% operating margin 9.7% 6.4% 330 bps adjusted (1) sales $ 248 $ 267 (7%) operating income $ 48 $ 57 (16%) operating margin 19.3% 21.4% (210 bps) (1) reconciliations of reported to adjusted operating results are available in the appendix. adjusted sales of $248 million, down $19 million, or 7%; naval defense market revenue declines primarily reflected lower revenues on the virginia-class submarine program, partially offset by higher revenues on the cvn-81 aircraft carrier program; higher power & process market sales reflected solid industrial valve demand in the oil and gas market and higher domestic nuclear aftermarket revenues, partially offset by the timing of production on the china direct ap1000 program; and adjusted operating income of $48 million, down 16% from the prior year, while adjusted operating margin decreased 210 basis points to 19.3%, driven by unfavorable absorption on lower revenues and unfavorable mix in the power & process market. free cash flow (in millions) q4-2021 q4-2020 change net cash provided by operating activities 232 $ 257 (10%) capital expenditures (13) (11) (19%) reported free cash flow 219 $ 246 (11%) adjusted free cash flow (1) 219 $ 256 (15%) (1) a reconciliation of reported to adjusted free cash flow is available in the appendix. reported free cash flow of $219 million decreased approximately $28 million, or 11%, primarily due to higher working capital and higher taxes; capital expenditures increased $2 million compared with the prior year, primarily due to higher capital investments within the naval & power segment; and adjusted free cash flow of $219 million decreased $37 million, or approximately 15%, compared with record free cash flow achieved in the prior year period. new orders and backlog new orders of $676 million increased 19% and generated an overall book-to-bill that exceeded 1.0x, principally driven by solid demand within our a&d markets for our commercial aerospace and naval defense products; and backlog of $2.2 billion, up 3% from december 31, 2020, reflects higher demand in both our a&d and commercial markets. share repurchase and dividends during the fourth quarter, the company repurchased 1.96 million shares of its common stock for approximately $258 million; during full-year 2021, the company repurchased 2.70 million shares for a record $350 million; and the company also declared a quarterly dividend of $0.18 a share, unchanged from the previous quarter. other items – business held for sale in january 2022, the company completed the sale of its german valves business. other items – westinghouse legal settlement in february 2022, the company and westinghouse reached an agreement to settle all open claims and counterclaims under the ap1000 u.s. and china contracts. based on the terms of the settlement, the company recorded full-year charges of approximately $13 million related to this matter for the year ended december 31, 2021; and the company’s 2021 non-gaap results have been adjusted for this legal matter. full-year 2022 guidance the company’s full-year 2022 adjusted financial guidance(1) is as follows: (in millions, except eps) 2022 adjusted non-gaap guidance % chg vs 2021 total sales $2,530 - $2,580 up 3% - 5% operating income $432 - $446 up 3% - 6% operating margin 17.1% - 17.3% up 10 - 30 bps diluted eps $8.05 - $8.25 up 10% - 12% free cash flow(2) $345 - $365 up 0% - 5% (1) reconciliations of reported to adjusted 2021 operating results and 2022 financial guidance are available in the appendix. (2) 2022 adjusted free cash flow includes $50 - $60 million in capital expenditures compared with $41 million in 2021. a more detailed breakdown of the company’s 2022 financial guidance by segment and by market, as well as all reconciliations of reported gaap amounts to adjusted non-gaap amounts can be found in the accompanying schedules. historical financial results are available in the investor relations section of curtiss-wright’s website. conference call & webcast information the company will host a conference call to discuss fourth quarter and full-year 2021 financial results and expectations for 2022 guidance at 10:00 a.m. et on thursday, february 24, 2022. a live webcast of the call and the accompanying financial presentation, as well as a replay of the call, will be made available on the internet by visiting the investor relations section of the company’s website at www.curtisswright.com. (tables to follow) curtiss-wright corporation and subsidiaries consolidated statements of earnings (unaudited) ($'s in thousands, except per share data) three months ended year ended december 31, december 31, 2021 2020 2021 2020 product sales $ 556,911 $ 583,314 $ 2,109,617 $ 2,041,086 service sales 109,847 85,130 396,314 350,250 total net sales 666,758 668,444 2,505,931 2,391,336 cost of product sales 340,432 373,676 1,330,191 1,319,562 cost of service sales 64,454 52,967 242,384 230,547 total cost of sales 404,886 426,643 1,572,575 1,550,109 gross profit 261,872 241,801 933,356 841,227 research and development expenses 21,814 20,653 88,489 74,816 selling expenses 27,729 27,887 116,956 109,537 general and administrative expenses 96,532 72,773 326,140 303,288 impairment of assets held for sale 10,432 33,043 19,088 33,043 restructuring expenses — 10,965 — 31,695 operating income 105,365 76,480 382,683 288,848 interest expense 10,146 10,486 40,240 35,545 other income, net 3,157 2,904 12,067 9,748 earnings before income taxes 98,376 68,898 354,510 263,051 provision for income taxes (21,797 ) (14,905 ) (87,351 ) (61,659 ) net earnings $ 76,579 $ 53,993 $ 267,159 $ 201,392 net earnings per share: basic earnings per share $ 1.95 $ 1.31 $ 6.61 $ 4.83 diluted earnings per share $ 1.94 $ 1.30 $ 6.58 $ 4.80 dividends per share $ 0.18 $ 0.17 $ 0.71 $ 0.68 weighted average shares outstanding: basic 39,309 41,209 40,417 41,738 diluted 39,524 41,459 40,602 41,999 curtiss-wright corporation and subsidiaries consolidated balance sheets (unaudited) ($'s in thousands, except par value) december 31, december 31, 2021 2020 assets current assets: cash and cash equivalents $ 171,004 $ 198,248 receivables, net 647,148 588,718 inventories, net 411,567 428,879 assets held for sale 10,988 27,584 other current assets 67,101 57,395 total current assets 1,307,808 1,300,824 property, plant, and equipment, net 360,031 378,200 goodwill 1,463,026 1,455,137 other intangible assets, net 538,077 609,630 operating lease right-of-use assets, net 143,613 150,898 prepaid pension asset 256,422 92,531 other assets 34,568 34,114 total assets $ 4,103,545 $ 4,021,334 liabilities current liabilities: current portion of long-term and short term debt $ — $ 100,000 accounts payable 211,640 201,237 accrued expenses 144,466 140,200 income taxes payable 3,235 6,633 deferred revenue 260,157 253,411 liabilities held for sale 12,655 10,141 other current liabilities 102,714 98,755 total current liabilities 734,867 810,377 long-term debt, net 1,050,610 958,292 deferred tax liabilities 147,349 115,007 accrued pension and other postretirement benefit costs 91,329 98,345 long-term operating lease liability 127,152 133,069 long-term portion of environmental reserves 13,656 15,422 other liabilities 112,092 103,248 total liabilities 2,277,055 2,233,760 stockholders' equity common stock, $1 par value $ 49,187 $ 49,187 additional paid in capital 127,104 122,535 retained earnings 2,908,827 2,670,328 accumulated other comprehensive loss (190,465 ) (310,856 ) less: cost of treasury stock (1,068,163 ) (743,620 ) total stockholders' equity 1,826,490 1,787,574 total liabilities and stockholders' equity $ 4,103,545 $ 4,021,334 use and definitions of non-gaap financial information (unaudited) the corporation supplements its financial information determined under u.s. generally accepted accounting principles (gaap) with certain non-gaap financial information. curtiss-wright believes that these adjusted (non-gaap) measures provide investors with improved transparency in order to better measure curtiss-wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. these non-gaap measures should not be considered in isolation or as a substitute for the related gaap measures, and other companies may define such measures differently. curtiss-wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. reconciliations of “as reported” gaap amounts to “adjusted” non-gaap amounts are furnished within this release. the following definitions are provided: adjusted sales, operating income, operating margin, net earnings and diluted eps these adjusted financials are defined as reported sales, operating income, operating margin, net earnings and diluted earnings per share under gaap excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) one-time transition and it security costs associated with the relocation of a business in the prior year period; (iii) the non-cash impairment of capitalized development costs in the prior year period; (iv) significant restructuring costs in 2020 associated with its operations; (v) the sale or divestiture of a business or product line; (vi) pension settlement charges; and (vii) significant legal settlements and impairment costs. curtiss-wright corporation and subsidiaries reconciliation of as reported to adjusted (unaudited) ($'s in thousands) three months ended three months ended december 31, 2021 december 31, 2020 % change as reported adjustments adjusted as reported adjustments adjusted reported adjusted sales: aerospace & industrial (1) $ 209,994 $ (2,418 ) $ 207,576 $ 212,766 $ (20,553 ) $ 192,213 (1)% 8% defense electronics (2) 199,259 360 199,619 181,239 935 182,174 10% 10% naval & power (3) 257,505 (9,401 ) 248,104 274,439 (7,360 ) 267,079 (6)% (7)% total sales $ 666,758 $ (11,459 ) $ 655,299 $ 668,444 $ (26,978 ) $ 641,466 —% 2% operating income (expense): aerospace & industrial (1) $ 39,943 $ 493 $ 40,436 $ 34,079 $ (362 ) $ 33,717 17% 20% defense electronics (2) 52,433 442 52,875 34,846 10,492 45,338 50% 17% naval & power (3) 25,025 22,802 47,827 17,528 39,513 57,041 43% (16)% total segments $ 117,401 $ 23,737 $ 141,138 $ 86,453 $ 49,643 $ 136,096 36% 4% corporate and other (12,036 ) (22 ) (12,058 ) (9,973 ) 65 (9,908 ) (21)% (22)% total operating income $ 105,365 $ 23,715 $ 129,080 $ 76,480 $ 49,708 $ 126,188 38% 2% operating margins: as reported adjusted as reported adjusted reported adjusted aerospace & industrial 19.0 % 19.5 % 16.0 % 17.5 % 300 bps 200 bps defense electronics 26.3 % 26.5 % 19.2 % 24.9 % 710 bps 160 bps naval & power 9.7 % 19.3 % 6.4 % 21.4 % 330 bps (210 bps) total curtiss-wright 15.8 % 19.7 % 11.4 % 19.7 % 440 bps — bps segment margins 17.6 % 21.5 % 12.9 % 21.2 % 470 bps 30 bps (1) excludes our build-to-print actuation product line supporting the boeing 737 max program in both periods, and restructuring costs incurred in the prior period. (2) excludes first year purchase accounting adjustments in both periods and restructuring costs incurred in the prior period. (3) excludes the results of operations and related impairments from our german valves business in both periods, one-time legal settlement costs in the current period, first year purchase accounting adjustments in the prior period, and restructuring costs in the prior period. curtiss-wright corporation and subsidiaries reconciliation of as reported to adjusted (unaudited) ($'s in thousands) twelve months ended twelve months ended december 31, 2021 december 31, 2020 % change as reported adjustments adjusted as reported adjustments adjusted reported adjusted sales: aerospace & industrial (1) $ 786,334 $ (11,182 ) $ 775,152 $ 805,673 $ (67,482 ) $ 738,191 (2)% 5% defense electronics (2) 724,326 3,600 727,926 608,757 1,884 610,641 19% 19% naval & power (3) 995,271 (29,869 ) 965,402 976,906 (25,963 ) 950,943 2% 2% total sales $ 2,505,931 $ (37,451 ) $ 2,468,480 $ 2,391,336 $ (91,562 ) $ 2,299,774 5% 7% operating income (expense): aerospace & industrial (1) $ 121,817 $ (1,586 ) $ 120,231 $ 99,714 $ (1,879 ) $ 97,835 22% 23% defense electronics (2) 159,089 5,134 164,223 118,748 25,625 144,373 34% 14% naval & power (3) 141,660 34,139 175,799 108,151 62,715 170,866 31% 3% total segments $ 422,566 $ 37,687 $ 460,253 $ 326,613 $ 86,461 $ 413,074 29% 11% corporate and other (39,883 ) 53 (39,830 ) (37,765 ) 186 (37,579 ) (6)% (6)% total operating income $ 382,683 $ 37,740 $ 420,423 $ 288,848 $ 86,647 $ 375,495 32% 12% operating margins: as reported adjusted as reported adjusted reported adjusted aerospace & industrial 15.5 % 15.5 % 12.4 % 13.3 % 310 bps 220 bps defense electronics 22.0 % 22.6 % 19.5 % 23.6 % 250 bps (100 bps) naval & power 14.2 % 18.2 % 11.1 % 18.0 % 310 bps 20 bps total curtiss-wright 15.3 % 17.0 % 12.1 % 16.3 % 320 bps 70 bps segment margins 16.9 % 18.6 % 13.7 % 18.0 % 320 bps 60 bps (1) excludes our build-to-print actuation product line supporting the boeing 737 max program in both periods and restructuring costs in the prior period. (2) excludes first year purchase accounting adjustments in both periods, a non-cash impairment of capitalized development costs related to a commercial aerospace program in the prior period, and restructuring costs in the prior period. (3) excludes the results of operations and related impairments from our german valves business in both periods, one-time legal settlement costs in the current period, one-time costs in the prior period associated with the relocation of our drg business, first year purchase accounting adjustments in the prior period, and restructuring costs in the prior period. curtiss-wright corporation and subsidiaries reconciliation of as reported sales to adjusted sales by end market (unaudited) ($'s in thousands) three months ended three months ended december 31, 2021 december 31, 2020 2021 vs. 2020 reported sales adjustments adjusted sales reported sales adjustments adjusted sales change in reported sales change in adjusted sales aerospace & defense markets: aerospace defense (1) $ 124,815 $ — $ 124,815 $ 130,570 $ 215 $ 130,785 (4%) (5%) ground defense (1) 61,199 360 61,559 44,243 720 44,963 38% 37% naval defense 179,259 — 179,259 195,995 — 195,995 (9%) (9%) commercial aerospace (2) 71,437 (2,418 ) 69,019 82,810 (20,553 ) 62,257 (14%) 11% total aerospace & defense $ 436,710 $ (2,058 ) $ 434,652 $ 453,618 $ (19,618 ) $ 434,000 (4%) 0% commercial markets: power & process (3) 129,916 (9,401 ) 120,515 124,210 (7,360 ) 116,850 5% 3% general industrial 100,132 — 100,132 90,616 — 90,616 11% 11% total commercial 230,048 (9,401 ) 220,647 214,826 (7,360 ) 207,466 7% 6% total curtiss-wright $ 666,758 $ (11,459 ) $ 655,299 $ 668,444 $ (26,978 ) $ 641,466 0% 2% twelve months ended twelve months ended december 31, 2021 december 31, 2020 2021 vs. 2020 reported sales adjustments adjusted sales reported sales adjustments adjusted sales change in reported sales change in adjusted sales aerospace & defense markets: aerospace defense (1) $ 452,661 $ — $ 452,661 $ 463,690 $ 1,164 $ 464,854 (2%) (3%) ground defense (1) 220,290 3,600 223,890 107,448 720 108,168 105% 107% naval defense 710,688 — 710,688 692,152 — 692,152 3% 3% commercial aerospace (2) 267,722 (11,182 ) 256,540 325,518 (67,482 ) 258,036 (18%) (1%) total aerospace & defense $ 1,651,361 $ (7,582 ) $ 1,643,779 $ 1,588,808 $ (65,598 ) $ 1,523,210 4% 8% commercial markets: power & process (3) 473,489 (29,869 ) 443,620 474,842 (25,964 ) 448,878 0% (1%) general industrial 381,081 — 381,081 327,686 — 327,686 16% 16% total commercial $ 854,570 $ (29,869 ) $ 824,701 $ 802,528 $ (25,964 ) $ 776,564 6% 6% total curtiss-wright $ 2,505,931 $ (37,451 ) $ 2,468,480 $ 2,391,336 $ (91,562 ) $ 2,299,774 5% 7% (1) excludes first year purchase accounting adjustments. (2) excludes our build-to-print actuation product line supporting the boeing 737 max program which we exited in the fourth quarter of 2020. (3) excludes our german valves business which was classified as held for sale in the fourth quarter of 2020. curtiss-wright corporation and subsidiaries reconciliation of as reported to adjusted (unaudited) three months ended year ended december 31, december 31, 2021 2020 2021 2020 diluted earnings per share - as reported $ 1.94 $ 1.30 $ 6.58 $ 4.80 first year purchase accounting adjustments 0.02 0.21 0.11 0.69 exit of build-to-print actuation product line 0.01 (0.04 ) (0.02 ) (0.17 ) german valves business held for sale 0.11 0.59 0.30 0.61 charges related to legal settlement 0.32 — 0.31 restructuring costs — 0.21 — 0.66 pension settlement charges — — 0.06 — diluted earnings per share - adjusted (1) $ 2.40 $ 2.27 $ 7.34 $ 6.59 (1) all adjustments are presented net of income taxes. organic sales and organic operating income the corporation discloses organic sales and organic operating income because the corporation believes it provides investors with insight as to the company’s ongoing business performance. organic sales and organic operating income are defined as sales and operating income excluding the impact of restructuring costs, impairment of assets held for sale, foreign currency fluctuations and contributions from acquisitions made during the last twelve months. three months ended december 31, 2021 vs. 2020 aerospace & industrial defense electronics naval & power total curtiss-wright sales operating income sales operating income sales operating income sales operating income as reported (1)% 17% 10% 50% (6)% 43% 0% 38% less: acquisitions 0% 0% (6)% (3)% 0% 0% (2)% (1)% impairment of assets held for sale 0% 0% 0% 0% 0% (129)% 0% (30)% restructuring 0% (16)% 0% (1)% 0% (40)% 0% (16)% foreign currency 0% 2% 0% 3% 0% (2)% 0% 1% organic (1)% 3% 4% 49% (6)% (128)% (2)% (8)% year ended december 31, 2021 vs. 2020 aerospace & industrial defense electronics naval & power total curtiss-wright sales operating income sales operating income sales operating income sales operating income as reported (2)% 22% 19% 34% 2% 31% 5% 32% less: acquisitions 0% 0% (19)% (12)% 0% 0% (5)% (5)% impairment of assets held for sale 0% 0% 0% 0% 0% (13)% 0% (5)% restructuring 0% (14)% 0% (3)% 0% (22)% 0% (14)% foreign currency (2)% 1% 0% 5% (1)% 1% (1)% 3% organic (4)% 9% 0% 24% 1% (3)% (1)% 11% free cash flow and free cash flow conversion the corporation discloses free cash flow because it measures cash flow available for investing and financing activities. free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. free cash flow is defined as net cash provided by operating activities less capital expenditures. adjusted free cash flow for 2020 excludes: (i) a capital investment in the naval & power segment related to the new, state-of-the-art naval facility principally for drg; (ii) a voluntary contribution to the company’s corporate defined benefit pension plan made in the first quarter of 2020; and (iii) the cash impact from significant restructuring in 2020. the corporation discloses adjusted free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as adjusted free cash flow divided by adjusted net earnings. curtiss-wright corporation and subsidiaries non-gaap financial data (unaudited) ($'s in thousands) three months ended year ended december 31, december 31, 2021 2020 2021 2020 net cash provided by operating activities $ 231,907 $ 257,396 $ 387,668 $ 261,180 capital expenditures (13,250 ) (11,158 ) (41,108 ) (47,499 ) free cash flow $ 218,657 $ 246,238 $ 346,560 $ 213,681 voluntary pension contribution — — — 150,000 adjustment to capital expenditures (drg facility investment) — 139 — 10,251 restructuring — 9,582 — 20,258 adjusted free cash flow $ 218,657 $ 255,959 $ 346,560 $ 394,190 adjusted free cash flow conversion 230 % 272 % 116 % 142 % $ 786 $ (11 ) $ 775 $ 805 $ 825 - $ 805 $ 825 4 - 6% 724 4 728 745 760 - 745 760 2 - 4% 995 (30 ) 965 980 995 - 980 995 2 - 3% $ 2,506 $ (37 ) $ 2,468 $ 2,530 $ 2,580 $ 2,530 $ 2,580 3 to 5% $ 122 $ (2 ) $ 120 $ 131 $ 135 - $ 131 $ 135 9 - 12% 159 5 164 164 169 - 164 169 0 - 3% 142 34 176 177 182 - 177 182 1 - 4% 423 38 460 472 486 - 472 486 (40 ) - (40 ) (39 ) (40 ) - (39 ) (40 ) $ 383 $ 38 $ 420 $ 432 $ 446 - $ 432 $ 446 3 to 6% $ (40 ) $ - $ (40 ) $ (39 ) $ (40 ) - $ (39 ) $ (40 ) 12 3 15 8 9 $ 9 17 18 355 41 396 401 415 9 410 424 (87 ) (10 ) (97 ) (96 ) (100 ) (2 ) (98 ) (102 ) $ 267 $ 31 $ 298 $ 305 $ 315 $ 7 $ 312 $ 322 $ 6.58 $ 0.76 $ 7.34 $ 7.87 $ 8.08 $ 0.18 $ 8.05 $ 8.25 10 to 12% 40.6 40.6 38.8 39.0 38.8 39.0 24.6 % 24.6 % 24.0 % 24.0 % 24.0 % 24.0 % 15.5 % 15.5 % 16.2 % 16.4 % 16.2 % 16.4 % 70 to 90 bps 22.0 % 22.6 % 22.0 % 22.2 % 22.0 % 22.2 % (40 to 60 bps) 14.2 % 18.2 % 18.1 % 18.3 % 18.1 % 18.3 % (10) to 10 bps 15.3 % 17.0 % 17.1 % 17.3 % 17.1 % 17.3 % 10 to 30 bps $ 347 $ 347 $ 308 $ 328 $ 37 $ 345 $ 365 % total sales 0 - 2% 18% 2 - 4% 9% 1 - 3% 28% 9 - 11% 11% 2 - 4% 66% 1 - 3% 18% 6 - 8% 16% 4 - 6% 34% 3 - 5% 100% about curtiss-wright corporation curtiss-wright corporation (nyse:cw) is a global integrated business that provides highly engineered products, solutions and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process and industrial markets. we leverage a workforce of 7,800 highly skilled employees who develop, design and build what we believe are the best engineered solutions to the markets we serve. building on the heritage of glenn curtiss and the wright brothers, curtiss-wright has a long tradition of providing innovative solutions through trusted customer relationships. for more information, visit www.curtisswright.com. certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the company’s acquisitions, future cash flow from operations, and potential impacts of the covid-19 pandemic are forward-looking statements within the meaning of section 27a of the securities act of 1933, as amended ("securities act"), section 21e of the securities exchange act of 1934, as amended ("exchange act") and the private securities litigation reform act of 1995. these statements present management's expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; the impact of a global pandemic or national epidemic, and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. such factors are detailed in the company's annual report on form 10-k for the fiscal year ended december 31, 2020 and subsequent reports filed with the securities and exchange commission. this press release and additional information are available at www.curtisswright.com.
