Crane Co 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Crane Holdings, Co. Crane Holdings, Co.’s cash flows and earnings are subject to fluctuations from changes in interest rates and foreign currency exchange rates. Crane Holdings, Co. manages its exposures to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of interest-rate swap agreements and forward exchange contracts. Crane Holdings, Co. does not enter into derivatives or other financial instruments for trading or speculative purposes. 67 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Total net debt outstanding was $1,243.0 million as of December 31, 2022, which was at fixed rates of interest ranging from 4.20% to 6.55% and variable rates of interest of; (a) a base rate (determined in a customary manner), plus a margin of 0.25% or 0.50% that is determined based upon the ratings by S&P and Moody’s of Crane Holdings, Co.’s senior unsecured long-term debt (the “Index Debt Rating”) or (b) an adjusted Term SOFR (determined in a customary manner) for an interest period to be selected by Crane Holdings, Co., plus a margin of 1.25% or 1.50% that is determined based upon the Index Debt Rating. The following is an analysis of the potential changes in interest rates and currency exchange rates based upon sensitivity analysis that models effects of shifts in rates. These are not forecasts. • 68% of Crane Holdings, Co.’s year-end portfolio is comprised of fixed-rate debt; therefore, the effect of a market change in interest rates would not be significant. As of December 31, 2022, a hypothetical 1% increase in prevailing interest rates would increase Crane Holdings, Co.’s variable rate interest expense by approximately $4.0 million. • Based on a sensitivity analysis as of December 31, 2022, a 10% change in the foreign currency exchange rates for the year ended December 31, 2022 would have impacted our net earnings by approximately $15.2 million, due primarily to the British pound, euro and Canadian dollar. This calculation assumes that all currencies change in the same direction and proportion relative to the U.S. dollar and there are no indirect effects, such as changes in non-U.S. dollar sales volumes or prices. Crane Company Our cash flows and earnings are subject to fluctuations from changes in interest rates and foreign currency exchange rates. We manage our exposures to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of interest-rate swap agreements and forward exchange contracts. We do not enter into derivatives or other financial instruments for trading or speculative purposes. Total net debt outstanding was $399.6 million as of December 31, 2022, which was at variable rates of interest of; (a) a base rate (determined in a customary manner), plus a margin of 0.25% or 0.50% that is determined based upon the ratings by S&P and Moody’s of the Company’s senior unsecured long-term debt (the “Index Debt Rating”) or (b) an adjusted Term SOFR (determined in a customary manner) for an interest period to be selected by the Company, plus a margin of 1.25% or 1.50% that is determined based upon the Index Debt Rating. The following is an analysis of the potential changes in interest rates and currency exchange rates based upon sensitivity analysis that models effects of shifts in rates. These are not forecasts. • As of December 31, 2022, a hypothetical 1% increase in prevailing interest rates would increase our variable rate interest expense by approximately $4.0 million. 68 Table of Contents INDEX TO FINANCIAL STATEMENTS Crane Holdings, Co. Page Audited Consolidated Financial Statements Management’s Responsibility for Financial Reporting 70 Report of Independent Registered Public Accounting Firm 71 Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 73 Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 74 Consolidated Balance Sheets as of December 31, 2022 and 2021 75 Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 76 Consolidated Statements of Changes in Equity for the years ended December 31, 2022, 2021 and 2020 78 Notes to Consolidated Financial Statements 79 Crane Company (Supplemental) Page Audited Combined Financial Statements Report of Independent Registered Public Accounting Firm 124 Combined Statements of Operations for the years ended December 31, 2022, 2021 and 2020 126 Combined Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 127 Combined Balance Sheets as of December 31, 2022 and 2021 128 Combined Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 129 Combined Statements of Changes in Net Investment for the years ended December 31, 2022, 2021 and 2020 130 Notes to Combined Financial Statements 131 69 Table of Contents