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Item 8. Financial Statements and Supplementary Data

2024-02-26 compared with 2023-03-31 · 821 added, 2936 removed, 738 unchanged (84% of the section changed)

1 unchanged sentence

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Crane Holdings, Co.

and subsidiaries have been prepared by management in conformity with accounting principles

generally accepted in the United States of America and, in the judgment of management, present fairly and consistently the Companys financial position and results of operations and cash flows.

These statements by necessity include amounts that

are based on managements best estimates and judgments and give due consideration to materiality.

Management is responsible for establishing and maintaining

adequate internal control over financial reporting.

Crane Holdings, Co.s internal control system was designed to provide reasonable assurance to its management and board of directors regarding the preparation and fair presentation of published

financial statements.

The accompanying Consolidated Financial Statements of Crane Company have been prepared by management in conformity with accounting principles generally accepted in the United States of America and, in the judgment of management, present fairly and consistently the Company’s financial position and results of operations and cash flows.

These statements by necessity include amounts that are based on management’s best estimates and judgments and give due consideration to materiality.

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those systems determined to be

effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of Crane

Holdings, Co.s internal control over financial reporting as of December 31, 2022.

In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its

Internal ControlIntegrated Framework, released in 2013.

Based on our assessment we believe that, as of December 31, 2022, Crane Holdings, Co.s internal control over financial reporting is effective based on those criteria.

Deloitte & Touche LLP, the independent registered public accounting firm that also audited Crane Holdings, Co.s consolidated financial statements

included in this Annual Report on Form 10-K, audited the internal control over financial reporting as of December 31, 2022, and issued their related attestation report which is included herein.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.

In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its Internal Control—Integrated Framework, released in 2013.

Based on our assessment we believe that, as of December 31, 2023, the Company’s internal control over financial reporting is effective based on those criteria.

Deloitte & Touche LLP, the independent registered public accounting firm that also audited the Company’s Consolidated Financial Statements included in this Annual Report on Form 10-K, audited the internal control over financial reporting as of December 31, 2023, and issued their related attestation report which is included herein.

President and Chief Executive Officer

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(Principal Financial Officer)

The Section 302 certifications of Crane Holdings, Co.s Chief Executive Officer and its Principal Financial Officer have been

filed as Exhibit 31 to this Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The Section 302 certifications of the Company’s Chief Executive Officer and its Principal Financial Officer have been filed as Exhibit 31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Crane Holdings, Co.

on the Financial Statements

We have audited the accompanying consolidated balance sheets of Crane Holdings, Co.

and subsidiaries (the Company) as of

December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, 2022 and the related notes (collectively

referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations

and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Companys internal control

over financial reporting as of December 31, 2022, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report

dated March 1, 2023, expressed an unqualified opinion on the Companys internal control over financial reporting.

To the Shareholders and the Board of Directors of Crane Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Crane Company and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, 2023 and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Companys financial

statements based on our audits.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of

the Securities and Exchange Commission and the PCAOB.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan

and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of

the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated

below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue – Over-Time Basis — Refer to Note 1 to the financial statements

Audit Matter Description

The Company recognizes revenue as they fulfill their

performance obligations and transfer control of products to their customers.

The Company recognizes revenue as they fulfill their performance obligations and transfer control of products to their customers.

The Company has certain revenue contracts with the U.S.

government or indirectly to the U.S.

government through

subcontracts.

government through subcontracts.

The clauses of those contracts stipulate that any amounts included in work-in-progress are the property of the U.S.

government as they own any work-in progress as the contracted

product is being built.

government as they own any work-in progress as the contracted product is being built.

The Company uses the cost-to-cost method of determining their progress, measuring progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation.

In 2022, the Company

recognized approximately $120 million in revenue over time related to contracts in progress as of December 31, 2022.

We identified revenue recognized over

time as a critical audit matter because of the judgments necessary for management to determine the margin to be used to estimate revenue for the overtime revenue.

This required a high degree of auditor judgment when performing audit procedures to

audit managements estimates of margin at completion used to recognize revenue over time and evaluating the results of those procedures.

How the Critical

Audit Matter Was Addressed in the Audit

Our audit procedures performed related to the recognition of revenue recognized over-time included the following, among

We tested the effectiveness of controls related to the revenue recognized over-time, including managements controls

over costs incurred to date and estimates of margin at completion, as well as the accurate classification of contracts in the system during the order entry process.

In 2023, the Company recognized approximately $100 million in revenue over time related to contracts in progress as of December 31, 2023.

We identified revenue recognized over time as a critical audit matter because of the judgments necessary for management to determine the margin to be used to estimate revenue for the overtime revenue.

This required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of margin at completion used to recognize revenue over time and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures performed related to the recognition of revenue recognized over-time included the following, among others:

• We tested the effectiveness of controls related to the revenue recognized over-time, including management’s controls over costs incurred to date and estimates of margin at completion, as well as the accurate classification of contracts in the system during the order entry process.

• We selected a sample of contracts with customers that were recognized over time, and we performed the following:

Evaluated whether the contracts were properly included in managements calculation of long-term contract revenue based

on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

Evaluated the appropriateness and consistency of the methods of calculation and assumptions used by management to develop

the margin at completion applied to determine the revenue recognized.

• Evaluated whether the contracts were properly included in management’s calculation of long-term contract revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

• Evaluated the appropriateness and consistency of the methods of calculation and assumptions used by management to develop the margin at completion applied to determine the revenue recognized.

• We tested the mathematical accuracy of management’s calculation of revenue recognized.

We observed the Companys physical inventory counts to test the existence of inventory related to contracts with the

We evaluated managements ability to estimate future costs and margins at completion accurately by comparing actual

costs and margins at completion for similar contracts that were previously completed to managements historical estimates for such contracts.

• We evaluated management’s ability to estimate future costs and margins at completion accurately by comparing actual costs and margins at completion for similar contracts that were previously completed to management’s historical estimates for such contracts.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

March 1, 2023

February 26, 2024

We have served as the Company's auditor since 1979.

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(in millions, except per share data) 2023 2022 2021

Net sales $ 2,086.4 $ 2,035.0 $ 2,062.9

Operating costs and expenses:

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Loss on divestiture of asbestos-related assets and liabilities — 162.4 —

Restructuring charges (gains), net

Acquisition-related and integration charges

Operating profit 283.8 37.9 221.7

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Miscellaneous income, net 0.8 7.9 15.6

Total other income (expense)

Income before income taxes

Total other (expense) income, net ( 16.8 ) 233.5 12.0

Income from continuing operations before income taxes 267.0 271.4 233.7

Provision for income taxes 63.2 99.8 36.3

Net income before allocation to noncontrolling interests

Noncontrolling interest in subsidiaries earnings

Net income from continuing operations attributable to common shareholders 203.8 171.6 197.4

Income from discontinued operations, net of tax (Note 3) 52.1 229.5 238.0

Net income attributable to common shareholders $ 255.9 $ 401.1 $ 435.4

Earnings per share:

Earnings per basic share:

Earnings per basic share from continuing operations $ 3.59 $ 3.04 $ 3.38

Earnings per basic share from discontinued operations 0.92 4.07 4.08

Earnings per basic share $ 4.51 $ 7.11 $ 7.46

Earnings per diluted share:

Earnings per diluted share from continuing operations $ 3.54 $ 3.00 $ 3.34

Earnings per diluted share from discontinued operations 0.91 4.01 4.02

Earnings per diluted share $ 4.45 $ 7.01 $ 7.36

Average shares outstanding:

Basic 56.7 56.4 58.4

Diluted 57.5 57.2 59.2

See Notes to Consolidated Financial Statements

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Net income before allocation to noncontrolling interests $ 255.9 $ 401.1 $ 435.4

Components of other comprehensive (loss) income, net of tax

Components of other comprehensive income (loss), net of tax

Currency translation adjustment 20.7 ( 93.3 ) ( 69.2 )

Changes in pension and postretirement plan assets and benefit obligation, net of tax 10.0 30.0 96.0

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax 30.7 ( 63.3 ) 26.8

Comprehensive income before allocation to noncontrolling interests 286.6 337.8 462.2

Noncontrolling interests in comprehensive (loss) income

Noncontrolling interests in comprehensive income ( 0.1 ) ( 0.2 ) 0.6

Comprehensive income attributable to common shareholders $ 286.7 $ 338.0 $ 461.6

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Cash and cash equivalents $ 329.6 $ 427.0

Current insurance receivable - asbestos

Accounts receivable, net 306.4 269.7

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Other current assets 101.7 135.1

Current assets of discontinued operations — 625.9

Total current assets 1,090.8 1,751.9

Property, plant and equipment, net 270.5 248.3

Insurance receivable - asbestos

Long-term deferred tax assets 2.7 3.1

Intangible assets, net 87.9 71.7

Goodwill 747.7 690.9

Other assets 134.0 120.8

Long-term assets of discontinued operations — 1,504.9

Total assets $ 2,333.6 $ 4,391.6

Liabilities and equity

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Accounts payable 179.1 179.2

Current asbestos liability

Accrued liabilities 273.7 260.5

and foreign taxes on income 14.3 34.2

Current liabilities of discontinued operations — 614.7

Total current liabilities 467.1 1,488.2

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Long-term deferred tax liability 37.1 55.3

Long-term asbestos liability

Other liabilities 105.6 85.2

Long-term liabilities of discontinued operations — 726.9

Commitments and contingencies (Note 13)

Preferred shares, par value 0.01;

5,000,000 shares authorized

Common shares, par value $ 1.00 ;

200,000,000 shares authorized;

72,426,389 shares issued;

56,325,382 and

57,835,865 shares outstanding in 2022 and 2021, respectively

66,475,307 and 200,000,000 shares authorized;

56,919,443 and 72,426,389 shares issued;

56,919,443 and 56,325,382 shares outstanding in 2023 and 2022, respectively

Capital surplus 398.2 373.8

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Treasury stock:

16,101,007 and 14,590,274 treasury shares in 2022 and 2021, respectively

16,101,007 treasury shares in 2022.

Total shareholders’ equity 1,357.8 1,901.4

Noncontrolling interest 2.5 2.6

Total equity 1,360.3 1,904.0

Total liabilities and equity $ 2,333.6 $ 4,391.6

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Operating activities:

Net income before allocations to noncontrolling interests

Net income from continuing operations attributable to common shareholders $ 203.8 $ 171.6 $ 197.4

Non-cash loss on divestiture of asbestos-related assets and liabilities — 148.9 —

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Stock-based compensation expense 26.1 21.3 21.7

Defined benefit plans and postretirement credit

Defined benefit plans and postretirement cost (credit) 9.3 ( 1.0 ) ( 6.7 )

Deferred income taxes ( 21.5 ) 0.8 ( 4.9 )

Cash (used for) provided by operating working capital

Cash used for operating working capital ( 49.5 ) ( 30.3 ) 30.1

Defined benefit plans and postretirement contributions ( 18.3 ) ( 19.0 ) ( 26.9 )

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Divestiture of asbestos-related assets and liabilities — ( 550.0 ) —

Total (used for) provided by operating activities

Other 8.3 16.4 5.2

Total provided by (used for) operating activities from continuing operations $ 193.6 $ ( 472.2 ) $ 185.1

Investing activities:

Proceeds from disposition of capital assets

Payments for acquisition - net of cash acquired $ ( 90.5 ) $ — $ —

Capital expenditures ( 42.7 ) ( 37.1 ) ( 35.3 )

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Proceeds from sale of marketable securities — — 40.0

Payment for acquisition - net of cash acquired

Total provided by (used for) investing activities

Other investing activities 0.7 4.3 23.5

Total (used for) provided by investing activities from continuing operations $ ( 132.5 ) $ 285.3 $ 18.2

Financing activities:

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Debt issuance costs ( 9.0 ) — —

Proceeds from issuance of commercial paper with maturities greater than 90 days

Repayments of commercial paper with maturities greater than 90 days — — ( 27.1 )

Net repayments from issuance of commercial paper with maturities of 90 days or less

Proceeds from revolving credit facility

Repayments of revolving credit facility

Proceeds from term loan 300.0 — —

Proceeds from term facility of discontinued operations 350.0 399.4 —

Repayment of term loan ( 450.6 ) — ( 348.1 )

Total provided by (used for) financing activities

Distribution of Crane NXT, Co.

( 578.1 ) — —

Total (used for) provided by financing activities from continuing and discontinued operations $ ( 423.2 ) $ 106.0 $ ( 557.9 )

Discontinued Operations:

Total provided by operating activities 34.6 320.6 313.4

Total used for investing activities ( 4.1 ) ( 21.3 ) ( 18.5 )

Increase in cash and cash equivalents from discontinued operations $ 30.5 $ 299.3 $ 294.9

For the year ended December 31,

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Effect of exchange rates on cash and cash equivalents $ 3.6 $ ( 39.4 ) $ ( 12.7 )

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

(Decrease) increase in cash and cash equivalents ( 328.0 ) 179.0 ( 72.4 )

Cash and cash equivalents at beginning of period (a)

657.6 478.6 551.0

Cash and cash equivalents at end of period $ 329.6 $ 657.6 $ 478.6

Detail of cash (used for) provided by operating working capital

Cash and cash equivalents of discontinued operations — 230.6 100.7

Cash and cash equivalents of continuing operations at end of period $ 329.6 $ 427.0 $ 377.9

(a) Includes cash and cash equivalents of discontinued operations.

Detail of cash used for operating working capital from continuing operations:

Accounts receivable $ ( 23.4 ) $ ( 46.6 ) $ ( 36.5 )

Inventories ( 42.0 ) ( 42.1 ) ( 27.4 )

Other current assets 38.1 ( 8.7 ) ( 7.8 )

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and foreign taxes on income ( 26.8 ) 30.8 11.7

Total $ ( 49.5 ) $ ( 30.3 ) $ 30.1

Supplemental disclosure of cash flow information:

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in millions, except share data)

(in millions, except share data) Common

Par Value Capital

Surplus Retained

Earnings Accumulated

Comprehensive

Loss Treasury

Shareholders’

Noncontrolling

Equity Noncontrolling

Interest Total

BALANCE DECEMBER 31, 2020 72.4 $ 330.7 $ 2,192.8 $ ( 466.4 ) $ ( 600.6 ) 1,528.9 $ 2.2 $ 1,531.1

Net income — — 435.4 — — 435.4 — 435.4

Cash dividends ($ 1.72 per share)

— — ( 100.9 ) — — ( 100.9 ) — ( 100.9 )

Reacquisition on open market of 943,048 shares

— — — — ( 96.3 ) ( 96.3 ) — ( 96.3 )

Exercise of stock options, net of shares reacquired of 553,655

— — — — 16.5 16.5 — 16.5

Stock-based compensation — 24.9 — — — 24.9 — 24.9

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BALANCE DECEMBER 31, 2021 72.4 $ 363.9 $ 2,527.3 $ ( 440.2 ) $ ( 691.1 ) $ 1,832.3 $ 2.8 $ 1,835.1

Net income — — 401.1 — — 401.1 — 401.1

Cash dividends ($ 1.88 per share)

— — ( 105.6 ) — — ( 105.6 ) — ( 105.6 )

Reacquisition on open market of 1,959,069 shares

— — — — ( 203.7 ) ( 203.7 ) — ( 203.7 )

Exercise of stock options, net of shares reacquired of 324,465

— — — — 21.9 21.9 — 21.9

Stock-based compensation — 24.2 — — — 24.2 — 24.2

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BALANCE DECEMBER 31, 2022 72.4 $ 373.8 $ 2,822.8 $ ( 503.3 ) $ ( 864.3 ) $ 1,901.4 $ 2.6 $ 1,904.0

Net income — — 255.9 — — 255.9 — 255.9

Cash dividends ($ 1.01 per share)

Reacquisition on open market of 1,959,069 shares

Exercise of stock options, net of shares reacquired of 324,465 shares

— — ( 57.3 ) — — ( 57.3 ) — ( 57.3 )

Exercise of stock options 0.2 8.8 — — 19.8 28.8 — 28.8

Stock-based compensation — 19.0 — — — 19.0 — 19.0

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Currency translation adjustment — — — 20.8 — 20.8 ( 0.1 ) 20.7

Capital effect of spin-off ( 15.7 ) — ( 832.4 ) — 848.1 — — —

Distribution of Crane NXT, Co.

(Note 1) — — ( 1,228.3 ) 414.5 — ( 813.8 ) — ( 813.8 )

BALANCE DECEMBER 31, 2023 56.9 $ 398.2 $ 960.7 $ ( 58.0 ) $ — $ 1,357.8 $ 2.5 $ 1,360.3

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Nature of Operations

We are a diversified manufacturer of highly engineered

industrial products currently comprised of four reporting segments:

Process Flow Technologies, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials.

Our primary end markets include commercial and

military aerospace, defense and space, chemical production, pharmaceutical production, water and wastewater, non-residential and municipal construction, energy, banknote design and production, payment automation solutions, along with a wide range of

general industrial and certain consumer related end markets.

We are a diversified manufacturer of highly engineered industrial products currently comprised of three reporting segments:

Aerospace & Electronics, Process Flow Technologies, and Engineered Materials.

Our primary end markets include commercial and military aerospace, defense and space, chemical production, pharmaceutical production, water and wastewater, non-residential and municipal construction, energy, along with a wide range of general industrial and certain consumer related end markets.

See Note 4, “Segment Information” for the relative size of these segments in relation to the total company (both net sales and total assets).

Holding Company Reorganization

On May 16, 2022, Crane Co., a Delaware

corporation (Crane Co.), completed its previously announced reorganization merger pursuant to the Agreement and Plan of Merger, dated as of February 28, 2022 (the Reorganization Agreement), by and among Crane Co., Crane

Holdings, Co., a Delaware corporation (Crane Holdings), and Crane Transaction Company, LLC, a Delaware limited liability company and, as of immediately prior to the consummation of such merger, a wholly-owned subsidiary of Crane Holdings

(Merger Sub).

On May 16, 2022, Crane Co., a Delaware corporation (“Crane Co.”), completed its previously announced reorganization merger pursuant to the Agreement and Plan of Merger, dated as of February 28, 2022 (the “Reorganization Agreement”), by and among Crane Co., Crane Holdings, Co., a Delaware corporation (“Crane Holdings”), and Crane Transaction Company, LLC, a Delaware limited liability company and, as of immediately prior to the consummation of such merger, a wholly-owned subsidiary of Crane Holdings (“Merger Sub”).

The Reorganization Agreement provided for the merger of Crane Co.

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Following the Reorganization Merger, on May 16, 2022, Crane Co.

converted from a Delaware corporation into a Delaware limited liability company named Crane

LLC (such conversion, together with the Reorganization Merger, the Reorganization).

Following the Reorganization, substantially all of the assets of Crane LLC were distributed, assigned, transferred, conveyed and delivered to, and

certain non-asbestos related liabilities of Crane LLC were assumed by, Crane Holdings.

On May 17, 2022, Crane LLC converted from a Delaware limited liability company to a Delaware corporation named Crane Co. Subsequently, on

May 26, 2022, Crane Co.

filed a Certificate of Amendment to its Certificate of Incorporation (the Certificate of Amendment) with the Secretary of State of the State of Delaware, which became effective upon filing, pursuant to which

the Crane Co.

converted from a Delaware corporation into a Delaware limited liability company named “Crane LLC” (such conversion, together with the Reorganization Merger, the “Reorganization”).

Following the Reorganization, substantially all of the assets of Crane LLC were distributed, assigned, transferred, conveyed and delivered to, and certain non-asbestos related liabilities of Crane LLC were assumed by, Crane Holdings.

On May 17, 2022, Crane LLC converted from a Delaware limited liability company to a Delaware corporation named “Crane Co.” Subsequently, on May 26, 2022, Crane Co.

filed a Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware, which became effective upon filing, pursuant to which the Crane Co.

officially changed its name from “Crane Co.” to “Redco Corporation”.

The “Crane Co.” name has been reserved for future use by Crane Holdings.

On March 30, 2022, the Company announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies (the “Separation”).

The Separation is expected to occur through a tax-free distribution and is expected to be completed in April 2023, subject to the satisfaction of customary conditions and final approval by Crane Holdings, Co.’s Board of Directors.

On April 3, 2023, Crane Holdings, Co.

completed the Separation into two independent, publicly-traded companies, Crane NXT, Co.

and Crane Company, through a pro-rata distribution (the "Distribution") of all of the outstanding common stock of Crane Company to the stockholders of Crane Holdings, Co., which on April 3, 2023 was renamed “Crane NXT, Co.” The Distribution was effective at 5:00 p.m., Eastern Time, on April 3, 2023.

As a result of the Distribution, Crane Company became an independent public company.

Our common stock is listed under the symbol "CR" on the New York Stock Exchange.

Due to Crane Company’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to Crane NXT, Co., among other factors, Crane Company was treated as the “accounting spinnor” and therefore was the “accounting successor” to Crane Holdings, Co.

for accounting purposes, notwithstanding the legal form of the Separation.

Therefore, following the Separation, the historical Consolidated Financial Statements of Crane Company reflect the historical Consolidated Financial Statements of Crane Holdings, Co.

with the Payment & Merchandising Technologies segment and other distributed assets and liabilities classified as discontinued operations.

In connection with the Separation on April 3, 2023, Crane Holdings, Co., which was renamed “Crane NXT, Co.,” and Crane Company entered into various agreements to effect the Separation and provide a framework for their relationship after the Separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax matters agreement and an intellectual property matters agreement.

These agreements provide for the allocation between Crane NXT, Co.

and Crane Company of assets, employees, liabilities and obligations (including property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at, and after the consummation of the Separation and govern certain relationships between Crane NXT, Co.

and Crane Company after the Separation.

The Company recorded $ 3.4 million of income within Miscellaneous income, ne t related to transactions under the transition services and tax matters agreements with Crane NXT, Co.

As of December 31, 2023, the Company had a receivable of $ 2.2 million related to the transition services agreement and tax matters agreement.

Additionally, as part of the Separation, to a limited extent, the Company has agreed to indemnify Crane NXT, Co.

for uncertain tax benefits, which are attributable to the Company’s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023, the total liability was $ 7.0 million and was included in other liabilities on our Consolidated Balance Sheets.

On April 3, 2023, prior to the consummation of the Separation, the Board of Directors of Crane Company declared and paid a one-time cash dividend in the amount of $ 275 million to Crane Holdings, Co., its sole stockholder at that time, as part of establishing the capital structure at Crane NXT, Co.

In connection with the Separation, we distributed net assets of $ 813.8 million through equity, including the cash dividend of $ 275 million and $ 303 million in cash balances.

As a result of the Separation, the Payment & Merchandising segment qualified as a discontinued operation and accordingly, the assets, liabilities and results of operations of this segment are reported as discontinued operations.

See Note 3 for additional information.

Divestiture of asbestos-related assets and liabilities

On August 12,

2022, Crane Holdings, Co., Crane Company, a wholly-owned subsidiary of Crane Holdings, Co., and Redco Corporation (Redco), then a wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related

insurance assets, entered into a Stock Purchase Agreement (the Redco Purchase Agreement) with Spruce Lake Liability Management Holdco LLC (Redco Buyer), an unrelated third party and long-term liability management company

specializing in the acquisition and management of legacy corporate liabilities whereby Crane Company transferred to Redco Buyer all of the issued and outstanding shares of Redco (the Redco Sale).

In connection with the Redco Sale, Crane

Holdings, Co., on behalf of Crane Company, contributed approximately $550 million in cash to Redco, which was funded by a combination of short-term borrowings and cash on hand.

As a result of the Redco Sale, all asbestos obligations and

liabilities, related insurance assets and associated deferred tax assets have been removed from Crane Holdings, Co.s consolidated balance sheets effective August 12, 2022.

A loss on the divestiture of asbestos-related assets and

liabilities of $162.4 million was recognized in the consolidated statements of operations for the year ended December 31, 2022.

Sale of Crane

On April 8, 2022, the Company entered into an agreement to sell the Crane Supply business for CAD 380 million on a cash-free and debt-free

On August 12, 2022, Crane Holdings, Co., Crane Company, a wholly-owned subsidiary of Crane Holdings, Co., and Redco Corporation (“Redco”), then a wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related insurance assets, entered into a Stock Purchase Agreement (the “Redco Purchase Agreement”) with Spruce Lake Liability Management Holdco LLC (“Redco Buyer”), an unrelated third party and long-term liability management company specializing in the acquisition and management of legacy corporate liabilities whereby Crane Company transferred to Redco Buyer all of the issued and outstanding shares of Redco (the “Redco Sale”).

In connection with the Redco Sale, Crane Holdings, Co., on behalf of Crane Company, contributed approximately $ 550 million in cash to Redco, which was funded by a combination of short-term borrowings and cash on hand.

As a result of the Redco Sale, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets have been removed from Crane Holdings, Co.’s consolidated balance sheets effective August 12, 2022.

A loss on the divestiture of asbestos-related assets and liabilities of $ 162.4 million was recognized in the Consolidated Statements of Operations for the year ended December 31, 2022.

Sale of Crane Supply

On April 8, 2022, the Company entered into an agreement to sell the Crane Supply business for CAD 380 million on a cash-free and debt-free basis.

Subsequent to net working capital and other closing adjustments, the sale closed on May 31, 2022 for CAD 402 million.

In August 2022, the Company received CAD 5 million related to a final working capital adjustment.

recognized a total gain on sale of $232.5 million.

Pending Separation

On March 30, 2022, the Company announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded

companies (the Separation).

The Separation is expected to occur through a tax-free distribution and is expected to be completed in April, 2023, subject to the satisfaction of customary conditions and final approval by Crane Holdings,

Co.s Board of Directors.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recognized a total gain on sale of $ 232.5 million.

Termination of Agreement to Sell Engineered Materials

On May 16, 2021, we entered into an agreement to sell the Engineered Materials segment to Grupo Verzatec S.A.

(Verzatec) for $360 million

on a cash-free and debt-free basis.

(“Verzatec”) for $ 360 million on a cash-free and debt-free basis.

In the second quarter of 2021, the assets and liabilities of the segment were classified as held for sale.

On May 26, 2022, Verzatec terminated the sale agreement and paid $7.5 million to the Company in

termination fees, which is presented within Miscellaneous income on the Consolidated Statements of Operations.

As such, as of June 30, 2022 the Engineered Materials segment is no longer classified as assets held for sale and is presented herein

as continuing operations for all periods presented.

On May 26, 2022, Verzatec terminated the sale agreement and paid $ 7.5 million to the Company in termination fees, which is presented within Miscellaneous income, net on the Consolidated Statements of Operations.

Significant Accounting Policies

Accounting Principles.

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States

of America (U.S.

The consolidated financial statements include the accounts of Crane Holdings, Co.

and our subsidiaries.

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

The Consolidated Financial Statements include the accounts of Crane Company and our subsidiaries.

All intercompany balances and transactions have been eliminated upon consolidation.

As used in these notes,

the terms we, us, our, Crane and the Company mean Crane Holdings, Co.

and our subsidiaries unless the context specifically states or implies otherwise.

As used in these notes, the terms "we," "us," "our," "Crane" and the "Company" mean Crane Company and our subsidiaries unless the context specifically states or implies otherwise.

Basis of presentation.

Certain amounts in the prior years consolidated financial statements have been reclassified to conform to the

current year presentation.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not

precisely reflect the absolute figures.

Certain amounts in the prior years’ Consolidated Financial Statements have been reclassified to conform to the current year presentation.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

Use of Estimates.

Our accounting principles require management to make estimates and assumptions that affect

the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period.

Our accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period.

Actual results may differ from those estimated.

Estimates and assumptions are

reviewed periodically, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary.

Estimates are used when accounting for such items as asset valuations, allowance for doubtful

accounts, depreciation and amortization, impairment assessments, reserve for excess and obsolete inventory, reserve for warranty provision, restructuring provisions, employee benefits, taxes, environmental liability and contingencies.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary.

Estimates are used when accounting for such items as asset valuations, allowance for doubtful accounts, depreciation and amortization, impairment assessments, reserve for excess and obsolete inventory, reserve for warranty provision, restructuring provisions, employee benefits, taxes, environmental liability and contingencies.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Currency Translation.

Assets and liabilities of subsidiaries that prepare financial statements in currencies other than the U.S.

translated at the rate of exchange in effect on the balance sheet date;

dollar are translated at the rate of exchange in effect on the balance sheet date;

results of operations are translated at the monthly average rates of exchange prevailing during the year.

The related translation adjustments are included in accumulated other

comprehensive income (loss) in a separate component of equity.

The related translation adjustments are included in accumulated other comprehensive income (loss) in a separate component of equity.

Revenue Recognition.

In accordance with Accounting Standards Codification

(ASC) Topic 606 Revenue from Contracts with Customers, we recognize revenue when control of the promised goods or services in a contract transfers to the customer, in an amount that reflects the consideration we expect to be

entitled to in exchange for those goods or services.

We account for a contract when both parties have approved and committed to the terms, each partys rights and payment obligations under the contract are identifiable, the contract has

commercial substance, and it is probable that we will collect substantially all of the consideration.

When shipping and handling activities are performed after the customer obtains control of product, we elect to account for shipping and handling as

activities to fulfill the promise to transfer the product.

In determining the transaction price of a contract, we exercise judgment to determine the total transaction price when it includes estimates of variable consideration, such as rebates and

milestone payments.

In accordance with Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers,” we recognize revenue when control of the promised goods or services in a contract transfers to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We account for a contract when both parties have approved and committed to the terms, each party’s rights and payment obligations under the contract are identifiable, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration.

When shipping and handling activities are performed after the customer obtains control of product, we elect to account for shipping and handling as activities to fulfill the promise to transfer the product.

In determining the transaction price of a contract, we exercise judgment to determine the total transaction price when it includes estimates of variable consideration, such as rebates and milestone payments.

We generally estimate variable consideration using the expected value method and consider all available information (historical, current, and forecasted) in estimating these amounts.

Variable consideration is only included in the

transaction price to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

We elect to exclude from the transaction

price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Variable consideration is only included in the transaction price to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

We elect to exclude from the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer.

We primarily generate revenue through the manufacture and sale of engineered industrial products.

Each product within a

contract generally represents a separate performance obligation, as we do not provide a significant service of integrating or installing the products, the products do not customize each other, and the products can function independently of each

Each product within a contract generally represents a separate performance obligation, as we do not provide a significant service of integrating or installing the products, the products do not customize each other, and the products can function independently of each other.

Control of products generally transfers to the customer at a point in time, as the customer does not control the products as they are manufactured.

We exercise judgment and consider the timing of right to payment, transfer of risk and

rewards, transfer of title, transfer of physical possession, and customer acceptance when determining when control transfers to the customer.

As a result, revenue from the sale of products is generally recognized at a point in time - either upon

shipment or delivery - based on the specific shipping terms in the contract.

We exercise judgment and consider the timing of right to payment, transfer of risk and rewards, transfer of title, transfer of physical possession, and customer acceptance when determining when control transfers to the customer.

As a result, revenue from the sale of products is generally recognized at a point in time - either upon shipment or delivery - based on the specific shipping terms in the contract.

When products are customized or products are sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, revenue is recognized over time

because control is transferred continuously to customers, as the contract progresses.

government through subcontracts, revenue is recognized over time because control is transferred continuously to customers, as the contract progresses.

We exercise judgment to determine whether the products have an alternative use to us.

When an alternative use does not exist for these products and we are entitled

to payment for performance completed to date which includes a reasonable profit margin, revenue is recognized over time.

When an alternative use does not exist for these products and we are entitled to payment for performance completed to date which includes a reasonable profit margin, revenue is recognized over time.

When a contract with the U.S.

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government owns any work-in-progress as the contracted product is being built, revenue is recognized over time.

The measure of progress applied by us is the cost-to-cost method as this provides the most faithful depiction of the pattern of transfer

The measure of progress applied by us is the cost-to-cost method as this provides the most faithful depiction of the pattern of transfer of control.

Under this method, we measure progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation.

This method effectively reflects our progress toward completion, as this methodology includes

any work-in-process amounts as part of the measure of progress.

This method effectively reflects our progress toward completion, as this methodology includes any work-in-process amounts as part of the measure of progress.

Costs incurred represent work performed, which corresponds with, and thereby depicts, the transfer of control to the customer.

Total revenue recognized and cost estimates are updated on

a monthly basis.

Total revenue recognized and cost estimates are updated on a monthly basis.

In 2023, the Company recognized approximately $ 100.0 million in revenue over time related to contracts in progress as of December 31, 2023.

When there are multiple performance obligations in a single contract, the total transaction price is allocated to each performance obligation based on their relative

standalone selling prices.

When there are multiple performance obligations in a single contract, the total transaction price is allocated to each performance obligation based on their relative standalone selling prices.

We maximize the use of observable data inputs and consider all information (including market conditions, segment-specific factors, and information about the customer or class of customer) that is reasonably available.

standalone selling price for our products and services is generally determined using an observable list price, which differs by class of customer.

recognized from performance obligations satisfied in previous periods (for example, due to changes in the transaction price or estimates), was not material in any period.

The standalone selling price for our products and services is generally determined using an observable list price, which differs by class of customer.

Revenue recognized from performance obligations satisfied in previous periods (for example, due to changes in the transaction price or estimates), was not material in any period.

Payment for products is due within a limited time period after shipment or delivery, and we generally do not offer extended payment terms.

Payment is typically due

within 30-90 calendar days of the respective invoice dates.

Payment is typically due within 30-90 calendar days of the respective invoice dates.

Customers generally do not make large upfront payments.

Any advanced payments received do not provide us with a significant benefit of financing, as the payments are meant to secure

materials used to fulfill the contract, as opposed to providing us with a significant financing benefit.

When an unconditional right to consideration exists, we

record these amounts as receivables.

Any advanced payments received do not provide us with a significant benefit of financing, as the payments are meant to secure materials used to fulfill the contract, as opposed to providing us with a significant financing benefit.

When an unconditional right to consideration exists, we record these amounts as receivables.

When amounts are dependent on factors other than the passage of time in order for payment from a customer to become due, we record a contract asset.

Contract assets represent unbilled amounts that typically arise

from contracts for customized products or contracts for products sold directly to the U.S.

Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the

government through subcontracts, where revenue recognized using

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

Contract liabilities represent advance payments from customers.

Revenue related to contract liabilities is recognized when control is transferred to

the customer.

Revenue related to contract liabilities is recognized when control is transferred to the customer.

We pay sales commissions related to certain contracts, which qualify as incremental costs of obtaining a contract.

However, the sales commissions

generally relate to contracts for products or services satisfied at a point in time or over a period of time less than one year.

As a result, we apply the practical expedient that allows an entity to recognize incremental costs of obtaining a

contract as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

However, the sales commissions generally relate to contracts for products or services satisfied at a point in time or over a period of time less than one year.

As a result, we apply the practical expedient that allows an entity to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less.

See Note 5, “Revenue” for further details.

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Cost of goods sold includes the costs of inventory sold and the related purchase and distribution costs.

In addition to material, labor

and direct overhead and inventoried cost, cost of goods sold include allocations of other expenses that are part of the production process, such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs,

amortization of production related intangible assets and depreciation expense.

In addition to material, labor and direct overhead and inventoried cost, cost of goods sold include allocations of other expenses that are part of the production process, such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, amortization of production related intangible assets and depreciation expense.

We also include costs directly associated with products sold, such as warranty provisions.

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Selling, general and administrative expenses are recognized as incurred.

Such expenses include the costs of

promoting and selling products and include such items as compensation, advertising, sales commissions and travel.

Also included are costs related to compensation for other operating activities such as executive office administrative and engineering

functions, as well as general operating expenses such as office supplies, non-income taxes, insurance and office equipment rentals.

Such expenses include the costs of promoting and selling products and include such items as compensation, advertising, sales commissions and travel.

Also included are costs related to compensation for other operating activities such as executive office administrative and engineering functions, as well as general operating expenses such as office supplies, non-income taxes, insurance and office equipment rentals.

Income Taxes.

account for income taxes in accordance with ASC Topic 740 Income Taxes (ASC 740) which requires an asset and liability approach for the financial accounting and reporting of income taxes.

Under this method, deferred income

taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements.

These balances are measured using the enacted tax rates expected to

apply in the year(s) in which these temporary differences are expected to reverse.

We account for income taxes in accordance with ASC Topic 740 “Income Taxes” (“ASC 740”) which requires an asset and liability approach for the financial accounting and reporting of income taxes.

Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements.

These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse.

The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.

Based on consideration of all available evidence regarding their utilization, we record net deferred tax assets to the extent that it is more likely than not that they

will be realized.

is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

The evidence we consider in reaching such conclusions includes, but is not limited to, (1) future reversals of existing taxable temporary

differences, (2) future taxable income exclusive of reversing taxable temporary differences, (3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, (4) cumulative losses in recent years, (5) a

history of tax losses or credit carryforwards expiring unused, (6) a carryback or carryforward period that is so brief it limits realization of tax benefits, and (7) a strong earnings history exclusive of the loss that created the

carryforward and support showing that the loss is an aberration rather than a continuing condition.

We account for unrecognized tax benefits in accordance with ASC

740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination

by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position.

The tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being

realized upon ultimate settlement.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line of our Consolidated

Statement of Operations, while accrued interest and penalties are included within the related tax liability line of our Consolidated Balance Sheets.

Based on consideration of all available evidence regarding their utilization, we record net deferred tax assets to the extent that it is more likely than not that they will be realized.

Where, based on the weight of all available evidence, it is more likely than not that some amount of a deferred tax asset will not be realized, we establish a valuation allowance for the amount that, in management's judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

The evidence we consider in reaching such conclusions includes, but is not limited to, (1) future reversals of existing taxable temporary differences, (2) future taxable income exclusive of reversing taxable temporary differences, (3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, (4) cumulative losses in recent years, (5) a history of tax losses or credit carryforwards expiring unused, (6) a carryback or carryforward period that is so brief it limits realization of tax benefits, and (7) a strong earnings history exclusive of the loss that created the carryforward and support showing that the loss is an aberration rather than a continuing condition.

We account for unrecognized tax benefits in accordance with ASC 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position.

The tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line of our Consolidated Statement of Operations, while accrued interest and penalties are included within the related tax liability line of our Consolidated Balance Sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share.

Our basic earnings per share calculations are based on the weighted average number of

common shares outstanding during the year.

Our basic earnings per share calculations are based on the weighted average number of common shares outstanding during the year.

Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units.

The dilutive effect of potentially dilutive

securities is reflected in diluted earnings per common share by application of the treasury method.

The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method.

Diluted earnings per share gives effect to all potential dilutive common shares outstanding during the year.

(in millions, except per share data) For the year ended December 31, 2023 2022 2021

Net income from continuing operations attributable to common shareholders $ 203.8 $ 171.6 $ 197.4

Income from discontinued operations, net of tax (Note 3) 52.1 229.5 238.0

Net income attributable to common shareholders $ 255.9 $ 401.1 $ 435.4

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Average diluted shares outstanding 57.5 57.2 59.2

Basic earnings per share

Diluted earnings per share

The computation of diluted earnings per share excludes the effect of the potential exercise of stock options when the average market

price of the common stock is lower than the exercise price of the related stock options.

Earnings per basic share:

Earnings per basic share from continuing operations $ 3.59 $ 3.04 $ 3.38

Earnings per basic share from discontinued operations 0.92 4.07 4.08

Earnings per basic share $ 4.51 $ 7.11 $ 7.46

Earnings per diluted share:

Earnings per diluted share from continuing operations $ 3.54 $ 3.00 $ 3.34

Earnings per diluted share from discontinued operations 0.91 4.01 4.02

Earnings per diluted share $ 4.45 $ 7.01 $ 7.36

The computation of diluted earnings per share excludes the effect of the potential exercise of stock options when the average market price of the common stock is lower than the exercise price of the related stock options.

During 2023, 2022 and 2021, the number of stock options excluded from the computation was 0.4 million, 0.4 million and 1.2 million, respectively.

Cash and Cash Equivalents.

Cash and cash equivalents include highly liquid investments with original maturities of three months or less that are readily

convertible to cash and are not subject to significant risk from fluctuations in interest rates.

Cash and cash equivalents include highly liquid investments with original maturities of three months or less that are readily convertible to cash and are not subject to significant risk from fluctuations in interest rates.

As a result, the carrying amount of cash and cash equivalents approximates fair value.

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Accounts receivable are carried at net realizable value.

The allowance for doubtful accounts was $14.1 million and $10.4

million as of December 31, 2022 and 2021, respectively.

The allowance for doubtful accounts was $ 8.4 million and $ 8.0 million as of December 31, 2023 and 2022, respectively.

The allowance for doubtful accounts activity was not material to our financial results for the years ended December 31, 2023 and 2022.

Concentrations of credit risk with respect to

accounts receivable are limited due to the large number of customers and relatively small account balances within the majority of our customer base and their dispersion across different businesses.

We periodically evaluate the financial strength of

our customers and believe that our credit risk exposure is limited.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers and relatively small account balances within the majority of our customer base and their dispersion across different businesses.

We periodically evaluate the financial strength of our customers and believe that our credit risk exposure is limited.

Inventories, net.

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Inventories, net include the costs of material, labor and overhead and are stated at the lower of cost or net realizable value.

inventories are stated at either the lower of cost or net realizable value using the last-in, first-out (LIFO) method or the lower of cost or net realizable value using the first-in, first-out (FIFO) method.

Inventories held

in foreign locations are primarily stated at the lower of cost or market using the FIFO method.

Domestic inventories are stated at either the lower of cost or net realizable value using the last-in, first-out (“LIFO”) method or the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method.

Inventories held in foreign locations are primarily stated at the lower of cost or market using the FIFO method.

The LIFO method is not being used at our foreign locations as such a method is not allowable for tax purposes.

Changes in the levels of LIFO inventories

have increased cost of sales by $8.4 million, $3.6 million and $2.3 million for the years ended December 31, 2022, 2021 and 2020 respectively.

The portion of inventories costed using the LIFO method was 37.2% and 30.1% of

consolidated inventories as of December 31, 2022, and 2021, respectively.

If inventories that were valued using the LIFO method had been valued under the FIFO method, they would have been higher by $38.8 million and $30.4 million as

of December 31, 2022 and 2021, respectively.

The reserve for excess and obsolete inventory was $99.3 million and $98.6 million as of December 31, 2022, and 2021, respectively.

Changes in the levels of LIFO inventories have increased cost of sales by $ 4.4 million, $ 6.0 million and $ 2.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The portion of inventories costed using the LIFO method was 50.9 % and 49.8 % of consolidated inventories as of December 31, 2023, and 2022,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

respectively.

If inventories that were valued using the LIFO method had been valued under the FIFO method, they would have been higher by $ 28.4 million and $ 24.0 million as of December 31, 2023 and 2022, respectively.

The reserve for excess and obsolete inventory was $ 76.6 million and $ 70.3 million as of December 31, 2023, and 2022, respectively.

Valuation of Long-Lived Assets.

We review our long-lived assets for impairment whenever events or changes

in circumstances indicate the carrying amount of an asset may not be recoverable.

Examples of events or changes in circumstances could include, but are not limited to, a prolonged economic downturn, current period operating or cash flow losses

combined with a history of losses or a forecast of continuing losses associated with the use of an asset or asset group, or a current expectation that an asset or asset group will be sold or disposed of before the end of its previously estimated

We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Examples of events or changes in circumstances could include, but are not limited to, a prolonged economic downturn, current period operating or cash flow losses combined with a history of losses or a forecast of continuing losses associated with the use of an asset or asset group, or a current expectation that an asset or asset group will be sold or disposed of before the end of its previously estimated useful life.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the long-lived asset (or asset group), as well as specific appraisal in certain instances.

occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups.

If the future undiscounted cash flows are less than the carrying value, then the long-lived

asset is considered impaired and a loss is recognized based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments which impact these assessments relate to the expected useful lives of long-lived assets and our

ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic

conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of long-lived assets, there is risk that the carrying value of our long-lived assets may require

adjustment in future periods.

Reviews occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups.

If the future undiscounted cash flows are less than the carrying value, then the long-lived asset is considered impaired and a loss is recognized based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments which impact these assessments relate to the expected useful lives of long-lived assets and our ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of long-lived assets, there is risk that the carrying value of our long-lived assets may require adjustment in future periods.

Property, Plant and Equipment, net.

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(in millions) December 31, 2023 2022

Land $ 47.1 $ 45.4

Buildings and improvements 175.3 167.2

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Property, plant and equipment, net $ 270.5 $ 248.3

Property, plant and equipment is stated at cost and depreciation is calculated by the straight-line method over the estimated useful

lives of the respective assets, which range from 10 to 25 years for buildings and improvements and three to 10 years for machinery and equipment.

Depreciation expense was $76.1 million, $75.1 million and $77.2 million for the years ended

December 31, 2022, 2021 and 2020, respectively.

Property, plant and equipment is stated at cost and depreciation is calculated by the straight-line method over the estimated useful lives of the respective assets, which range from 10 to 25 years for buildings and improvements and three to 10 years for machinery and equipment.

Depreciation expense was $ 33.0 million, $ 33.9 million and $ 31.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Goodwill and Other Intangible Assets.

Our business acquisitions have typically resulted in the

recognition of goodwill and other intangible assets.

We follow the provisions under ASC Topic 350, Intangibles Goodwill and Other (ASC 350) as it relates to the accounting for goodwill in the Consolidated Financial

These provisions require that we, on at least an annual basis, evaluate the fair value of the reporting units to which goodwill is assigned and attributed and compare that fair value to the carrying value of the reporting unit to

determine if an impairment has occurred.

Our business acquisitions have typically resulted in the recognition of goodwill and other intangible assets.

We follow the provisions under ASC Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”) as it relates to the accounting for goodwill in the Consolidated Financial Statements.

We perform our annual impairment testing during the fourth quarter.

Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a

potential impairment.

Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a potential impairment.

We believe that there have been no other events or circumstances which would more likely than not reduce the fair value of our reporting units below its carrying value.

A reporting unit is an operating segment unless discrete

financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a component), in which case the component would be the reporting unit.

As of December 31, 2022, we had six

reporting units.

A reporting unit is an operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a “component”), in which case the component would be the reporting unit.

As of December 31, 2023, we had four reporting units.

When performing our annual impairment assessment, we compare the fair value of each of our reporting units to our respective carrying value.

Goodwill is considered to be potentially impaired when the net book value of the reporting unit exceeds its estimated fair value.

Fair values are established primarily by discounting estimated future cash flows at an estimated cost of capital which

varies for each reporting unit and which, as of our most recent annual impairment assessment, ranged between 9.5% and 11.5% (a weighted average of 10.8%), reflecting the respective inherent business risk of each of the reporting units tested.

methodology for valuing our reporting units (commonly referred to as the Income Method) has not changed since the adoption of the provisions under ASC 350.

The determination of discounted cash flows is based on the businesses strategic plans

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and long-range planning forecasts, which change from year to year.

Fair values are established primarily by discounting estimated future cash flows at an estimated cost of capital which varies for each reporting unit and which, as of our most recent annual impairment assessment, ranged between 9.5 % and 10.0 % (a weighted average of 9.9 %), reflecting the respective inherent business risk of each of the reporting units tested.

This methodology for valuing our reporting units (commonly referred to as the Income Method) has not changed since the adoption of the provisions under ASC 350.

The determination of discounted cash flows is based on the businesses’ strategic plans and long-range planning forecasts, which change from year to year.

The revenue growth rates included in the forecasts represent best estimates based on current and forecasted market conditions.

Profit margin assumptions are projected by each reporting unit based on the current cost structure and anticipated net cost increases/reductions.

There are inherent uncertainties related to these assumptions, including changes in market conditions,

and management judgment is necessary in applying them to the analysis of goodwill impairment.

In addition to the foregoing, for each reporting unit, market multiples are used to corroborate discounted cash flow results where fair value is estimated

based on earnings multiples determined by available public information of comparable businesses.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of our reporting units, it is possible a material change

There are inherent uncertainties related to these assumptions, including changes in market conditions, and management judgment is necessary in applying them to the analysis of goodwill impairment.

In addition to the foregoing, for each reporting unit, market multiples are used to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

corroborate discounted cash flow results where fair value is estimated based on earnings multiples determined by available public information of comparable businesses.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of our reporting units, it is possible a material change could occur.

If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may then be determined to be overstated and a charge would need to be taken against net earnings.

No impairment

charges have been required during 2022, 2021 or 2020.

No impairment charges have been required during the years ended December 31, 2023, 2022 or 2021.

Changes to goodwill are as follows:

(in millions)

Merchandising

(in millions) Aerospace & Electronics Process Flow Technologies (a) (b)

Engineered Materials Total

Balance as of December 31, 2021 $ 202.5 $ 349.4 $ 171.3 $ 723.2

Adjustments to purchase price allocations

Disposal on sale of business — ( 22.3 ) — ( 22.3 )

Currency translation ( 0.2 ) ( 9.8 ) — ( 10.0 )

Balance as of December 31, 2022 $ 202.3 $ 317.3 $ 171.3 $ 690.9

Disposal on sale of business

Acquisition — 49.9 — 49.9

Currency translation 0.1 6.8 — 6.9

Balance as of December 31, 2023 $ 202.4 $ 374.0 $ 171.3 $ 747.7

For the year ended December 31, 2022, adjustments within the Process Flow Technologies segment of $22.3 million relate to the

disposition of the Crane Supply business.

For the year ended December 31, 2021, adjustments within the Process Flow Technologies segment of $0.1 million

represent the finalization of the purchase price allocation for the acquisition of CIRCOR International, Inc.s Instrumentation & Sampling Business (I&S).

(a) For the year ended December 31, 2023, adjustments within the Process Flow Technologies segment of $ 49.9 million relate to the acquisition of BAUM, see Note 2 for further information.

(b) For the year ended December 31, 2022, adjustments within the Process Flow Technologies segment of $ 22.3 million relate to the disposition of the Crane Supply business, see Note 1 for further information.

Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment.

carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value.

If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value.

Fair value is calculated using relief from royalty method.

We amortize the cost of definite-lived intangibles

over their estimated useful lives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to annual testing for impairment of indefinite-lived intangible assets, we review all of our definite-lived

intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Examples of events or changes in circumstances could include, but are not limited to, a prolonged economic

downturn, current period operating or cash flow losses combined with a history of losses or a forecast of continuing losses associated with the use of an asset or asset group, or a current expectation that an asset or asset group will be sold or

disposed of before the end of its previously estimated useful life.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the definite-lived intangible asset (or asset

group), as well as specific appraisal in certain instances.

Reviews occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups and include estimated

future revenues, gross profit margins, operating profit margins and capital expenditures which are based on the businesses strategic plans and long-range planning forecasts, which change from year to year.

The revenue growth rates included in

the forecasts represent our best estimates based on current and forecasted market conditions, and the profit margin assumptions are based on the current cost structure and anticipated net cost increases or reductions.

There are inherent

uncertainties related to these assumptions, including changes in market conditions, and managements judgment in applying them to the analysis.

If the future undiscounted cash flows are less than the carrying value, then the definite-lived

intangible asset is considered impaired and a charge would be taken against net earnings based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments that we make which impact these assessments relate to the expected

useful lives of definite-lived assets and its ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or

development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of definite-lived intangible assets,

there is risk that the carrying value of our definite-lived intangible assets may require adjustment in future periods.

We amortize the cost of definite-lived intangibles over their estimated useful lives.

In addition to annual testing for impairment of indefinite-lived intangible assets, we review all of our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the definite-lived intangible asset (or asset group), as well as specific appraisal in certain instances.

Reviews occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups and include estimated future revenues, gross profit margins, operating profit margins and capital expenditures which are based on the businesses’ strategic plans and long-range planning forecasts, which change from year to year.

The revenue growth rates included in the forecasts represent our best estimates based on current and forecasted market conditions, and the profit margin assumptions are based on the current cost structure and anticipated net cost increases or reductions.

There are inherent uncertainties related to these assumptions, including changes in market conditions, and management’s judgment in applying them to the analysis.

If the future undiscounted cash flows are less than the carrying value, then the definite-lived intangible asset is considered impaired and a charge would be taken against net earnings based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments that we make which impact these assessments relate to the expected useful lives of definite-lived assets and its ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of definite-lived intangible assets, there is risk that the carrying value of our definite-lived intangible assets may require adjustment in future periods.

Historical results to date have generally approximated expected cash flows for the identifiable cash flow generating level.

As of December 31, 2022, we had $416.6 million of net intangible assets, of which $67.3 million were intangibles with indefinite useful lives, consisting of trade

As of December 31, 2023, we had $ 87.9 million of net intangible assets, of which $ 22.1 million were intangibles with indefinite useful lives, consisting of trade names.

As of December 31, 2022, we had $ 71.7 million of net intangible assets, of which $ 21.8 million were intangibles with indefinite useful lives, consisting of trade names.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes to intangible assets are as follows:

1 unchanged sentence

Balance at beginning of period, net of accumulated amortization $ 71.7 $ 78.5 $ 86.9

Additions (a)

Amortization expense ( 6.3 ) ( 5.7 ) ( 7.4 )

1 unchanged sentence

Balance at end of period, net of accumulated amortization $ 87.9 $ 71.7 $ 78.5

For the year ended December 31, 2020, additions to intangible assets represent the preliminary purchase price allocation related to

the January 2020 acquisition of I&S.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(a) For the year ended December 31, 2023, additions of $ 21.1 million relate to the acquisition of BAUM, see Note 2 for further information.

A summary of intangible assets follows:

(in millions)

Weighted Average

Period of Finite

Lived Assets (in

December 31, 2022

December 31, 2021

(in millions) Weighted Average

Amortization Period of Finite Lived Assets (in years) December 31, 2023 December 31, 2022

Asset Accumulated

Amortization Net Gross

Asset Accumulated

Amortization Net

Intellectual property rights 18.4 $ 72.6 $ 45.4 $ 27.2 $ 70.0 $ 45.1 $ 24.9

Customer relationships and backlog 13.7 152.9 93.9 59.0 132.6 87.8 44.8

Drawings 40.0 11.1 10.8 0.3 11.1 10.7 0.4

Other 21.1 42.7 41.3 1.4 42.4 40.8 1.6

Total 16.6 $ 279.3 $ 191.4 $ 87.9 $ 256.1 $ 184.4 $ 71.7

Future amortization expense associated with intangibles is expected to be:

(in millions)

Year (in millions)

2029 and after $ 32.5

Accumulated Other Comprehensive Loss

tables below provide the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on the Consolidated Balance Sheets.

(in millions)

Defined Benefit

Pension and Other

Postretirement

Balance as of December 31, 2019

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net period other comprehensive (loss) income

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Other Comprehensive (Loss) Income

The tables below provide the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on the Consolidated Balance Sheets.

(in millions) Defined Benefit Pension and Other Postretirement Items Currency Translation Adjustment Total (a)

Balance as of December 31, 2020 $ ( 397.9 ) $ ( 68.5 ) $ ( 466.4 )

Other comprehensive (loss) income before reclassifications

Other comprehensive income (loss) before reclassifications 78.0 ( 69.8 ) 8.2

Amounts reclassified from accumulated other comprehensive loss 18.0 — 18.0

Net period other comprehensive (loss) income

Net period other comprehensive income (loss) 96.0 ( 69.8 ) 26.2

Balance as of December 31, 2021 ( 301.9 ) ( 138.3 ) ( 440.2 )

3 unchanged sentences

Balance as of December 31, 2022 ( 271.9 ) ( 231.4 ) ( 503.3 )

Other comprehensive (loss) income before reclassifications ( 1.6 ) 20.8 19.2

Amounts reclassified from accumulated other comprehensive loss 11.6 — 11.6

Net period other comprehensive income 10.0 20.8 30.8

Distribution of Crane NXT, Co.

( 8.9 ) 423.4 414.5

Balance as of December 31, 2023 $ ( 270.8 ) $ 212.8 $ ( 58.0 )

Net of tax benefit of $ 103.0 million , $ 106.6 million and $ 117.9 million for 2023, 2022, and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for

the years ended December 31, 2022, 2021 and 2020.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2023, 2022 and 2021.

Amortization of pension and postretirement components have been recorded within “Miscellaneous income, net” on the Consolidated Statements of Operations.

(in millions)

Amount Reclassified from Accumulated Other

Comprehensive Loss

(in millions) Amount Reclassified from Accumulated Other Comprehensive Loss

December 31, 2023 2022 2021

Amortization of pension items:

Prior service costs

Prior service costs (a)

$ 0.7 $ ( 0.1 ) $ ( 0.1 )

15.5 15.2 23.4

Amortization of postretirement items:

Prior service costs

Prior service costs (c)

( 0.3 ) ( 1.1 ) ( 1.1 )

Total before tax $ 15.6 $ 14.0 $ 22.2

Tax impact 4.0 3.5 4.2

Total reclassifications for the period $ 11.6 $ 10.5 $ 18.0

(a) Includes (charges) credits from discontinued operations of $ 0.0 million , $ 0.7 million and $ 0.7 million in 2023, 2022 and 2021, respectively.

(b) Includes net activity from discontinued operations of$ 0.0 million , $ 0.6 million and $ 1.5 million in 2023, 2022 and 2021, respectively.

(c) Includes charges from discontinued operations of $ 0.3 million, $ 1.1 million and $ 1.1 million in 2023, 2022 and 2021, respectively.

(d) Includes net activity from discontinued operations of $ 0.1 million in 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

The Company considered the applicability and impact of all Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to

be either not applicable or are not expected to have a material impact on the Companys Consolidated Statement of Operations, Balance Sheets and Cash Flows.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amended guidance is required to be applied on a retrospective basis to all periods presented.

We are currently evaluating this guidance to determine the impact on our disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

The amendments in this Update require that public business entities disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate).

The amendments in this Update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments in this Update should be applied on a prospective basis.

We are currently evaluating this guidance to determine the impact on our disclosures.

The Company considered the applicability and impact of all other Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the Company's Consolidated Statement of Operations, Balance Sheets and Cash Flows.

Note 2 – Acquisitions

Acquisitions are accounted for in accordance with

ASC Topic 805, Business Combinations (ASC 805).

Accordingly, we make an initial allocation of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed

We obtain this information during due diligence and through other sources.

In the months after closing, as we obtain additional information about these assets and liabilities, including through tangible and intangible asset appraisals,

we are able to refine estimates of fair value and more accurately allocate the purchase price.

Only items identified as of the acquisition date are considered for subsequent adjustment to the purchase price allocation.

We will make appropriate

adjustments to the purchase price allocation prior to completion of the measurement period, as required.

In order to allocate the consideration transferred for our

acquisitions, the fair values of all identifiable assets and liabilities must be established.

For accounting and financial reporting purposes, fair value is defined under ASC Topic 820, Fair Value Measurement and Disclosure as the price

that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Market participants are assumed to be buyers and sellers in the principal (most

advantageous) market for the asset or liability.

Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants.

Use of different estimates and judgments could yield different results.

Instrumentation & Sampling Business Acquisition

January 31, 2020, we completed the acquisition of I&S for $172.3 million on a cash-free and debt-free basis, subject to a later adjustment reflecting I&S net working capital, cash, the assumption of certain debt-like items,

and I&S transaction expenses.

We funded the acquisition through short-term borrowings consisting of $100 million of commercial paper and $67 million from our revolving credit facility, and cash on hand.

In August 2020, we

received $3.1 million related to the final working capital adjustment which resulted in net cash paid of $169.2 million.

I&S designs, engineers and

manufactures a broad range of critical fluid control instrumentation and sampling solutions used in severe service environments which complements our existing portfolio of chemical, refining, petrochemical and upstream oil and gas applications.

I&S has been integrated into the Process Flow Technologies segment.

The amount allocated to goodwill reflects the expected sales synergies, manufacturing efficiency and procurement savings.

Goodwill from this acquisition is not deductible for

tax purposes.

Allocation of Consideration Transferred to Net Assets Acquired

The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S.

value of certain assets and liabilities has been completed as required by ASC 805.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On October 4, 2023, the Company completed the acquisition of Baum lined piping GmbH (“BAUM”) for $ 93.5 million on a cash-free and debt-free basis, with $ 90.5 million paid in 2023 and $ 3.0 million to be paid in 2024, related to the final working capital adjustment.

BAUM, is a German-based company that designs, manufactures, and distributes lined piping products primarily focused on chemical and industrial end markets.

BAUM has been integrated into the Process Flow Technologies segment.

The amount allocated to goodwill reflects the expected cost synergies.

Goodwill from this acquisition is not deductible for tax purposes.

The allocation of consideration transferred to net assets acquired is as follows:

Net assets acquired (in millions)

1 unchanged sentence

Property, plant and equipment 18.0

Other assets 9.5

Intangible assets 21.1

Goodwill 49.9

Total assets acquired $ 123.2

3 unchanged sentences

Net assets acquired $ 93.5

The amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on

the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:

Intangible Assets (dollars in millions)

Trademarks/trade names

Intangible Fair Value Weighted Average Life

Trade names $ 2.1 16.0

Customer relationships 17.9 12.0

Backlog 1.1 1.0

Total acquired intangible assets $ 21.1

The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the

relief-from-royalty approach, which is a commonly accepted valuation approach.

The fair values of the trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach.

This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset.

Therefore, a portion of I&S earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership.

The trade names are being amortized on a straight-line basis (which approximates

the economic pattern of benefits) over the estimated economic life of 13 years.

The fair values of the customer relationships and backlog intangible assets were

determined by using an income approach which is a commonly accepted valuation approach.

Therefore, a portion of BAUM’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership.

The trade names are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 16 years.

The fair values of the customer relationships and backlog intangible assets were determined by using an income approach which is a commonly accepted valuation approach.

Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows.

projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured.

Both the amount and the duration of the cash flows are considered from

a market participant perspective.

Our estimates of market participant net cash flows considered historical and projected pricing, operational performance including market participant synergies, aftermarket retention, product life cycles, material

and labor pricing, and other relevant customer, contractual and market factors.

Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are expected to decline

These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured.

Both the amount and the duration of the cash flows are considered from a market participant perspective.

Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are expected to decline over time.

The attrition-adjusted future cash flows are then discounted to present value using an appropriate discount rate.

The customer relationship asset is being amortized on a straight-line basis (which approximates the economic pattern of

benefits) over the estimated economic life of 14 years.

The customer relationship asset is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 12 years.

Supplemental Pro Forma Data

I&S results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 31,

Consolidated pro forma revenue and net income attributable to common shareholders has not been presented since the impact is not material to our financial results for the period.

BAUM’s results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on October 4, 2023.

Consolidated pro forma revenue and net income attributable to common shareholders have not been presented since the impact is not material to our financial results for the period.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Acquisition-Related Costs

Acquisition-related costs are being expensed as incurred.

For the year ended December 31, 2020, we recorded $12.9 million of integration and transaction costs.

Acquisition-related costs are recorded within Acquisition-related and integration charges in our Consolidated Statements of Operations.

Note 3 - Discontinued Operations

As discussed in Note 1, Crane Company has reflected the historical consolidated financial statements of Crane Holdings, Co.

with the Payment & Merchandising Technologies segment and other distributed assets and liabilities classified as discontinued operations.

Financial results from discontinued operations:

For the year ended December 31,

(in millions) 2023 2022 2021

Net sales $ 329.1 $ 1,339.9 $ 1,345.1

Cost of sales 174.4 713.7 746.2

Selling, general and administrative 80.0 294.6 291.4

Operating profit 74.7 331.6 307.5

Other expense, net ( 11.2 ) ( 40.0 ) ( 38.4 )

Income from discontinued operations 63.5 291.6 269.1

Income tax provision 11.4 62.1 31.1

Income from discontinued operations, net of tax $ 52.1 $ 229.5 $ 238.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The major categories of assets and liabilities included in assets of discontinued operations and liabilities of discontinued operations are as follows:

(in millions) December 31, 2022

Cash and Cash Equivalents $ 230.6

Accounts receivable, net 205.0

Inventories, net 145.6

Other current assets 44.7

Current assets of discontinued operations 625.9

Property, plant and equipment, net 261.6

Long-term deferred tax asset 5.1

Other assets 56.7

Intangible assets, net 344.9

Goodwill 836.6

Long-term assets of discontinued operations 1,504.9

Assets of discontinued operations $ 2,130.8

Short term borrowings $ 299.7

Accounts payable 107.4

Accrued liabilities 203.7

and foreign taxes on income 3.9

Current liabilities of discontinued operations 614.7

Long-term debt 545.1

Accrued pension and postretirement benefits 21.1

Long-term deferred tax liability 107.1

Other liabilities 53.6

Long-term liabilities of discontinued operations 726.9

Liabilities of discontinued operations $ 1,341.6

Note 4 – Segment Information

In accordance with ASC Topic 280, Segment Reporting, for purposes of segment performance measurement, we do not allocate to the business segments items that

are of a non-operating nature, including charges which occur from time to time related to our asbestos liability and our legacy environmental liabilities, as such items are not related to current business activities;

or corporate organizational and

functional expenses of a governance nature.

Corporate expenses-before asbestos and environmental charges consist of corporate office expenses including, compensation, benefits, occupancy, depreciation, and other administrative costs.

Assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, deferred tax assets, insurance receivables, certain property, plant and equipment, and certain other assets.

In accordance with ASC Topic 280, “Segment Reporting,” for purposes of segment performance measurement, we do not allocate to the business segments items that are of a non-operating nature, including charges which occur from time to time related to our legacy environmental liabilities, as such liabilities are not related to current business activities;

or corporate organizational and functional expenses of a governance nature.

“Corporate expenses-before environmental charges” consist of corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs.

Assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, deferred tax assets, certain property, plant and equipment, and certain other assets.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

We account for intersegment sales and

transfers as if the sales or transfers were to third parties at current market prices.

Our segments are reported on the same basis used internally for evaluating

performance and for allocating resources.

We currently have four reporting segments:

Process Flow Technologies, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials.

We account for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

Our segments are reported on the same basis used internally for evaluating performance and for allocating resources.

We currently have three reporting segments:

Aerospace & Electronics, Process Flow Technologies, and Engineered Materials.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A brief description of each of our current segments is as follows:

Aerospace & Electronics

The Aerospace & Electronics

segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace, and the military aerospace, defense and space markets.

Its brands have decades of proven experience, and in

many cases invented the critical technologies in their respective markets.

The Aerospace & Electronics segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace, and the military aerospace, defense and space markets.

Its brands have decades of proven experience, and in many cases invented the critical technologies in their respective markets.

The business designs and delivers proven systems, reliable components, and flexible power solutions that excel in tough and mission-critical environments.

services are organized into six integrated solutions:

Products and services are organized into six integrated solutions:

Sensing Components & Systems, Electrical Power Solutions, Fluid Management Solutions, Landing & Control Systems, and Microwave Solutions.

Process Flow Technologies

The Process Flow Technologies segment is a

provider of highly engineered fluid handling equipment for mission critical applications that require high reliability.

The Process Flow Technologies segment is a provider of highly engineered fluid handling equipment for mission critical applications that require high reliability.

The segment is comprised of Process Valves and Related Products, Commercial Valves, and Pumps and Systems.

Process Valves and

Related Products include on/off valves and related products for critical and demanding applications in the chemical, oil & gas, power, and general industrial end markets globally.

Commercial Valves includes the manufacturing and

distribution of valves and related products for the non-residential construction, general industrial, and to a lesser extent, municipal markets.

Pumps and Systems include pumps and related products primarily for water and wastewater applications in

the industrial, municipal, commercial and military markets.

Payment & Merchandising Technologies

The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (CPI) and Crane Currency.

CPI provides electronic equipment

and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions.

CPI also provides advanced automation

solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions.

Crane Currency provides advance security solutions based on proprietary micro-optic technology for the global banknote industry.

Process Valves and Related Products include on/off valves and related products for critical and demanding applications in the chemical, oil & gas, power, and general industrial end markets globally.

Commercial Valves includes the manufacturing and distribution of valves and related products for the non-residential construction, general industrial, and to a lesser extent, municipal markets.

Pumps and Systems include pumps and related products primarily for water and wastewater applications in the industrial, municipal, commercial and military markets.

Engineered Materials

The Engineered Materials segment manufactures

fiberglass-reinforced plastic (FRP) panels and coils, primarily for use in the manufacturing of recreational vehicles (RVs), truck bodies and trailers (Transportation), with additional applications in commercial and

industrial buildings (Building Products).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Engineered Materials segment manufactures fiberglass-reinforced plastic ("FRP") panels and coils, primarily for use in the manufacturing of recreational vehicles ("RVs"), truck bodies and trailers (Transportation), with additional applications in commercial and industrial buildings (Building Products).

Financial information by reportable segment is set forth below:

2 unchanged sentences

Process Flow Technologies 1,072.8 1,109.4 1,196.6

Payment & Merchandising Technologies

Engineered Materials 224.3 258.3 228.0

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Process Flow Technologies 208.5 168.2 182.5

Payment & Merchandising Technologies

Engineered Materials 33.4 32.6 26.9

Corporate ( 117.1 ) ( 283.2 ) ( 97.7 )

TOTAL OPERATING PROFIT (a)

$ 283.8 $ 37.9 $ 221.7

Capital expenditures:

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Process Flow Technologies 29.1 23.9 18.8

Payment & Merchandising Technologies

Engineered Materials 3.7 3.8 2.2

Corporate 0.2 0.1 0.2

TOTAL CAPITAL EXPENDITURES $ 42.7 $ 37.1 $ 35.3

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Process Flow Technologies 21.4 19.5 22.0

Payment & Merchandising Technologies

Engineered Materials 3.9 5.8 1.6

Corporate 0.1 0.1 0.1

TOTAL DEPRECIATION AND AMORTIZATION $ 39.3 $ 39.5 $ 38.4

For the year ended December 31, 2022, operating profit includes a loss on divestiture of asbestos-related assets and

liabilities of $162.4 million and net restructuring charges of $10.4 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2023, operating profit includes $ 0.6 million restructuring charges.

For the year ended December 31, 2022, operating profit includes a loss on divestiture of asbestos-related assets and liabilities of $ 162.4 million and net restructuring charges of $ 4.2 million.

For the year ended December 31, 2021, operating profit included a restructuring gain of $ 13.2 million.

For the year ended December 31, 2020, operating profit

included acquisition-related and integration charges of $12.9 million and net restructuring charges of $32.3 million.

See Note 15, Restructuring Charges for discussion of the restructuring charges.

See Note 16, “Restructuring Charges” for additional details.

Net sales by geographic region:

2 unchanged sentences

United States $ 1,260.7 $ 1,175.5 $ 1,074.4

Canada 74.3 171.4 286.0

United Kingdom 120.3 105.4 110.0

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Net sales by geographic region are based on the destination of the sale.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance sheet items by reportable segment is set forth below:

2 unchanged sentences

Process Flow Technologies 374.0 317.3

Payment & Merchandising Technologies

Engineered Materials 171.3 171.3

2 unchanged sentences

Process Flow Technologies 1,164.5 1,064.7

Payment & Merchandising Technologies

Engineered Materials 191.8 218.6

Corporate 232.7 314.2

Assets Discontinued Operations — 2,130.8

TOTAL ASSETS $ 2,333.6 $ 4,391.6

Long-lived assets by geographic region:

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United States $ 174.7 $ 171.6

Europe 98.1 70.5

Other international 49.6 53.0

Corporate 12.1 11.6

TOTAL LONG-LIVED ASSETS $ 334.5 $ 306.7

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Disaggregation of Revenues

The following table presents net sales

disaggregated by product line for each segment:

The following table presents net sales disaggregated by product line for each segment:

(in millions) December 31, 2023 2022 2021

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Total Process Flow Technologies $ 1,072.8 $ 1,109.4 $ 1,196.6

Payment & Merchandising Technologies

Payment Acceptance and Dispensing Products

Banknotes and Security Products

Total Payment & Merchandising Technologies

Engineered Materials

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Remaining Performance Obligations

transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled, which we also refer to as total backlog.

The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled, which we also refer to as total backlog.

As of December 31, 2023, backlog was $ 1,091.2 million.

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Contract Assets and Contract Liabilities

Contract assets represent unbilled

amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method

exceeds the amount billed to the customer.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

Contract liabilities represent advance payments from customers.

Revenue related to contract liabilities is recognized

when control is transferred to the customer.

We report contract assets, which are included within Other current assets in our Consolidated Balance Sheets, and contract liabilities, which are included within Accrued

liabilities on our Consolidated Balance Sheets, on a contract-by-contract net basis at the end of each reporting period.

Revenue related to contract liabilities is recognized when control is transferred to the customer.

We report contract assets, which are included within “Other current assets” in our Consolidated Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” on our Consolidated Balance Sheets, on a contract-by-contract net basis at the end of each reporting period.

Net contract assets and contract liabilities consisted of the following:

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Note 6 – Research and Development

Research and development costs are expensed when incurred and are included in Selling, general and administrative in our Consolidated Statements of

Research and development costs are expensed when incurred and are included in “Selling, general and administrative” in our Consolidated Statements of Operations.

(in millions) December 31, 2023 2022 2021

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Note 7 – Pension and Postretirement Benefits

In the United States, we sponsor a defined benefit pension plan

that covers approximately 12% of all U.S.

In the United States, we sponsor a defined benefit pension plan that covers approximately 18 % of all U.S.

Effective January 1, 2013, pension eligible non-union employees no longer earn future benefits in the domestic defined benefit pension plan.

The benefits are based on years of service and

compensation on a final average pay basis, except for certain hourly employees where benefits are fixed per year of service.

The benefits are based on years of service and compensation on a final average pay basis, except for certain hourly employees where benefits are fixed per year of service.

Charges to expense are based upon costs computed by an independent actuary.

Contributions are intended to provide for future

benefits earned to date.

Contributions are intended to provide for future benefits earned to date.

Additionally, a number of our non-U.S.

subsidiaries sponsor defined benefit pension plans that cover approximately 12% of all non-U.S.

subsidiaries sponsor defined benefit pension plans cover approximately 10 % of all non-U.S.

The benefits are typically based upon years of service and compensation.

of these plans are funded by company contributions to pension funds, which are held for the sole benefit of plan participants and beneficiaries.

In December 2022,

we settled the pension plan for the salaried non-bargaining employees of Crane Canada Co.

Most of these plans are funded by company contributions to pension funds, which are held for the sole benefit of plan participants and beneficiaries.

In December 2022, we settled the pension plan for the salaried non-bargaining employees of Crane Canada Co.

and recognized a loss of $ 7.0 million, net of tax.

Excess plan assets have been reclassified to current receivables and will be recognized upon final

approval from regulatory authorities which is expected in 2023.

We estimate that the Company will receive a distribution of approximately $43 million after distributions to plan participants.

In August 2023, the Company received a distribution of $ 45.3 million after distributions to plan participants.

Postretirement Plans

Postretirement health care and life insurance benefits

are provided for certain employees hired before January 1, 1990, who meet minimum age and service requirements.

We also have postretirement medical and Medicare supplement that cover substantially all former full-time U.S.

employees of Crane

Postretirement health care and life insurance benefits are provided for certain employees hired before January 1, 1990, who meet minimum age and service requirements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the projected benefit obligations, fair value of plan assets and funded status is as follows:

Pension Benefits

Postretirement Benefits

Pension Benefits Postretirement Benefits

(in millions) December 31, 2023 2022 2023 2022

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Benefit obligation at beginning of year $ 722.1 $ 1,052.8 $ 3.2 $ 4.7

Service cost 3.3 3.4 — —

Interest cost 35.9 21.5 0.2 0.1

Plan participants contributions

Amendments 1.9 0.7 — —

Actuarial (gain) loss 28.8 ( 267.0 ) — ( 0.9 )

Settlements ( 0.1 ) ( 7.7 ) — —

Curtailments — ( 1.0 ) — —

Benefits paid ( 45.2 ) ( 45.8 ) ( 0.5 ) ( 0.7 )

Foreign currency exchange and other 11.6 ( 34.2 ) — —

Administrative expenses paid

Curtailment and settlement loss from discontinued operations 1.9 — — —

Administrative expenses paid and other ( 0.9 ) ( 0.6 ) 0.1 —

Benefit obligation at end of year $ 759.3 $ 722.1 $ 3.0 $ 3.2

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Employer contributions 18.1 17.8 0.5 0.7

Plan participants contributions

Settlements ( 0.1 ) ( 63.2 ) — —

Benefits paid ( 45.2 ) ( 45.8 ) ( 0.5 ) ( 0.7 )

3 unchanged sentences

Funded status $ ( 66.9 ) $ ( 87.6 ) $ ( 3.0 ) $ ( 3.2 )

In the U.S., 2022 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

In the U.S., 2023 actuarial losses in the projected benefit obligation were primarily the result of a decrease in the discount rate.

Other sources of gains or losses such as plan experience, updated census data and minor adjustments to actuarial assumptions generated combined losses of less than 1 % of expected year end obligations.

In the Non-U.S.

countries, 2022 actuarial gains

in the projected benefit obligation were primarily the result of increases in discount rates.

Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation, mortality table updates and minor adjustments

to other actuarial assumptions generated combined losses of approximately 3% of expected year end obligations.

In the U.S., 2021 actuarial gains in the projected

benefit obligation were primarily the result of an increase in the discount rate.

Other sources of gains or losses such as plan experience, updated census data and minor adjustments to actuarial assumptions generated combined losses of less than 1%

of expected year end obligations.

countries, 2023 actuarial losses in the projected benefit obligation were primarily the result of decrease in discount rates.

Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation, mortality table updates and minor adjustments to other actuarial assumptions generated combined losses of approximately 1 % of expected year end obligations.

In the U.S., 2022 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

In the Non-U.S.

countries, 2022 actuarial gains in the projected benefit obligation were primarily the result of increases in discount rates.

Other sources of gains or losses such as plan experience, updated census

data, changes to forecast inflation, mortality table updates and minor adjustments to other actuarial assumptions generated combined gains of 2% of expected year end obligations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts recognized on our Consolidated Balance Sheets consist of:

Pension Benefits

Postretirement Benefits

Pension Benefits Postretirement Benefits

(in millions) December 31, 2023 2022 2023 2022

Other assets $ 45.5 $ 41.8 $ — $ —

Current liabilities ( 1.4 ) ( 1.5 ) ( 0.4 ) ( 0.5 )

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Funded status $ ( 66.9 ) $ ( 87.6 ) $ ( 3.0 ) $ ( 3.2 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts recognized in accumulated other comprehensive loss consist of:

Pension Benefits

Postretirement Benefits

Pension Benefits Postretirement Benefits

(in millions) December 31, 2023 2022 2023 2022

Net actuarial loss (gain) $ 352.2 $ 367.0 $ ( 2.6 ) $ ( 8.4 )

Prior service credit

Prior service cost (credit) 6.9 ( 1.3 ) — ( 2.0 )

Total recognized in accumulated other comprehensive loss $ 359.1 $ 365.7 $ ( 2.6 ) $ ( 10.4 )

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the U.S.

plans, are as

plans, are as follows:

Pension Obligations/Assets

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Fair value of plan assets $ 440.3 $ 404.5

Components of net periodic (benefit) cost are as follows:

Pension Benefits

Postretirement Benefits

Components of net periodic cost (benefit) are as follows:

Pension Benefits Postretirement Benefits

(in millions) For the year ended December 31, 2023 2022 2021 2023 2022 2021

Net Periodic (Benefit) Cost:

Service cost $ 3.3 $ 3.4 $ 3.4 $ — $ — $ —

Interest cost 35.9 21.5 17.7 0.2 0.1 0.1

4 unchanged sentences

Settlement loss — 12.1 1.3 — — —

Net periodic (benefit) cost

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Curtailment and settlement loss from discontinued operations 1.9 — — — — —

Net periodic cost (benefit) $ 11.2 $ ( 2.3 ) $ ( 5.9 ) $ — $ 0.1 $ 0.1

The weighted average assumptions used to determine benefit obligations are as follows:

Pension Benefits

Postretirement Benefits

Pension Benefits Postretirement Benefits

For the year ended December 31, 2023 2022 2021 2023 2022 2021

Discount rate 5.07 % 5.43 % 2.89 % 5.00 % 5.40 % 2.70 %

Rate of compensation increase

Interest credit rate

Discount rate

Rate of compensation increase

Interest credit rate

Rate of compensation increase N/A N/A N/A N/A N/A N/A

Interest credit rate 4.02 % 3.62 % 1.47 % N/A N/A N/A

Discount rate 4.29 % 4.61 % 1.73 % N/A N/A N/A

Rate of compensation increase 3.69 % 3.72 % 3.30 % N/A N/A N/A

Interest credit rate N/A N/A N/A N/A N/A N/A

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted-average assumptions used to determine net periodic benefit cost are as follows:

Pension Benefits

Postretirement Benefits

Pension Benefits Postretirement Benefits

For the year ended December 31, 2023 2022 2021 2023 2022 2021

Discount rate 5.43 % 2.89 % 2.62 % 5.40 % 2.70 % 2.30 %

Expected rate of return on plan assets

Rate of compensation increase

Interest credit rate

Discount rate

Expected rate of return on plan assets

Rate of compensation increase

Interest credit rate

The long-term expected rate of return on plan assets assumptions were determined with input from independent investment consultants and

plan actuaries, utilizing asset pricing models and considering historical returns.

The discount rates used by us for valuing pension liabilities are based on a review of high-quality corporate bond yields with maturities approximating the remaining

life of the projected benefit obligations.

plan, the 6.50% expected rate of return on assets assumption for 2022 reflected a long-term target comprised

of an asset allocation range of 25%-75% equity securities, 15%-35% fixed income securities, 10%-35% alternative assets and 0%-10% cash and cash equivalents.

Expected rate of return on plan assets 8.25 % 6.50 % 6.50 % N/A N/A N/A

Rate of compensation increase N/A N/A N/A N/A N/A N/A

Interest credit rate 3.62 % 1.47 % 0.93 % N/A N/A N/A

Discount rate 4.61 % 1.73 % 1.17 % N/A N/A N/A

Expected rate of return on plan assets 5.91 % 4.85 % 4.85 % N/A N/A N/A

Rate of compensation increase 3.72 % 3.30 % 3.32 % N/A N/A N/A

Interest credit rate N/A N/A N/A N/A N/A N/A

The long-term expected rate of return on plan assets assumptions were determined with input from independent investment consultants and plan actuaries, utilizing asset pricing models and considering historical returns.

The discount rates used by us for valuing pension liabilities are based on a review of high-quality corporate bond yields with maturities approximating the remaining life of the projected benefit obligations.

plan, the 8.25 % expected rate of return on assets assumption for 2023 reflected a long-term target comprised of an asset allocation range of 25 %- 75 % equity securities, 15 %- 35 % fixed income securities, 10 %- 35 % alternative assets and 0 %- 10 % cash and cash equivalents.

As of December 31, 2023, the actual asset allocation for the U.S.

plan was 64.3% equity

securities, 22.1% fixed income securities, 11.4% alternative assets and 2.1% cash and cash equivalents.

plan was 50.0 % equity securities, 37.8 % fixed income securities, 10.8 % alternative assets and 1.4 % cash and cash equivalents.

During 2023, the pension committee voted to reduce the funded status risk by increasing the allocation to liability matching fixed income investments.

For the non-U.S.

plans, the 4.50% expected rate of return

on assets assumption for 2022 reflected a weighted average of the long-term asset allocation targets for our various non-U.S.

plans, the 5.91 % expected rate of return on assets assumption for 2023 reflected a weighted average of the long-term asset allocation targets for our various non-U.S.

As of December 31, 2023, the actual weighted average asset allocation for the non-U.S.

plans was 15.3% equity

securities, 33.2% fixed income securities, 45.4% alternative assets/other and 6.2% cash and cash equivalents.

The assumed health care cost trend rates are as

plans was 18.5 % equity securities, 44.2 % fixed income securities, 34.0 % alternative assets/other and 3.4 % cash and cash equivalents.

The assumed health care cost trend rates are as follows:

December 31, 2023 2022

Health care cost trend rate assumed for next year 7.25 % 7.00 %

2 unchanged sentences

Assumed health care cost trend rates have a significant effect on the amounts reported for our health care plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

plan target allocations and weighted-average asset allocations by asset category are as follows:

Actual Allocation

Our pension plan target allocations and weighted-average asset allocations by asset category are as follows:

Target Allocation Actual Allocation

Asset Category December 31, 2023 2022

4 unchanged sentences

Independent investment consultants are retained to assist in executing the plans’ investment strategies.

A number of factors are

evaluated in determining if an investment strategy will be implemented in our pension trusts.

A number of factors are evaluated in determining if an investment strategy will be implemented in our pension trusts.

These factors include, but are not limited to, investment style, investment risk, investment manager performance and costs.

We periodically review

investment managers and their performance in relation to our plans investment objectives.

The primary investment objective of our various pension trusts is

to maximize the value of plan assets, focusing on capital preservation, current income and long-term growth of capital and income.

The plans assets are typically invested in a broad range of equity securities, fixed income securities,

alternative assets and cash instruments.

Equity securities include investments in large, mid, and small-capitalization companies located in both developed

countries and emerging markets around the world.

Fixed income securities include government bonds of various countries, corporate bonds that are primarily investment-grade, and mortgage-backed securities.

Alternative assets include investments in

real estate and hedge funds employing a wide variety of strategies.

In 2021, equity securities included Crane Holdings, Co.

common stock, which represented 4%of plan assets as of December 31, 2021.

There were no holdings of Crane Holdings, Co.

common stock in 2022.

We periodically review investment managers and their performance in relation to our plans’ investment objectives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The primary investment objective of our various pension trusts is to maximize the value of plan assets, focusing on capital preservation, current income and long-term growth of capital and income.

The plans’ assets are typically invested in a broad range of equity securities, fixed income securities, alternative assets and cash instruments.

Equity securities include investments in large, mid, and small-capitalization companies located in both developed countries and emerging markets around the world.

Fixed income securities include government bonds of various countries, corporate bonds that are primarily investment-grade, and mortgage-backed securities.

Alternative assets include investments in real estate and hedge funds employing a wide variety of strategies.

The fair value of our pension plan assets as of December 31, 2023, by asset category, are as follows:

(in millions)

Expedient (a)

(in millions) Active

Level 1 Other

Level 2 Unobservable

Level 3 Net Asset Value ("NAV") Practical Expedient (a)

Cash Equivalents and Money Markets $ 14.6 $ — $ — $ — $ 14.6

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Actively Managed U.S.

Equities 35.0 — — — 35.0

Commingled and Mutual Funds

Equity Funds 115.1 — — — 115.1

Equity Funds 68.8 — — 47.1 115.9

Fixed Income, Government and Corporate 165.2 — — — 165.2

Registered Investment Company 22.8 — — — 22.8

Collective Trust

Fixed Income, Government and Corporate — — — 112.7 112.7

International Balanced Funds

Property Funds 24.6 — — — 24.6

4 unchanged sentences

Total Fair Value $ 446.1 $ 2.0 $ — $ 244.3 $ 692.4

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not

classified in the fair value hierarchy.

In 2022, the pension plans asset classified as Level 3 constitutes an insurance contract valued

annually on an actuarial basis.

(a) Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of our pension plan assets as of December 31, 2022, by asset category, are as follows:

(in millions)

Expedient (a)

(in millions) Active

Level 1 Other

Level 2 Unobservable

Level 3 Net Asset Value ("NAV") Practical Expedient (a)

Cash Equivalents and Money Markets $ 26.8 $ — $ — $ — $ 26.8

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Actively Managed U.S.

Equities 31.8 — — — 31.8

Commingled and Mutual Funds

Equity Funds 152.3 — — — 152.3

Equity Funds 74.3 — — 37.8 112.1

Fixed Income, Government and Corporate 88.9 — — — 88.9

Registered Investment Company 23.3 — — — 23.3

Collective Trust

Fixed Income, Government and Corporate — — — 82.3 82.3

6 unchanged sentences

Total Fair Value $ 419.1 $ 2.6 $ — $ 212.8 $ 634.5

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not

classified in the fair value hierarchy.

In 2021, the pension plans asset classified as Level 3 constitutes an insurance contract valued

annually on an actuarial basis.

We expect, based on current

actuarial calculations, to contribute cash of approximately $20.0 million to our defined benefit pension plans during 2023.

Cash contributions in subsequent years will depend on a number of factors including the investment performance of plan

(a) Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

We expect, based on current actuarial calculations, to contribute cash of approximately $ 17.9 million to our defined benefit pension plans during 2024.

Cash contributions in subsequent years will depend on a number of factors including the investment performance of plan assets.

Estimated Future Benefit Payments

The following benefit

payments, which reflect expected future service, as appropriate, are expected to be paid:

Estimated future payments (in millions)

Postretirement

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Estimated future payments (in millions) Pension

Benefits Postretirement Benefits

2024 $ 49.9 $ 0.4

2025 51.1 0.4

2026 51.3 0.4

2027 52.6 0.4

2028 53.6 0.3

2029 to 2033 253.6 1.1

Total payments $ 512.1 $ 3.0

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Executive Retirement Plan

We also have a non-qualified Supplemental Executive Retirement Plan (SERP).

The SERP, which is not funded, is intended to provide retirement

benefits for certain executive officers who were formerly employees of Crane Currency.

Benefit amounts are based upon years of service and compensation of the participating employees.

We recorded a pre-tax settlement loss of $0.1 million in

There were no pre-tax settlement gains or losses recorded in 2021.

Accrued SERP benefits, which were recorded in Accrued liabilities and Accrued pension and postretirement benefits in the Consolidated Balance Sheets, were $2.2 million and

$3.7 million as of December 31, 2022 and 2021, respectively.

Employer contributions made to the SERP, which were recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations, were $1.0 million, $0.2

million and $0.2 million in 2022, 2021 and 2020, respectively.

Defined Contribution Plans

We sponsor savings and investment plans that are available to our eligible employees including employees of our subsidiaries.

We made contributions to the plans of $13.1

million, $12.0 million and $11.8 million in 2022, 2021 and 2020, respectively.

In addition to participant deferral contributions and company matching contributions

on those deferrals, we provide a 3% non-matching contribution to eligible participants.

We made contributions to the plans of $ 9.2 million, $ 9.0 million and $ 8.0 million in 2023, 2022 and 2021, respectively.

In addition to participant deferral contributions and company matching contributions on those deferrals, we provide a 3 % non-matching contribution to eligible participants.

We made non-matching contributions to these plans of $ 10.8 million, $ 10.4 million and $ 9.7 million in 2023, 2022 and 2021, respectively.

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Note 8 – Stock-Based Compensation Plans

At December 31, 2022, we had stock-based compensation awards outstanding under the following shareholder-approved plans:

the 2013 Stock Incentive Plan (the

2013 Plan), 2018 Stock Incentive Plan (the 2018 Plan) and 2018 Amended and Restated Stock Incentive Plan (the 2018 Amended & Restated Plan), applicable to employees and non-employee directors.

The 2013 Plan was approved by the Board of Directors and stockholders at the annual meeting in 2013.

The 2013 Plan originally authorized the issuance of up to 9,500,000

shares of stock pursuant to awards under the plan.

In 2018, in view of the limited number of shares remaining available under the 2013 Plan, the Board of Directors and stockholders approved the adoption of the 2018 Plan which authorized the issuance

of up to 6,500,000 shares of Crane Holdings, Co.

In 2021, the Board of Directors and stockholders approved the adoption of the 2018 Amended and Restated Stock Incentive Plan which authorized the issuance of up to 4,710,000 shares of Crane

Holdings, Co.

No further awards will be made under the 2013 Plan or 2018 Plan.

The stock incentive plans are used to provide long-term incentive

compensation through stock options, restricted share units, performance-based restricted share units and deferred stock units.

At December 31, 2023, we had stock-based compensation awards outstanding under the Crane Company 2023 Stock Incentive Plan (the “2023 Plan”).

The 2023 Plan was approved by the Board of Directors of the Company (the “Board”) on February 27, 2023, and by Crane Holdings, Co.

as the sole shareholder of the Company on February 27, 2023.

The 2023 Plan authorized the issuance of up to 9,750,000 shares of stock pursuant to awards under the plan.

In accordance with the Employee Matters Agreement entered into between Crane Holdings, Co.

and Crane Company, as further described in Note 1, “Basis of Presentation,” previously outstanding equity compensation awards granted under the historical Crane Holdings, Co.

2018 Amended and Restated Stock Incentive Plans prior to the Separation and held by certain executives and employees of Crane Holdings, Co.

were adjusted to reflect the impact of the Separation on these awards.

To preserve the aggregate intrinsic value of these equity compensation awards, as measured immediately before and immediately after the Separation, each Crane Holdings, Co.

equity-based compensation award was adjusted using either the shareholder method or the replacement method.

Any stock-based compensation award held by an Executive Officer or Non-Employee Director was adjusted using the shareholder method, in which each Crane Holdings, Co.

equity compensation award outstanding prior to the Separation was adjusted into a Crane NXT, Co.

Equity Compensation Award under one of the continuing Crane Holdings, Co.

Stock Incentive Plans and a Crane Company equity compensation award under the Crane Company 2023 Stock Incentive Plan.

All other stock based compensation awards were adjusted using the replacement method in which each Crane Holdings, Co.

equity compensation award outstanding prior to the Separation was adjusted into either a Crane NXT, Co.

equity compensation award under one of the continuing Crane Holdings, Co.

Stock Incentive Plans or a Crane Company Equity Compensation Award under the Crane Company 2023 Stock Incentive Plan, based on whether the award holder is employed by Crane NXT, Co.

or Crane Company immediately after the Separation.

The stock incentive plans are used to provide long-term incentive compensation through stock options, restricted share units, performance-based restricted share units and deferred stock units.

Stock Options

Options are granted under the Stock Incentive Plan to officers and other key employees and directors at an exercise price equal to the closing price on the date of

Unless otherwise determined by the Compensation Committee which administers the plan, options become exercisable at a rate of 25% after the first year, 50% after the second year, 75% after the third year and 100% after the fourth year from

the date of grant.

Options are granted under the Stock Incentive Plan to officers and other key employees and directors at an exercise price equal to the closing price on the date of grant.

Unless otherwise determined by the Compensation Committee which administers the plan, options become exercisable at a rate of 25 % after the first year, 50 % after the second year, 75 % after the third year and 100 % after the fourth year from the date of grant.

All options granted to directors and options granted to officers and employees after 2014 expire 10 years after the date of grant.

the fair value of each grant using the Black-Scholes option pricing model.

We determine the fair value of each grant using the Black-Scholes option pricing model.

The weighted-average assumptions for grants made during the years ended December 31, 2023, 2022 and 2021 are as follows:

2023 2022 2021

Dividend yield 1.57 % 2.05 % 3.06 %

Volatility 32.33 % 33.96 % 36.28 %

Risk-free interest rate 3.67 % 1.92 % 0.50 %

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Expected dividend yield is based on our dividend rate.

Expected stock volatility was determined based upon the historical volatility for

the four-year period preceding the date of grant.

Expected stock volatility was determined based upon the historical volatility for the four-year period preceding the date of grant.

The risk-free interest rate was based on the yield curve in effect at the time the options were granted, using U.S.

constant maturities over the expected life of the option.

The expected lives of the

awards represent the period of time that options granted are expected to be outstanding.

Activity in our stock option plans for the year ended December 31,

2022 were as follows:

Option Activity

Exercise Price

The expected lives of the awards represent the period of time that options granted are expected to be outstanding.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Activity in our stock option plans for the year ended December 31, 2023, were as follows:

Option Activity Number of

(in 000’s) Weighted

Exercise Price Weighted

Options outstanding as of January 1, 2023 1,692 $ 77.19

Granted 158 119.71

Exercised ( 337 ) 72.69

Canceled ( 22 ) 69.02

Outstanding on Distribution Date before Equitable Adjustment 1,491 $ 82.84

Outstanding on Distribution Date after Equitable Adjustment 1,580 $ 59.90

Exercised ( 201 ) 53.93

Canceled ( 4 ) 41.32

Options outstanding as of December 31, 2023 1,375 $ 55.97 5.5

Options exercisable as of December 31, 2023 1,026 $ 52.21 4.7

Included in our share-based compensation was expense recognized for our stock option awards of $5.1 million, $6.2 million and

$6.6 million in 2022, 2021 and 2020, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted-average fair value of options granted during 2022, 2021 and 2020 was $32.51, $20.82 and $15.18,

respectively.

Included in our share-based compensation was expense recognized for our stock option awards of $ 4.5 million, $ 5.1 million and $ 6.2 million in 2023, 2022 and 2021, respectively.

These amounts include expense related to discontinued operations of $ 0.2 million, $ 0.5 million and $ 0.5 million in 2023, 2022 and 2021, respectively.

The weighted-average fair value of options granted during 2023, 2022 and 2021 was $ 42.47 , $ 32.51 and $ 20.82 , respectively.

The total fair value of shares vested during 2023, 2022 and 2021 was $ 5.7 million, $ 5.6 million and $ 6.3 million, respectively.

total intrinsic value of options exercised during 2022, 2021 and 2020 was $11.8 million, $36.4 million and $4.1 million, respectively.

The aggregate intrinsic value of exercisable options was $26.5 million, $33.9 million and

$29.5 million as of December 31, 2022, 2021 and 2020, respectively.

The total cash received from these option exercises during 2022, 2021 and 2020 was

$22.8 million, $26.4 million and $8.9 million, respectively.

The tax benefit realized for the tax deductions from these option exercises was $1.8 million, $5.5 million and $0.5 million as of December 31, 2022, 2021

and 2020, respectively.

As of December 31, 2022, there was $6.1 million of total future compensation cost related to unvested share-based awards to

be recognized over a weighted-average period of 1.25 years.

The total intrinsic value of options exercised during 2023, 2022 and 2021 was $ 24.3 million, $ 11.8 million and $ 36.4 million, respectively.

The aggregate intrinsic value of exercisable options was $ 67.7 million, $ 26.5 million and $ 33.9 million

as of December 31, 2023, 2022 and 2021, respectively.

The total proceeds received from these option exercises during 2023, 2022 and 2021 were $ 30.3 million, $ 22.8 million and $ 26.4 million, respectively.

The tax benefit realized for the tax deductions from these option exercises was $ 5.0 million, $ 1.8 million and $ 5.5 million as of December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 3.2 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 1.28 years.

Restricted Share Units and Performance-Based Restricted Share Units

Restricted share units vest at a rate of 25% after the first year, 50% after the second year, 75% after the third year and 100% after the fourth year from the date of

grant and are subject to forfeiture restrictions which lapse over time.

The vesting of performance-based restricted share units is determined in three years based on relative total shareholder return for Crane Holdings, Co.

compared to the S&P

Midcap 400 Capital Goods Group, with payout potential ranging from 0% to 200% but capped at 100% if our three year total shareholder return is negative.

in our share-based compensation was expense recognized for our restricted share unit and performance-based restricted share unit awards of $19.1 million, $18.7 million and $15.7 million in 2022, 2021 and 2020, respectively.

The tax benefit

(detriment) for the vesting of the restricted share units was $1.2 million, $(0.1) million and $(0.1) million as of December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was $30.3 million of total future compensation cost related to restricted share unit and performance-based restricted

share unit awards, to be recognized over a weighted-average period of 1.94 years.

Changes in our restricted share units for the year ended December 31,

2022 were as follows:

Restricted Share Unit Activity

Restricted share units vest at a rate of 25 % after the first year, 50 % after the second year, 75 % after the third year and 100 % after the fourth year from the date of grant and are subject to forfeiture restrictions which lapse over time.

The vesting of performance-based restricted share units is determined in three years based on relative total shareholder return for Crane Company compared to the S&P Midcap 400 Capital Goods Group, with payout potential ranging from 0 % to 200 % but capped at 100 % if our three-year total shareholder return is negative.

Included in our share-based compensation was expense recognized for our restricted share unit and performance-based restricted share unit awards of $ 14.5 million, $ 19.1 million and $ 18.7 million in 2023, 2022 and 2021, respectively.

These amounts include expense related to discontinued operations of $ 0.6 million, $ 2.4 million and $ 2.7 million in 2023, 2022 and 2021, respectively.

The tax benefit (detriment) for the vesting of the restricted share units was $ 2.0 million, $ 1.2 million and $( 0.1 ) million as of December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 18.3 million of total future compensation cost related to restricted share unit and performance-based restricted share unit awards, to be recognized over a weighted-average period of 1.66 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in our restricted share units for the year ended December 31, 2023, were as follows:

Restricted Share Unit Activity Restricted

(in 000’s) Weighted

Restricted share units as of January 1, 2023 529 $ 92.96

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Performance-based restricted share units granted 54 141.55

Performance-based restricted share units vested

Performance-based restricted share units forfeited ( 2 ) 97.31

Outstanding on Distribution Date before Equitable Adjustment 590 $ 104.77

Outstanding on Distribution Date after Equitable Adjustment 572 $ 66.79

Restricted share units granted 21 74.66

Restricted share units vested ( 22 ) 73.96

Restricted share units forfeited ( 8 ) 71.29

Performance-based restricted share units granted 4 57.13

Performance-based restricted share units vested ( 111 ) 48.38

Restricted share units as of December 31, 2023 456 $ 71.14

Liability Performance-Based Restricted Share Units

As a result of Separation, certain executives hold performance-based restricted share units (“PRSUs”) that have undergone an equity-to-liability modification and are denominated in Crane NXT, Co.

As the PRSUs vest based on the performance of Crane NXT, Co.’s stock, the PRSUs are classified as a liability.

The fair value of the PRSU liability was estimated based on a Monte Carlo simulation, which models multiple stock price paths of Crane NXT, Co.’s stock and that of its peer group to evaluate and determine its ultimate expected relative TSR.

The awards are fair valued throughout the vesting period via the Monte Carlo simulation.

During the year ended December 31, 2023, the Company recognized $ 7.9 million in share-based compensation expense related to the liability PRSUs.

As of December 31, 2023, the total liability related to these awards was $ 10.0 million and was included in other liabilities on our Consolidated Balance Sheets.

Note 9 - Leases

Arrangements that explicitly

or implicitly relate to property, plant and equipment are assessed at inception to determine if the arrangement is or contains a lease.

Generally, we enter into operating leases as the lessee and recognize right-of-use assets and lease liabilities

based on the present value of future lease payments over the lease term.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Arrangements that explicitly or implicitly relate to property, plant and equipment are assessed at inception to determine if the arrangement is or contains a lease.

Generally, we enter into operating leases as the lessee and recognize right-of-use assets and lease liabilities based on the present value of future lease payments over the lease term.

We lease certain vehicles, equipment, manufacturing facilities, and non-manufacturing facilities.

We have leases with

both lease components and non-lease components, such as common area maintenance, utilities, or other repairs and maintenance.

For all asset classes, we applied the practical expedient to account for each separate lease component and its associated

non-lease component(s) as a single lease component.

We identify variable lease payments, such as maintenance payments based on actual activities performed or costs

incurred, at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum.

Certain leases include

options to renew for an additional term or company-controlled options to terminate.

We have leases with both lease components and non-lease components, such as common area maintenance, utilities, or other repairs and maintenance.

For all asset classes, we applied the practical expedient to account for each separate lease component and its associated non-lease component(s) as a single lease component.

We identify variable lease payments, such as maintenance payments based on actual activities performed or costs incurred, at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum.

Certain leases include options to renew for an additional term or company-controlled options to terminate.

We generally determine it is not reasonably certain to assume the exercise of renewal options because there is no economic incentive to renew.

As termination options

often include penalties, we generally determine it is reasonably certain that termination options will not be exercised because there is an economic incentive not to terminate.

Therefore, these options generally do not impact the lease term or the

determination or classification of the right-of-use asset and lease liability.

In the third quarter of 2017, we entered a seven-year lease for a used airplane

which includes a maximum residual value guarantee of $11.1 million if the fair value of the airplane is less than $14.4 million at the end of the lease term.

As termination options often include penalties, we generally determine it is reasonably certain that termination options will not be exercised because there is an economic incentive not to terminate.

Therefore, these options generally do not impact the lease term or the determination or classification of the right-of-use asset and lease liability.

In the first quarter of 2023, we entered a five-year lease for a used airplane which includes a maximum residual value guarantee of $ 5.1 million in the event the aircraft is sold for less than the purchase price option of $ 10.6 million.

We do not believe it is probable that any amount will be owed under this guarantee.

Therefore, no amount related to the residual value guarantee is included in the lease payments used to measure the right-of-use asset and lease liability.

We have not entered any other leases where a residual value guarantee is provided to the

We do not enter arrangements where restrictions or covenants are imposed by the lessor that, for example, relate to incurring additional financial

Therefore, no amount related to the residual value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

guarantee is included in the lease payments used to measure the right-of-use asset and lease liability.

We have not entered any other leases where a residual value guarantee is provided to the lessor.

We do not enter arrangements where restrictions or covenants are imposed by the lessor that, for example, relate to incurring additional financial obligations.

Furthermore, we also have not entered into any significant sublease arrangements.

We use our collateralized incremental borrowing

rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification.

The rate implicit in the lease is generally unknown, as we generally operate in the

capacity of the lessee.

We use our collateralized incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification.

The rate implicit in the lease is generally unknown, as we generally operate in the capacity of the lessee.

Our Consolidated Balance Sheet includes the following related to leases:

(in millions) December 31,

Classification

Operating right-of-use assets

Current lease liabilities

Accrued liabilities

Long-term lease liabilities

Other liabilities

(in millions) December 31, Classification 2023 2022

Operating right-of-use assets Other assets $ 64.0 $ 58.4

Current lease liabilities Accrued liabilities $ 10.8 $ 11.6

Long-term lease liabilities Other liabilities 56.3 49.7

Total lease liabilities $ 67.1 $ 61.3

5 unchanged sentences

The weighted average remaining lease terms and discount rates for our operating leases were as follows:

December 31, 2023 2022

Weighted-average remaining lease term - operating leases 7.6 7.7

Weighted-average discount rate - operating leases 4.2 % 3.4 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to our operating leases were as follows:

3 unchanged sentences

Future minimum operating lease payments are as follows:

(in millions)

(in millions) December 31, 2023

Thereafter 24.0

Total future minimum operating lease payments $ 81.2

6 unchanged sentences

(in millions) For year ended December 31, 2023 2022 2021

operations $ 155.4 $ ( 82.2 ) $ 201.1

operations 111.6 353.6 32.6

Total $ 267.0 $ 271.4 $ 233.7

Our provision (benefit) for income taxes consists of:

(in millions) For the year ended December 31, 2023 2022 2021

federal tax $ 43.0 $ 23.0 $ 20.1

state and local tax 5.6 1.1 ( 0.3 )

tax 36.1 74.9 21.5

Total current 84.7 99.0 41.2

federal tax ( 15.2 ) 22.7 ( 4.9 )

state and local tax ( 2.1 ) ( 10.3 ) ( 2.1 )

tax ( 4.2 ) ( 11.6 ) 2.1

Total deferred ( 21.5 ) 0.8 ( 4.9 )

Total provision for income taxes * $ 63.2 $ 99.8 $ 36.3

Included in the above amounts are excess tax benefits from share-based compensation of $3.0 million $5.5 million and $0.6

million in 2022, 2021 and 2020, respectively, which were reflected as reductions in our provision for income taxes in 2022, 2021 and 2020.

reconciliation of the statutory U.S.

* Included in the above amounts are excess tax benefits from share-based compensation of $ 6.0 million, $ 1.5 million and $ 3.7 million in 2023, 2022 and 2021, respectively, which were reflected as reductions in our provision for income taxes in 2023, 2022 and 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the statutory U.S.

federal tax rate to our effective tax rate is as follows:

4 unchanged sentences

Income taxed at non-U.S.

rates 3.1 % ( 3.6 ) % 6.1 %

income inclusion, net of tax credits ( 1.4 ) % 0.1 % 0.6 %

4 unchanged sentences

Nondeductible loss due to Asbestos Divestiture — % 14.3 % — %

Other 2.2 % 1.3 % ( 0.3 ) %

Effective tax rate 23.7 % 36.7 % 15.6 %

As of December 31, 2023, we have made the following determinations with regard to our non-U.S.

(in millions)

(in millions) Permanently reinvested Not permanently reinvested

Amount of earnings $ 202.1 $ 847.4

Associated tax

Associated tax NA * $ 11.1

* Determination of U.S.

income taxes and non-U.S.

withholding taxes due upon repatriation of this $425.5 million of

earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

withholding taxes due upon repatriation of this $ 202.1 million of earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs.

Tax Related to Comprehensive Income

During 2022, 2021 and 2020, tax provision (benefit) of $12.7 million, $29.9 million and $(13.5) million, respectively, related to changes in pension and post-retirement

plan assets and benefit obligations, were recorded to accumulated other comprehensive loss.

During 2023, 2022 and 2021, tax provision of $ 3.2 million, $ 9.1 million and $ 26.7 million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other comprehensive loss.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Taxes and Valuation Allowances

2 unchanged sentences

Deferred tax assets:

Asbestos-related liabilities

Tax loss and credit carryforwards $ 50.9 $ 51.0

Deferred tax asset related to the sale of a subsidiary

Inventories 23.4 21.6

Capitalized Research and Development 22.8 10.2

1 unchanged sentence

Accrued Bonuses and Stock Based Compensation 6.6 8.3

Other 13.7 13.5

Total $ 128.6 $ 110.7

valuation allowance 51.8 52.7

14 unchanged sentences

state and non-U.S.

tax loss and credit carryforwards that will expire, if

unused, as follows:

tax loss and credit carryforwards that will expire, if unused, as follows:

(in millions)

Year of expiration

Year of expiration U.S.

Losses Non- U.S.

2024-2028 $ — $ — $ 1.2 $ 56.8 $ 0.3

After 2028 1.0 — 0.6 155.8 0.7

Indefinite — — 21.3 58.3 79.0

Total tax carryforwards $ 1.0 $ — $ 23.1 $ 270.9 $ 80.0

2 unchanged sentences

Net deferred tax asset on tax carryforwards $ — $ — $ 0.2 $ — $ — $ 0.2

As of December 31, 2022 and 2021, we determined that it was more likely than not that $91.4 million and $106.4 million,

respectively, of our deferred tax assets related to tax loss and credit carryforwards will not be realized.

As of December 31, 2023, and 2022, we determined that it was more likely than not that $ 50.7 million and $ 50.6 million, respectively, of our deferred tax assets related to tax loss and credit carryforwards will not be realized.

As a result, we recorded a valuation allowance against these deferred tax assets.

We also determined that it is more likely than not that a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

portion of the benefit related to U.S.

We also determined that it is more likely than not that a portion of the benefit related to U.S.

state and non-U.S.

deferred tax assets other than tax loss and credit carryforwards will not be realized.

Accordingly, as of December 31, 2022 and

2021, a valuation allowance of $8.3 million and $35.1 million, respectively, was established against these U.S.

Accordingly, as of December 31, 2023, and 2022, a valuation allowance of $ 1.1 million and $ 2.1 million, respectively, was established against these U.S.

state and non-U.S.

deferred tax assets.

Our total valuation allowance as of December 31, 2022 and 2021 was $99.7 million and $141.5

million, respectively.

Our total valuation allowance as of December 31, 2023, and 2022 was $ 51.8 million and $ 52.7 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unrecognized Tax Benefits

A reconciliation of

the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:

A reconciliation of the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:

(in millions) 2023 2022 2021

6 unchanged sentences

Balance of liability as of December 31, $ 7.9 $ 6.9 $ 7.0

As of December 31, 2022, 2021 and 2020, the amount of our unrecognized tax benefits that, if recognized, would affect our effective

tax rate was $30.3 million, $33.5 million and $32.6 million, respectively.

The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and

(2) interest expense, net of deferred taxes.

We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax

As of December 31, 2023, 2022 and 2021, the amount of our unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 9.3 million, $ 8.2 million and $ 8.3 million, respectively.

The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes and (3) unrecognized tax benefits whose reversals would be recorded to goodwill.

We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense.

During the years ended December 31, 2023, 2022 and 2021, we recognized interest and penalty (income)/ expense of $ 0.3 million, $( 0.1 ) million and $( 2.6 ) million, respectively, in our Consolidated Statements of Operations.

of December 31, 2022 and 2021, we had accrued $4.8 million and $4.9 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $7.5 million due to settlements of income tax

examinations, the expiration of statutes of limitations or other resolution of uncertainties.

However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax

expense or benefit in the period in which such matters are effectively settled.

As of December 31, 2023 and 2022, we had accrued $ 2.2 million and $ 1.9 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $ 0.3 million due to settlements of income tax examinations, the expiration of statutes of limitations or other resolution of uncertainties.

However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax expense or benefit in the period in which such matters are effectively settled.

Income Tax Examinations

Our income tax returns are subject to examination by the U.S.

Our income tax returns are generally subject to examination by the U.S.

federal, U.S.

1 unchanged sentence

tax authorities.

With few exceptions, the years for which we

filed returns that are open to examination are as follows:

Prior to the separation, Crane Company was included in Crane NXT Co.’s consolidated federal income tax group and consolidated tax return.

However, as a result of the separation, as described above in Note 1, Crane Company became an independent public company required to file its own corporate income tax returns.

Subject to certain limitations and conditions, we have agreed to indemnify Crane NXT Co., for certain pre-separation tax liabilities.

For these reasons, and with few exceptions, the years for which we filed returns that are open to examination are as follows:

Jurisdiction Year

state and local 2017 - 2022

Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2016 through 2019), Canada (2013

through 2018) and Luxembourg (2017 through 2018).

Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2016 through 2019), Canada (2013 through 2018) and Luxembourg (2017 through 2018).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Employee related expenses $ 115.3 $ 100.8

Warranty 4.1 3.0

Current lease liabilities 10.8 11.6

Contract liabilities 56.2 49.4

We accrue warranty liabilities when it is probable that a liability has been incurred and the amount of the loss can be reasonably

Warranty provision is included in Cost of sales in our Consolidated Statements of Operations.

Other 87.3 95.7

Total $ 273.7 $ 260.5

Note 12 – Other Liabilities

3 unchanged sentences

Long-term lease liabilities 56.3 49.7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other 36.4 17.9

Total $ 105.6 $ 85.2

Note 13 - Commitments and Contingencies

Asbestos Liability

On August 12, 2022, Crane Holdings, Co., Crane

Company, a wholly-owned subsidiary of Crane Holdings, Co., and Redco, then a wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related insurance assets, entered into the Redco Purchase Agreement with

Redco Buyer, an unrelated third party and long-term liability management company specializing in the acquisition and management of legacy corporate liabilities, whereby Crane Company transferred to Redco Buyer all of the issued and outstanding

shares of Redco.

In connection with the Redco Sale, Crane Holdings, Co., on behalf of Crane Company, contributed approximately $550 million in cash to Redco, which was funded by a combination of short-term borrowings and cash on hand.

Concurrent with the completion of the Redco Sale, Redco Buyer contributed $83 million in cash to Redco.

Pursuant to the terms of the Redco Purchase Agreement, Crane Company and Redco Buyer will each indemnify the other for breaches of

representations and warranties, breaches of covenants and obligations and certain liabilities, subject to the terms of the Redco Purchase Agreement.

While indemnification by each of Crane Company and Redco Buyer to the other party for breach of

representations and warranties is capped at $83 million, in each case, based on the terms and subject to certain limitations as set forth in the Redco Purchase Agreement, liability of each of Crane Company and Redco Buyer for breaches of

covenants and obligations and for indemnified liabilities is generally uncapped.

Such covenants and obligations include that Redco has agreed to indemnify Crane Company and its affiliates for all claims arising out of asbestos liabilities, and Crane

Company has agreed to indemnify Redco and its affiliates for all other historical liabilities of Redco, which include certain potential environmental liabilities.

Crane Holdings, Co.

has guaranteed the full payment and performance of Crane

Companys indemnification obligations under the Redco Purchase Agreement.

Upon consummation of the previously announced separation transaction pursuant to which, among other things, all outstanding shares of Crane Company will be distributed to

Crane Holdings, Co.s stockholders, Crane Holdings, Co.

will be released from its guarantee of Crane Companys indemnification obligations under the Redco Purchase Agreement.

As a result of the Redco Sale, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets of Redco have been removed from

Crane Holdings, Co.s consolidated balance sheets effective August 12, 2022 and the Company no longer has any obligation with respect to pending and future asbestos claims.

As such, Redco has been deconsolidated from our 2022 financial

results, as we no longer maintain control of the entity.

Therefore, for the year ended December 31, 2022, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets of Redco are no longer reported on

the consolidated balance sheet.

The Company recorded a loss on the divestiture of asbestos-related assets and liabilities of $162.4 million in the third quarter of 2022, including transaction expenses of $13.5 million.

The following is a summary of the loss on divestiture of asbestos-related assets and liabilities:

(in millions)

Current insurance receivable

Long-term insurance receivable

Deferred tax asset

Current asbestos liability

Long-term asbestos liability

Loss on divestiture of asbestos-related assets and liabilities, before transaction costs

Transaction costs

Loss on divestiture of asbestos-related assets and liabilities

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the years ended

December 31, 2022, 2021 and 2020 totaled $35.8 million, $55.2 million and $50.9 million, respectively.

Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the years ended

December 31, 2022, 2021 and 2020 totaled $29.3 million, $44.9 million and $31.1 million, respectively.

Detailed below are the comparable amounts for the periods indicated.

(in millions)

For the year ended December 31,

Settlement / indemnity costs incurred (a)

Defense costs incurred (a)

Total costs incurred

Settlement / indemnity payments

Defense payments

Insurance receipts

Pre-tax cash payments, net

Before insurance recoveries and tax effects.

Other Contingencies

Environmental Matters

For environmental matters, we record a liability for estimated remediation costs when it is probable that we will be responsible for such costs and they can be

reasonably estimated.

For environmental matters, we record a liability for estimated remediation costs when it is probable that we will be responsible for such costs and they can be reasonably estimated.

Generally, third party specialists assist in the estimation of remediation costs.

The environmental remediation liability as of December 31, 2022 is substantially related to the former manufacturing site in Goodyear,

Arizona (the Goodyear Site) discussed below.

On June 21, 2021, we completed the sale of substantially all of the property associated with what we have historically called the Goodyear Site for $8.7 million, retaining only a

small parcel on which our remediation and treatment systems are located.

The environmental remediation liability as of December 31, 2023 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.

On June 21, 2021, we completed the sale of substantially all of the property associated with what we have historically called the Goodyear Site for $ 8.7 million, retaining only a small parcel on which our remediation and treatment systems are located.

We will continue to be responsible for all remediation costs associated with the Goodyear Site.

Pursuant to the terms of the Redco Purchase Agreement (referenced above), Crane Company and Redco Buyer will each indemnify the other for breaches of representations

and warranties, breaches of covenants and obligations and certain liabilities, subject to the terms of the Redco Purchase Agreement.

Such covenants and obligations include that Crane Company has agreed to indemnify Redco and its affiliates for all

other historical liabilities of Redco, which include certain potential environmental liabilities.

On August 12, 2022, Crane Holdings, Co., Crane Company, a then wholly-owned subsidiary of Crane Holdings, Co., and Redco Corporation (f/k/a Crane Co., (“Redco”) a then wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related insurance assets, entered into a Stock Purchase Agreement (the “Redco Purchase Agreement”) with Spruce Lake Liability Management Holdco LLC (“Redco Buyer”), an unrelated third party long-term liability management company specializing in the acquisition and management of legacy corporate liabilities, whereby Crane Company transferred to Redco Buyer all of the issued and outstanding shares of Redco (the “Redco Sale”).

Pursuant to the terms of the Redco Purchase Agreement, Crane Company and Redco Buyer will each indemnify the other for breaches of representations and warranties, breaches of covenants and obligations and certain liabilities, subject to the terms of the Redco Purchase Agreement.

Such covenants and obligations include obligations of Crane Company to indemnify Redco and its affiliates for all other historical liabilities of Redco, which include certain potential environmental liabilities.

Crane Holdings, Co.

has guaranteed the full payment and performance of Crane Companys indemnification obligations under the Redco Purchase

Upon consummation of the previously announced separation transaction pursuant to which, among other things, all outstanding shares of Crane Company will be distributed to Crane Holdings, Co.s stockholders, Crane Holdings, Co.

be released from its guarantee of Crane Companys indemnification obligations under the Redco Purchase Agreement.

guaranteed the full payment and performance of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

On April 3, 2023, Crane Holdings, Co.

completed the Separation, pursuant to which, among other things, all outstanding shares of Crane Company were distributed to Crane Holdings, Co.’s stockholders.

Upon completion of the Separation, pursuant to the terms of the Redco Purchase Agreement, Crane Holdings, Co.

was released from its guarantee of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

Prior to the effective date of the Redco Sale, the U.S.

Department of Justice agreed that Crane Holdings, Co.

and ultimately Crane

Company following the above-referenced separation transaction, will be primarily liable for the Goodyear Site.

The New Jersey Department of Environmental Protection agreed to transfer the liability of the Roseland Site to Crane Holdings, Co., and a

further transfer of this environmental liability to Crane Company upon effectiveness of the separation transaction is expected.

and, following completion of the Separation, Crane Company will be primarily liable for the Goodyear Site.

The New Jersey Department of Environmental Protection agreed to transfer the liability of the Roseland Site to Crane Holdings, Co., and to further transfer this environmental liability to Crane Company upon effectiveness of the Separation.

The potential liability for the Crab Orchard Site referenced below remains a direct obligation of Redco.

As noted above,

however, Crane Company, and Crane Holdings, Co.

(as guarantor until the time of the separation transaction), have agreed to indemnify Redco Buyer against the Goodyear, Roseland, and Crab Orchard environmental liabilities.

Thus, references below to

we, and us refer to Crane Holdings, Co.

in its capacity as the primarily responsible party for the Goodyear and Roseland Sites, and as indemnitor to the Redco Buyer on the Crab Orchard Site.

As noted above, however, Crane Company has agreed to indemnify Redco and Redco Buyer against the Goodyear, Roseland, and Crab Orchard environmental liabilities.

Thus, references below in this Note 13 to “we”, and “us” refer to Crane Company in its capacity as the primarily responsible party for the Goodyear and Roseland Sites, and as indemnitor to the Redco Buyer on the Crab Orchard Site.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodyear Site

Site was operated by Unidynamics/Phoenix, Inc.

The Goodyear Site was operated by Unidynamics/Phoenix, Inc.

(“UPI”), which became an indirect subsidiary in 1985 when Crane Co.

(n/k/a Redco) acquired UPI’s parent company, UniDynamics Corporation.

UPI is now an indirect subsidiary of Crane

Holdings, Co.

and will become an indirect subsidiary of Crane Company following the separation transaction.

UPI was an indirect subsidiary of Crane Holdings, Co.

pre-Separation and became an indirect subsidiary of Crane Company following completion of the Separation.

UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S.

Government at the

Goodyear Site from 1962 to 1993, under contracts with the U.S.

Government at the Goodyear Site from 1962 to 1993, under contracts with the U.S.

Department of Defense and other government agencies and certain of their prime contractors.

In 1990, the U.S.

Environmental Protection Agency (EPA) issued administrative

orders requiring UPI to design and conduct certain remedial actions, which UPI has done.

Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and conduct certain remedial actions, which UPI has done.

Groundwater extraction and treatment systems have been in operation at the Goodyear Site since 1994.

On July 26, 2006, we entered a consent decree with the

EPA with respect to the Goodyear Site providing for, among other things, a work plan for further investigation and remediation activities (inclusive of a supplemental remediation investigation and feasibility study).

During the third quarter of

2014, the EPA issued a Record of Decision (ROD) amendment permitting, among other things, additional source area remediation resulting in us recording a charge of $49.0 million, extending the accrued costs through 2022.

the 2014 ROD amendment, we continued our remediation activities and explored an alternative strategy to accelerate remediation of the site.

During the fourth quarter of 2019, we received conceptual agreement from the EPA on our alternative

remediation strategy which is expected to further reduce the contaminant plume.

Accordingly, in 2019, we recorded a pre-tax charge of $18.9 million, net of reimbursements, to extend our forecast period through 2027 and reflect our revised

On July 26, 2006, we entered a consent decree with the EPA with respect to the Goodyear Site providing for, among other things, a work plan for further investigation and remediation activities (inclusive of a supplemental remediation investigation and feasibility study).

During the third quarter of 2014, the EPA issued a Record of Decision (“ROD”) amendment permitting, among other things, additional source area remediation resulting in us recording a charge of $ 49.0 million, extending the accrued costs through 2022.

Following the 2014 ROD amendment, we continued our remediation activities and explored an alternative strategy to accelerate remediation of the site.

During the fourth quarter of 2019, we received conceptual agreement from the EPA on our alternative remediation strategy which is expected to further reduce the contaminant plume.

Accordingly, in 2019, we recorded a pre-tax charge of $ 18.9 million, net of reimbursements, to extend our forecast period through 2027 and reflect our revised workplan.

The total estimated gross liability was $ 20.7 million and $ 24.8 million as of December 31, 2023 and 2022, respectively, and as described below, a portion is reimbursable by the U.S.

The current portion of the

total estimated liability was $7.7 million and $7.1 million as of December 31, 2022 and 2021, respectively, and represents our best estimate, in consultation with our technical advisors, of total remediation costs expected to be paid

during the twelve-month period.

It is not possible at this point to reasonably estimate the amount of any obligation in excess of our current accruals through the 2027 forecast period because of the

aforementioned uncertainties, in particular, the continued significant changes in the Goodyear Site conditions and additional expectations of remediation activities experienced in recent years.

The current portion of the total estimated liability was $ 7.8 million and $ 7.7 million as of December 31, 2023 and 2022, respectively, and represents our best estimate, in consultation with our technical advisors, of total remediation costs expected to be paid during the next twelve-month period.

It is not possible at this point to reasonably estimate the amount of any obligation in excess of our current accruals through the 2027 forecast period because of the aforementioned uncertainties, in particular, the continued significant changes in the Goodyear Site conditions and additional expectations of remediation activities experienced in recent years.

On July 31, 2006, we entered into a consent decree with the U.S.

Department of Justice on behalf of the Department of Defense and the Department of Energy pursuant

to which, among other things, the U.S.

Department of Justice on behalf of the Department of Defense and the Department of Energy pursuant to which, among other things, the U.S.

Government reimburses us for 21 % of qualifying costs of investigation and remediation activities at the Goodyear Site.

As of December 31, 2022 and 2021, we recorded a receivable of $4.8 million and

$7.3 million, respectively, for the expected reimbursements from the U.S.

As of December 31, 2023 and 2022, we recorded a receivable of $ 3.8 million and $ 4.8 million, respectively, for the expected reimbursements from the U.S.

Government in respect of the aggregate liability as at that date.

4 unchanged sentences

The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary in 1985 when Crane Co.

(n/k/a Redco) acquired

Resistoflexs parent company, UniDynamics Corporation.

(n/k/a Redco) acquired Resistoflex’s parent company, UniDynamics Corporation.

Resistoflex manufactured specialty lined pipe and fittings at the site from the 1950s until it was closed in the mid-1980s.

We undertook an extensive soil remediation effort at the Roseland

Site following our closure and had been monitoring the Sites condition in the years that followed.

We undertook an extensive soil remediation effort at the Roseland Site following our closure and had been monitoring the Site’s condition in the years that followed.

In response to changes in remediation standards, in 2014 we began to conduct further site characterization and delineation studies at the Site.

We are in the late stages of our remediation activities at the Site, which include a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air in certain buildings, all in accordance with the

New Jersey Department of Environmental Protection guidelines and directives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Marion, IL Site

(n/k/a Redco) has been identified as a potentially responsible party (PRP) with respect to environmental contamination at the Crab Orchard National

Wildlife Refuge Superfund Site (the Crab Orchard Site).

(n/k/a Redco) has been identified as a potentially responsible party (“PRP”) with respect to environmental contamination at the Crab Orchard National Wildlife Refuge Superfund Site (the “Crab Orchard Site”).

The Crab Orchard Site is located near Marion, Illinois, and consists of approximately 55,000 acres.

Beginning in 1941, the United States used the Crab Orchard Site for the

production of ordnance and other related products for use in World War II.

In 1947, about half of the Crab Orchard Site was leased to a variety of industrial tenants whose activities (which continue to this day) included manufacturing ordnance and

Beginning in 1941, the United States used the Crab Orchard Site for the production of ordnance and other related products for use in World War II.

In 1947, about half of the Crab Orchard Site was leased to a variety of industrial tenants whose activities (which continue to this day) included manufacturing ordnance and explosives.

Unidynamics Corporation formerly leased portions of the Crab Orchard Site and conducted manufacturing operations at the Crab Orchard Site from 1952 until 1964.

General Dynamics Ordnance and Tactical Systems, Inc.

(GD-OTS) is

in the process of conducting a remedial investigation and feasibility study for a portion of the Crab Orchard Site (the AUS-OU), which includes an area where we maintained operations, pursuant to an Administrative Order on Consent.

remedial investigation report was approved in February 2015, and work on the feasibility study is underway.

It is unclear when the final feasibility study will be completed, or when a final Record of Decision may be issued.

As noted above, we have

agreed to indemnify Redco Buyer against the Crab Orchard environmental liabilities, and accordingly we act as Redcos agent with respect to such liabilities.

(“GD-OTS”) is in the process of conducting a remedial investigation and feasibility study (“RI-FS”) for portions of the Crab Orchard Site (the “AUS-OU”), which include areas where we maintained operations, pursuant to an Administrative Order on Consent (the “AOC”).

A remedial investigation report was approved in February 2015, and work on the feasibility study is underway.

It is unclear when the final feasibility study will be completed, or when a final Record of Decision (“ROD”) may be issued.

As noted above, we have agreed to indemnify Redco against the Crab Orchard environmental liabilities, and accordingly we act as Redco’s agent with respect to such liabilities.

GD-OTS asked Crane Co.

(n/k/a Redco) to participate in a voluntary, multi-party mediation exercise with respect to response costs that GD-OTS has incurred or will incur

with respect to the AUS-OU, and Crane Co.

(n/k/a Redco) to participate in a voluntary, multi-party mediation exercise with respect to response costs that GD-OTS has incurred or will incur in performing its obligations under the AOC, and Crane Co.

(n/k/a Redco), the U.S.

Government, and other PRPs entered into a non-binding mediation agreement in 2015.

We have stepped into Redcos position as a participant in the mediation.

The first phase of the

mediation, involving certain former munitions or ordnance storage areas, began in November 2017, but did not result in a multi-party settlement agreement.

Subsequently, Redco entered discussions directly with GD-OTS and reached an agreement, as of

July 13, 2021, to contribute toward GD-OTSs past RI-FS costs associated with the first-phase areas for an immaterial amount.

We, as indemnitor, have also agreed to pay a modest percentage of future RI-FS costs and the United States

claimed past response costs relative to the first-phase areas, a sum that has proven to be and we expect to continue to be, in the aggregate, an immaterial amount.

Government, and other PRPs entered into a non-binding mediation agreement in 2015 (we have since stepped into Redco’s position as a participant in the mediation).

The first phase of the mediation, involving certain former munitions or ordnance storage areas, began in November 2017, but did not result in a multi-party settlement agreement.

Subsequently, Redco entered discussions directly with GD-OTS and reached an agreement, as of July 13, 2021, to contribute toward GD-OTS’s past RI-FS costs associated with the first-phase areas for an immaterial amount.

We, as indemnitor, have also agreed to pay a modest percentage of future RI-FS costs and the United States’ claimed past response costs relative to the first-phase areas, a sum that has proven to be and we expect to continue to be, in the aggregate, an immaterial amount.

We understand that GD-OTS has also reached agreements with the U.S.

Government and

the other participating PRPs related to the first-phase areas of concern.

Government and other participating PRPs related to the first-phase areas of concern.

Negotiations between GD-OTS, the U.S.

and remaining participants are underway with respect to resolution of the U.S.

Governments liability for, and contribution claims with respect to, the remaining areas of the site, including those portions of the Crab Orchard Site where

Redcos predecessor conducted manufacturing and research activities.

Government and remaining participants are underway with respect to resolution of the U.S.

Government’s liability for, and contribution claims with respect to, RI/FS costs associated with the remaining areas of the site, including those portions of the Crab Orchard Site where Redco’s predecessor conducted manufacturing and research activities.

The participants have reached agreement in principle on a framework for resolving the U.S.

Governments share of response costs, subject to consummation of a

mutually-agreeable consent decree, but we at present cannot predict whether or when these negotiations will result in a definitive agreement, or when any determination of the ultimate allocable shares of GD-OTS and U.S.

Government response costs for

which we may be liable is likely to be completed.

It is not possible at this time to reasonably estimate the total amount of any obligation for remediation of the Crab Orchard Site as a whole because the allocation among PRPs, selection of

remediation alternatives, and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made.

Insurers with contractual coverage obligations for this site have been notified of this potential

liability and have been providing defense and indemnity coverage, subject to reservations of rights.

Government’s share of RI/FS costs, subject to consummation of a mutually-agreeable consent decree.

Further, we have reached a preliminary agreement in principle with GD-OTS on our contribution to the United States’ claimed past response costs, for an immaterial amount, also conditioned on consummation of the consent decree, and further conditioned on a separate agreement to memorialize the parties’ agreement with respect to the United States’ response costs.

At present, we cannot predict whether or when these negotiations will result in definitive agreements.

Negotiations remain ongoing between us and GD-OTS regarding a potential resolution of GD-OTS’ claim for costs that it has incurred in performing its obligations under the AOC.

We at present cannot predict when any determination of the ultimate allocable share of GD-OTS response costs for which we may be liable is likely to be completed.

None of these discussions address responsibility for the performance of, or payment of costs incurred in connection with, any remedial design or remedial action that may be required pursuant to the ROD (when it is ultimately issued).

It is not possible at this time to reasonably estimate the total amount of any obligation for remediation of the Crab Orchard Site as a whole because the allocation among PRPs, selection of remediation alternatives, and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made.

Insurers with contractual coverage obligations for this site have been notified of this potential liability and have been providing coverage, subject to reservations of rights.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Asbestos Liability

As a result of the Redco Sale, the Company contributed approximately $ 550 million in cash, and all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets of Redco were removed from the Company’s Consolidated Balance Sheets effective August 12, 2022, and the Company no longer has any obligation with respect to pending and future asbestos claims.

The gross settlement and defense costs incurred for the periods presented was as follows:

(in millions)

For the year ended December 31, 2022 2021

Settlement / indemnity costs incurred $ 29.4 $ 40.6

Defense costs incurred 6.4 14.6

Total costs incurred $ 35.8 $ 55.2

The total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the periods presented was as follows:

(in millions)

For the year ended December 31, 2022 2021

Settlement / indemnity payments $ 33.8 $ 42.6

Defense payments 6.1 15.4

Insurance receipts ( 10.6 ) ( 13.1 )

Pre-tax cash payments, net $ 29.3 $ 44.9

Other Proceedings

regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment,

employee benefits, environmental and stockholder matters.

We regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, including government contracting violations, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters.

We record a provision for a liability for such matters when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

provisions, if any, are reviewed quarterly and adjusted as additional information becomes available.

If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may

have been incurred.

If there is a reasonable possibility that a loss or additional loss may have been incurred for such matters, we disclose the estimate of the amount of loss or range of loss, disclose that the amount is immaterial, or disclose

that an estimate of loss cannot be made, as applicable.

We believe that as of December 31, 2022 2021 and 2020, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters,

and that adequate provision has been made in our financial statements for the potential impact of all such matters.

These provisions, if any, are reviewed quarterly and adjusted as additional information becomes available.

If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred.

We believe that as of December 31, 2023, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters, and that adequate provision has been made in our financial statements for the potential impact of all such matters.

Note 14 – Financing

2 unchanged sentences

364 -Day Credit Agreement

4.45% notes due December 2023

Total short-term borrowings $ — $ 399.6

4.45% notes due December 2023

6.55% notes due November 2036

4.20% notes due March 2048

Other deferred financing costs associated with credit facilities

Term Facility a

Total long-term debt $ 248.5 $ —

Debt discounts and debt issuance costs totaled $5.6 million and $5.7 million as of December 31, 2022 and 2021, respectively, and

have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

364-Day Credit Agreement - On

August 11, 2022, the Company entered a new senior unsecured 364-day credit facility (the 364-Day Credit Agreement) under which it borrowed term loans denominated in U.S.

dollars (the Term Loans) in an aggregate principal

amount of $400 million.

Interest on the Term Loans accrues at a rate per annum equal to, at the Companys option, (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 Moodys of the Companys 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 364-Day Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type.

Commercial paper program - On July 28, 2021, we increased the size of the commercial paper program (CP Program) to permit the issuance of

short-term, unsecured commercial paper notes in an aggregate principal amount not to exceed $650 million at any time outstanding.

We may issue short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in

Section 4(a)(2) of the Securities Act of 1933, as amended.

Prior to this increase, the CP Program permitted us to issue commercial paper notes in an aggregate principal amount not to exceed $550 million at any time outstanding.

terms and conditions of the CP Program remain the same.

Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time.

The notes will have maturities of up to 397 days from date of issue.

The notes rank at least

pari passu with all of our other unsecured and unsubordinated indebtedness.

As of December 31, 2022 and 2021, there was no outstanding borrowings, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.45% notes due December 2023 - In December 2013, we issued 10 year notes having an aggregate principal

amount of $300 million.

The notes are unsecured, senior obligations that mature on December 15, 2023 and bear interest at 4.45% per annum, payable semi-annually on June 15 and December 15

of each year.

The notes have no sinking fund requirement, but may be redeemed, in whole or part, at our option.

These notes do not contain any material debt covenants or cross default provisions.

If there is a change in control of the Company, and

if as a consequence, the notes are rated below investment grade by both Moodys Investors Service and Standard & Poors, then holders of the notes may require us to repurchase them, in whole or in part, for 101% of the principal

amount plus accrued and unpaid interest.

Debt issuance costs are deferred and included in long-term debt and are amortized as a component of interest expense over the term of the notes.

Including debt issuance cost amortization, these notes have an

effective annualized interest rate of 4.56%.

The notes were issued under an indenture dated as of December 13, 2013.

The indentures contain certain restrictions, including a limitation that restricts our ability and the ability of certain of

our subsidiaries to create or incur secured indebtedness, enter into certain sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

6.55% notes due November 2036 - In November 2006, we issued 30 year notes having an aggregate principal amount of $200 million.

The notes are unsecured,

senior obligations of us that mature on November 15, 2036 and bear interest at 6.55% per annum, payable semi-annually on May 15 and November 15 of each year.

The notes have no sinking fund requirement, but may be redeemed, in

whole or in part, at the option of us.

These notes do not contain any material debt covenants or cross default provisions.

If there is a change in control of the Company, and if as a consequence, the notes are rated below investment grade by both

Moodys Investors Service and Standard & Poors, then holders of the notes may require us to repurchase them, in whole or in part, for 101% of the principal amount plus accrued and unpaid interest.

Debt issuance costs are deferred

and included in long-term debt and are amortized as a component of interest expense over the term of the notes.

Including debt issuance cost amortization, these notes have an effective annualized interest rate of 6.67%.

The notes were issued under

an indenture dated as of April 1, 1991.

The indentures contain certain restrictions, including a limitation that restricts our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness, enter into certain

sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

due March 2048 - On February 5, 2018, we completed a public offering of $350 million aggregate principal amount of 4.20% Senior Notes due 2048 (the 2048 Notes).

The 2048 Notes bear interest at a rate of 4.20% per annum

and mature on March 15, 2048.

Interest on the 2048 Notes is payable on March 15 and September 15 of each year, commencing on September 15, 2018.

These notes do not contain any material debt covenants or cross default provisions.

If there is a change in control of the Company, and if as a consequence, the notes are rated below investment grade by both Moodys Investors Service and Standard & Poors, then holders of the notes may require us to repurchase

them, in whole or in part, for 101% of the principal amount plus accrued and unpaid interest.

Debt issuance costs are deferred and included in long-term debt and are amortized as a component of interest expense over the term of the notes.

debt issuance cost amortization, these notes have an effective annualized interest rate of 4.29%.

The notes were issued under an indenture dated as of February 5, 2018.

The indentures contain certain restrictions, including a limitation that

restricts our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness, enter into certain sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of our assets and the

assets of our subsidiaries.

Other - As of December 31, 2022, we had open standby letters of credit of $66.8 million issued pursuant to a $170.3

million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.

As of December 31, 2021, we had open standby letters of credit of $49.5 million issued pursuant to a $162.7 million uncommitted Letter of Credit

Reimbursement Agreement, and certain other credit lines.

Revolving Credit Facility - On July 28, 2021, we entered into a $650 million,

5-year Revolving Credit Agreement (the 2021 Facility), which replaced the $550 million revolving credit facility that we had entered into in December 2017.

The 2021 Facility allows us to borrow, repay, or to the extent permitted by

the agreement, prepay and re-borrow funds at any time prior to the stated maturity date.

Interest on loans made under the 2021 Facility accrues, at our option, at a rate per annum equal

(a) Debt issuance costs totaled $ 0.8 million and $ 0.4 million as of December 31, 2023 and 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

Credit Facilities – On March 17, 2023, the Company entered into a senior secured credit agreement (the “Credit Agreement”), which provided for (i) a $ 500 million, 5 -year revolving credit facility (the “Revolving Facility”) and (ii) a $ 300 million, 3 -year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation.

On April 3, 2023, the Company borrowed the full amount of the Term Facility.

The Company made principal prepayments of $ 50.6 million on the Term Facility during the year ended December 31, 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to (1) a base rate, plus a margin ranging from 0.00% to 0.50% depending upon the ratings by S&P and Moodys of our senior unsecured long-term debt (the Index Debt

Rating), or (2) an adjusted LIBO rate or the applicable replacement rate (determined based on hardwired LIBOR transition provisions consistent with those published by the Alternative References Rates Committee) for an interest

period to be selected by us, plus a margin ranging from 0.805% to 1.50% depending upon the Index Debt Rating.

The 2021 Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations on us and

our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates and hedging arrangements.

We must also maintain a debt to

capitalization ratio not to exceed 0.65 to 1.00 at all times.

The 2021 Facility also provides for customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or

warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA

events, material judgments and a change in control of us.

The undrawn portion of this revolving credit agreement is also available to serve as a backstop facility for the issuance of commercial paper.

As of December 31, 2022 and 2021, there

were no outstanding borrowings.

On October 3, 2023, the Company exercised a portion of the accordion feature under its existing revolving credit facility to increase the available borrowing capacity from $ 500 million, to $ 800 million.

The corresponding amendment established incremental revolving commitments in an aggregate amount of $ 300 million and refreshed the incremental capacity under the Company’s existing credit agreement.

The Revolving Facility allows us to borrow, repay and re-borrow funds from time to time prior to the maturity of the Revolving Facility without any penalty or premium, subject to customary borrowing conditions for facilities of this type and the reimbursement of breakage costs.

Borrowings under the Term Facility are prepayable without premium or penalty, subject to customary reimbursement of breakage costs.

Interest on loans advanced under the Credit Agreement accrues, at our option, at a rate per annum equal to (1) adjusted term SOFR plus a credit spread adjustment of 0.10 % for the applicable interest period plus a margin ranging from 1.50 % to 2.25 % or (2) a base rate plus a margin ranging from 0.50 % to 1.25 %, in each case, with such margin determined based on the lower of the ratings of our senior, unsecured long-term debt (the “Ratings”) and our total net leverage ratio.

We are required to pay a fee on undrawn commitments under the Revolving Facility at a rate per annum that ranges from 0.20 % to 0.35 %, based on the lower of the Ratings and our total net leverage ratio.

The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates, hedging arrangements and amendments to our organizational documents or to certain subordinated debt agreements.

As of the last day of each fiscal quarter, our total net leverage ratio cannot exceed 3.50 to 1.00 (provided that, at our election, such maximum ratio may be increased to 4.00 to 1.00 for specified periods following our consummation of certain material acquisitions) and our minimum interest coverage ratio must be at least 3.00 to 1.00.

The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary.

The Company was in compliance with all such covenants as of December 31, 2023.

364-Day Credit Agreement - On August 11, 2022, the Company entered a new senior unsecured 364 -day credit facility (the “ 364 -Day Credit Agreement”) under which it borrowed term loans denominated in U.S.

dollars (the “Term Loans”) in an aggregate principal amount of $ 400 million.

Interest on the Term Loans accrues at a rate per annum equal to, at the Company’s option, (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.

During the first quarter of 2023, the Company repaid the remaining principal of $ 400 million under the 364 -Day Credit Agreement.

Other - As of December 31, 2023 and 2022, the Company had open standby letters of credit of $ 24.4 million and $ 9.9 million, respectively.

The standby letters of credit were issued pursuant to Letter of Credit Reimbursement Agreements.

As of December 31, 2023, our total debt to total capitalization ratio was 15.4 %, computed as follows:

(in millions)

Total debt $ 248.5

Equity 1,360.3

Capitalization $ 1,608.8

1 unchanged sentence

Note 15 - Fair Value Measurements

standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurements are to be considered from the

perspective of a market participant that holds the asset or owes the liability.

The standards also establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when

measuring fair value.

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability.

The standards also establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standards describe three levels of inputs that may be used to measure fair value:

Quoted prices in active markets for identical or similar assets and liabilities.

Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than

quoted prices in active markets for identical or similar assets and liabilities.

Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models

with inputs that are generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable

Unobservable inputs that are supported by little or no market activity and that are significant to the

fair value of the assets or liabilities.

Valuation Technique

carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable, commercial paper and accounts payable approximate fair value, without being discounted, due to the short periods during which these

amounts are outstanding.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We are exposed to certain risks related to our ongoing business operations, including market risks related to

fluctuation in currency exchange.

Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.

Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models with inputs that are generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Valuation Technique

The carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable, commercial paper and accounts payable approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.

We are exposed to certain risks related to our ongoing business operations, including market risks related to fluctuation in currency exchange.

We use foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on our earnings and cash flows.

We do not hold or issue

derivative financial instruments for trading or speculative purposes.

We do not hold or issue derivative financial instruments for trading or speculative purposes.

Foreign exchange contracts not designated as hedging instruments had a notional value of $ 11.3 million and $ 4.1 million as of December 31, 2023 and 2022, respectively.

derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates.

Based on these inputs, the derivatives

are classified within Level 2 of the valuation hierarchy.

Such derivative receivable amounts are recorded within Other current assets on our Consolidated Balance Sheets and were $5.9 million and $0.0 million as of the years ended

December 31, 2022 and 2021, respectively.

Such derivative liability amounts are recorded within Accrued liabilities on our Consolidated Balance Sheets and there were no derivative liabilities for the years ended December 31,

2022 and 2021, respectively.

Available-for-sale securities consist of rabbi trust investments that hold marketable securities for the benefit of participants in

our Supplemental Executive Retirement Plan.

These investments are measured at fair value using quoted market prices in an active market and are therefore classified within Level 1 of the valuation hierarchy.

The fair value of available-for-sale

securities was $0.4 million and $1.6 million as of December 31, 2022 and 2021, respectively.

These investments are included in Other assets on our Consolidated Balance Sheets.

Long-term debt rates currently available to us for debt with similar terms and remaining maturities are used to estimate the fair value for debt issues that are not

quoted on an exchange.

The estimated fair value of long-term debt is measured using Level 2 inputs and was $753.1 million and $984.9 million as of December 31, 2022 and 2021, respectively.

Our derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates.

Based on these inputs, the derivatives are classified within Level 2 of the valuation hierarchy.

Such derivative receivable amounts are recorded within “Other current assets” on our Consolidated Balance Sheets and were $ 0.1 million and $ 0.1 million as of December 31, 2023 and 2022, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Consolidated Balance Sheets and was $ 0.1 million as of December 31, 2023.

The Company had no such derivative liability as of December 31,2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 16 – Restructuring

2022 Repositioning - In the fourth quarter of 2022, in

response to economic uncertainty, we initiated modest workforce reductions of approximately 300 employees, or about 3% of our global workforce.

We expect to complete the program in the fourth quarter of 2023.

We recorded a charge of

$14.4 million for the year ended December 31, 2022.

2020 Repositioning - In the second quarter of 2020, we initiated actions in response to the

adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition.

These actions include workforce reductions of approximately 1,200 employees, or about 11% of our global workforce, and the exiting of two leased

office facilities and one leased warehouse facility.

We have completed this program and do not expect to incur additional restructuring charges.

We recorded restructuring gain of $3.7 million for the year ended December 31, 2021.

recorded a charge of $32.1 million for the year ended December 31, 2020.

2019 Repositioning - In the fourth quarter of 2019, we initiated actions

to consolidate two manufacturing operations in Europe within our Process Flow Technologies segment.

2022 Repositioning - In the fourth quarter of 2022, in response to economic uncertainty, we initiated modest workforce reductions of approximately 160 employees, or about 2 % of our global workforce.

We expect to complete the program in the first quarter of 2024.

We recorded a charge of $ 8.2 million for the year ended December 31, 2022.

2019 Repositioning - In the fourth quarter of 2019, we initiated actions to consolidate two manufacturing operations in Europe within our Process Flow Technologies segment.

In 2020, we recorded additional severance costs related to the final negotiation with the works council/union at both locations.

These actions, taken

together, included workforce reductions of approximately 180 employees, or less than 1% of our global workforce.

We expect to complete the program in the fourth quarter of 2023.

We recorded a gain of $4.0 million in 2022.

We recorded charges of

$0.1 million and $6.1 million for the years ended December 31, 2021 and 2020, respectively.

2017 Repositioning - In the fourth quarter of

2017, we initiated broad-based repositioning actions designed to improve profitability.

These actions included headcount reductions of approximately 300 employees, or about 3% of our global workforce, and select facility consolidations in North

America and Europe.

In 2020, we adjusted the estimate downward to reflect the impact of employees that chose to voluntarily terminate prior to receiving severance at the conclusion of the actions in North America.

In 2021, we recorded a gain on sale

of real estate related to these actions.

We completed the program and do not expect to incur additional restructuring charges.

We recorded a restructuring gain of $13.3 million and $6.2 million for the years ended December 31, 2021

and 2020 respectively.

Other Restructuring - In the second quarter of 2020, we recorded other restructuring costs within our Payment &

Merchandising Technologies segment.

We do not expect to incur additional restructuring charges.

These actions, taken together, included workforce reductions of approximately 180 employees, or about 2 % of our global workforce.

We expect to complete the program in the first quarter of 2024.

We recorded a restructuring gain of $ 4.0 million for the year ended December 31, 2022 and a charge of $ 0.1 million for the year ended December 31, 2021.

Restructuring Charges (Gains), Net

2 unchanged sentences

Aerospace & Electronics

$ — $ 1.5 $ —

Process Flow Technologies 0.9 2.3 ( 13.2 )

Payment & Merchandising Technologies

Engineering Materials ( 0.3 ) 0.4 —

Total restructuring charges (gains), net $ 0.6 $ 4.2 $ ( 13.2 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our restructuring charges (gains) by program, cost type and segment for the years ended

December 31, 2022, 2021 and 2020:

December 31, 2022

December 31, 2021

December 31, 2020

(in millions)

Aerospace & Electronics

Process Flow Technologies

Payment & Merchandising Technologies

Engineered Materials

2022 Repositioning

The following table summarizes our restructuring charges (gains) by program, cost type and segment for the years ended December 31, 2023, 2022 and 2021:

December 31, 2023 December 31, 2022 December 31, 2021

(in millions) Severance Other Total Severance Other Total Severance Other Total

Aerospace & Electronics $ — $ — $ — $ 1.5 $ — $ 1.5 $ — $ — $ —

Process Flow Technologies ( 0.1 ) 1.0 0.9 6.3 — 6.3 — — —

Payment & Merchandising Technologies

Engineered Materials ( 0.3 ) — ( 0.3 ) 0.4 — 0.4 — — —

2022 Repositioning ( 0.4 ) 1.0 0.6 8.2

Process Flow Technologies

2019 Repositioning

Process Flow Technologies

Payment & Merchandising Technologies

Process Flow Technologies $ — $ — $ — $ — $ — $ — $ ( 0.1 ) (a) $ — $ ( 0.1 )

2020 Repositioning (c)

— — — — — — ( 0.1 ) — ( 0.1 )

Process Flow Technologies $ — $ — $ — $ ( 1.2 ) (a)

$ ( 2.8 ) (b)

$ ( 4.0 ) $ 0.1 $ — $ 0.1

2019 Repositioning — — — ( 1.2 ) ( 2.8 ) ( 4.0 ) 0.1 — 0.1

Payment & Merchandising Technologies

Other Restructuring

Process Flow Technologies $ — $ — $ — $ — $ — $ — $ ( 0.4 ) (a)

$ ( 12.8 ) (b)

2017 Repositioning (c)

— — — — — — ( 0.4 ) ( 12.8 ) ( 13.2 )

Total $ ( 0.4 ) $ 1.0 $ 0.6 $ 7.0 $ ( 2.8 ) $ 4.2 $ ( 0.4 ) $ ( 12.8 ) $ ( 13.2 )

Reflects changes in estimates for increases and decreases in costs related to our restructuring programs.

Primarily reflects non-cash charges related to the impairment of ROU assets and leasehold improvements associated with

the exit of the three leased facilities in 2020.

Reflects a pre-tax gain related to the sale of real estate.

2020 and 2017 programs are completed and we do not expect to incur additional restructuring charges.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the cumulative restructuring costs incurred through December 31, 2022.

expect to incur additional facility consolidation costs to complete these actions as of December 31, 2022.

The following table summarizes the cumulative restructuring costs, net incurred through December 31, 2023.

We do not expect to incur additional facility consolidation costs to complete these actions as of December 31, 2023.

Cumulative Restructuring Costs

(in millions)

Aerospace & Electronics

Process Flow Technologies

Payment & Merchandising Technologies

Engineered Materials

2022 Repositioning

(in millions) Severance Other Total

Aerospace & Electronics $ 1.5 $ — $ 1.5

Process Flow Technologies 6.2 1.0 7.2

Payment & Merchandising Technologies

Engineered Materials 0.1 — 0.1

2 unchanged sentences

2019 Repositioning $ 14.9 $ ( 2.8 ) $ 12.1

Aerospace & Electronics

Process Flow Technologies

Payment & Merchandising Technologies

2017 Repositioning

Restructuring Liability

The following

table summarizes the accrual balances related to these restructuring charges by program:

(in millions)

Repositioning

Balance as of December 31, 2020 (c)

Adjustments (b)

Balance as of December 31, 2021 (c)

The following table summarizes the accrual balances related to these restructuring charges by program:

(in millions) 2022 Repositioning 2019 Repositioning Total

Balance as of December 31, 2022 (b)

$ 8.2 $ 2.4 $ 10.6

Charges (Gain) (a)

Adjustments (b)

Balance as of December 31, 2022 (c)

Utilization ( 4.3 ) ( 2.2 ) ( 6.5 )

Balance as of December 31, 2023 (b)

$ 4.5 $ 0.2 $ 4.7

Included within “Restructuring charges (gains), net” in the Consolidated Statements of Operations.

Included within Restructuring charges (gains), net in the Consolidated Statements of Operations and reflects

changes in estimates for increases and decreases in costs

Included within Accrued Liabilities in the Consolidated Balance Sheets.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Crane Holdings, Co.

on the Financial Statements

We have audited the accompanying combined balance sheets of Crane Company (the Business or the Company),

which consists of the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Crane Holdings, Co.

as of December 31, 2022 and 2021, the related combined statements of operations, comprehensive income,

cash flows, and changes in net investment, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in

conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Companys management.

Our responsibility is to express an opinion on the Companys financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and

significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the

critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Over-Time Basis Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue as they fulfill their performance obligations and transfer control of products to their customers.

The Company has certain revenue

contracts indirectly to the U.S.

government through subcontracts.

The clauses of those contracts stipulate that any amounts included in work-in-progress are the property

government as they own any work-in progress as the contracted product is being built.

The Company uses the

cost-to-cost method of determining their progress, measuring progress by comparing costs incurred to date to the total estimated costs to provide the performance

In 2022, the Company recognized approximately $88 million in revenue over time related to contracts in progress as of December 31, 2022.

identified revenue recognized over time as a critical audit matter because of the judgments necessary for management to determine the margin to be used to estimate revenue for the overtime revenue.

This required a high degree of auditor judgment

when performing audit procedures to audit managements estimates of margin at completion used to recognize revenue over time and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures performed related to the recognition of revenue recognized over-time included the following, among others:

We tested the effectiveness of controls related to the revenue recognized over-time, including managements controls

over costs incurred to date and estimates of margin at completion, as well as the accurate classification of contracts in the system during the order entry process.

We selected a sample of contracts with customers that were recognized over time, and we performed the following:

Evaluated whether the contracts were properly included in managements calculation of long-term contract revenue based

on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

Evaluated the appropriateness and consistency of the methods of calculation and assumptions used by management to develop

the margin at completion applied to determine the revenue recognized.

We tested the mathematical accuracy of managements calculation of revenue recognized.

We evaluated managements ability to estimate future costs and margins at completion accurately by comparing actual

costs and margins at completion for similar contracts that were previously completed to managements historical estimates for such contracts.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

March 30, 2023

We have served as the Companys auditor since 2022.

Crane Company

(A Business of Crane Holdings, Co.)

STATEMENTS OF OPERATIONS

For the year ended December 31,

(in millions)

Operating costs and expenses:

Cost of sales

Selling, general and administrative

Loss on divestiture of asbestos-related assets and liabilities

Acquisition-related and integration charges

Restructuring charges (gains), net

Operating profit

Other income (expense):

Interest income

Interest expense

Related party interest income

Gain on sale of business

Miscellaneous income, net

Total other income

Income before income taxes

Provision for income taxes

Net income before allocation to noncontrolling interests

Noncontrolling interest in subsidiaries earnings

See Notes to Combined Financial Statements

Crane Company

(A Business of Crane Holdings, Co.)

COMBINED STATEMENTS OF COMPREHENSIVE INCOME

For the year ended December 31,

(in millions)

Net income before allocation to noncontrolling interests

Components of other comprehensive (loss) income, net of tax

Currency translation adjustment

Changes in pension and postretirement plan assets and benefit obligation, net of tax

Other comprehensive (loss) income, net of tax

Comprehensive income before allocation to noncontrolling interests

Noncontrolling interests in comprehensive (loss) income

Comprehensive income

See Notes to Combined Financial Statements

Crane Company

(A Business of Crane Holdings, Co.)

COMBINED BALANCE SHEETS

Balance as of December 31,

(in millions)

Current assets:

Cash and cash equivalents

Current insurance receivable asbestos

Accounts receivable, net

Inventories, net

Other current assets

Total current assets

Property, plant and equipment, net

Insurance receivable asbestos

Long-term deferred tax assets

Intangible assets, net

Liabilities and Crane net investment

Current liabilities:

Short-term borrowings

Accounts payable

Current asbestos liability

Accrued liabilities

and foreign taxes on income

Total current liabilities

Accrued pension and postretirement benefits

Long-term deferred tax liability

Long-term asbestos liability

Other liabilities

Commitments and contingencies (Note 13)

Crane net investment:

Crane net investment

Accumulated other comprehensive loss

Total Crane net investment

Noncontrolling interest

Total Crane net investment and noncontrolling interest

Total liabilities and Crane net investment and noncontrolling interest

See Notes to Combined Financial Statements

Crane Company

(A Business of Crane Holdings, Co.)

COMBINED STATEMENTS OF CASH FLOWS

For year ended December 31,

(in millions)

Operating activities:

Net income before allocation to noncontrolling interests

Non-cash loss on divestiture of asbestos-related assets and

Gain on sale of business

Gain on sale of property

Depreciation and amortization

Stock-based compensation expense

Defined benefit plans and postretirement credit

Deferred income taxes

Cash (used for) provided by operating working capital

Defined benefit plans and postretirement contributions

Environmental payments, net of reimbursements

Asbestos related payments, net of insurance recoveries

Divestiture of asbestos-related assets and liabilities

Total (used for) provided by operating activities

Investing activities:

Proceeds from disposition of capital assets

Capital expenditures

Purchase of marketable securities

Proceeds from sale of business

Proceeds from sale of marketable securities

Payments for acquisitions, net of cash acquired

Total provided by (used for) investing activities

Financing activities:

Debt issuance costs

Proceeds from issuance of commercial paper with maturities greater than 90 days

Repayments of commercial paper with maturities greater than 90 days

Repayments of commercial paper with maturities of 90 days or less

Proceeds from revolving credit facility

Repayments of revolving credit facility

Proceeds from term loan

Repayment of term loan

Net transfers (to) from parent

Total provided by (used for) financing activities

Effect of foreign exchange rates on cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Detail of cash (used for) provided by operating working capital:

Accounts receivable

Other current assets

Accounts payable

Accrued liabilities

and foreign taxes on income

Supplemental disclosure of cash flow information:

Interest paid third party

Income taxes paid

See Notes to Combined Financial Statements

Crane Company

(A Business of Crane Holdings, Co.)

STATEMENTS OF CHANGES IN NET INVESTMENT

(in millions)

Comprehensive

Total Crane Net

Noncontrolling

Total Crane Net

Investment and

Noncontrolling

BALANCE JANUARY 1, 2020

Stock-based compensation

Changes in pension and postretirement plan assets and benefit obligation, net of tax

Currency translation adjustment

Net transfers to Parent

BALANCE DECEMBER 31, 2020

Stock-based compensation

Changes in pension and postretirement plan assets and benefit obligation, net of tax

Currency translation adjustment

Net transfers from Parent

BALANCE DECEMBER 31, 2021

Stock-based compensation

Changes in pension and postretirement plan assets and benefit obligation, net of tax

Currency translation adjustment

Net transfers to Parent

BALANCE DECEMBER 31, 2022

See Notes to Combined Financial Statements

Crane Company

(A Business of Crane Holdings, Co.)

Notes to Combined

Financial Statements

Nature of Operations and Significant Accounting Policies

Nature of Operations

Crane Company (the Business, we,

us, or our) is a diversified manufacturer of highly engineered industrial products.

We are a combination of three businesses of Crane Holdings, Co.

(Crane or the Parent) and consist of three reporting

Aerospace & Electronics (A&E), Process Flow Technologies (PFT), and Engineered Materials (EM).

Our primary end markets include process industries (chemical production, oil and gas, power,

and general industrial), nonresidential and municipal construction, aerospace, defense and space, along with a wide range of general industrial and certain consumer related end markets.

See Note 4, Segment Information for the

relative size of these segments in relation to the total company (both net sales and total assets).

Basis of Presentation

The Business has historically operated as part of Crane Holdings, Co.;

consequently, stand-alone financial statements have not historically been prepared for the

The accompanying Combined Financial Statements have been prepared from the Parents historical accounting records and are presented on a stand-alone basis as if the Business operations had been conducted independently from the

These Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

The Combined Statements of Operations include all revenues and costs directly attributable to the Business, including costs for facilities, functions and services used

by the Business.

Costs for certain functions and services performed by centralized Crane organizations are directly charged to the Business based on specific identification when possible or reasonable allocation methods such as net sales, headcount,

usage or other allocation methods.

The results of operations include allocations of costs for administrative functions and services performed on behalf of the Business by centralized groups within Crane (see Note 2, Related Parties

for a description of the allocation methodologies).

All charges and allocations for facilities, functions and services performed by Crane have been deemed settled in cash by the Business to Crane in the period in which the cost was recorded in the

Combined Statements of Operations.

As more fully described in Note 10, Income Taxes current and deferred income taxes have been determined based on the stand-alone results of the Business.

However, because the Business filed as part

of Cranes tax group in certain jurisdictions, the Business actual tax balances may differ from that reported.

The Business portion of income taxes for certain jurisdictions is deemed to have been settled in the period the related

tax expense was recorded.

Crane uses a centralized approach to cash management and financing its operations.

Accordingly, the cash of Crane and any legal entities

that participate in Cranes centralized approach to cash management has been included in the Combined Financial Statements.

The short-term third-party borrowings included in the Combined Financial Statements have been specifically identified as

a liability of the Business.

Transactions between Crane and the Business are deemed to have been settled immediately through Crane net investment.

The net effect of the deemed settled transactions is reflected in the Combined Statements of Cash

Flows as Net transfers to Parent within financing activities and on the Combined Balance Sheets as Crane net investment. Other transactions, which have historically been cash-settled, are reflected on the Combined Balance

Sheets within Accounts receivable, net and Accounts payable.

All intracompany accounts and transactions within the Business have been

eliminated in the preparation of the Combined Financial Statements.

The Combined Financial Statements of the Business include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Business.

All allocations and estimates in the Combined Financial Statements are based on assumptions that management believes are reasonable.

However, the Combined

Financial Statements included herein may not be indicative of the financial position, results of operations and cash flows of the Business in the future, or if the Business had been a separate, stand-alone entity during the years presented.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

Crane Company

(A Business of Crane Holdings, Co.)

Pending Separation

March 30, 2022, Crane announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies (the Separation).

Significant Accounting Policies

Principles of Combination.

Combined Financial Statements have been prepared on a stand-alone basis and include the accounts of Crane Company and our subsidiaries.

Use of Estimates.

Our accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Combined Financial Statements and the reported amounts of revenue and expense during the

reporting period.

Actual results may differ from those estimated.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary.

provisions, employee benefits, taxes, environmental liability and contingencies.

Currency Translation.

Assets and liabilities of subsidiaries that prepare

financial statements in currencies other than the U.S.

dollar are translated at the rate of exchange in effect on the balance sheet date;

results of operations are translated at the monthly average rates of exchange prevailing during the year.

related translation adjustments are included in accumulated other comprehensive income (loss) as a separate component of Crane net investment.

In accordance with Accounting Standards Codification (ASC) Topic 606 Revenue from Contracts with Customers, we recognize revenue when control of the promised goods or services in a contract transfers to the

customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We account for a contract when both parties have approved and committed to the terms, each partys rights and payment

obligations under the contract are identifiable, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration.

When shipping and handling activities are performed after the customer obtains

control of the product, we elect to account for shipping and handling as activities to fulfill the promise to transfer the product.

In determining the transaction price of a contract, we exercise judgment to determine the total transaction price

when it includes estimates of variable consideration, such as rebates and milestone payments.

We generally estimate variable consideration using the expected value method and consider all available information (historical, current, and forecasted)

in estimating these amounts.

variable consideration is resolved.

We primarily generate revenue through the manufacture and sale of engineered industrial products.

Each product within a contract generally represents a

separate performance obligation, as we do not provide a significant service of integrating or installing the products, the products do not customize each other, and the products can function independently of each other.

Control of products generally

transfers to the customer at a point in time, as the customer does not control the products as they are manufactured.

We exercise judgment and consider the timing of right to payment, transfer of risk and rewards, transfer of title, transfer of

physical possession, and customer acceptance when determining when control transfers to the customer.

As a result, revenue from the sale of products is generally recognized at a point in time either upon shipment or delivery

based on the specific shipping terms in the contract.

When products are customized or products are sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, revenue is recognized over time because control is

transferred continuously to customers, as the contract progresses.

We exercise judgment to determine whether the products have an alternative use to us.

When an alternative use does not exist for these products and we are entitled to payment for

performance completed to date which includes a reasonable profit margin, revenue is recognized over time.

When a contract with the U.S.

government or subcontract for the U.S.

government contains clauses indicating that the U.S.

government owns any work-in-progress as the contracted product is being built, revenue is recognized over time.

The measure of progress applied by us is the cost-to-cost method as this provides the most faithful depiction of the pattern of transfer of control.

Under this method, we measure progress by comparing costs incurred to date to the total estimated costs

to provide the performance obligation.

This method effectively reflects our progress toward completion, as this methodology includes any work-in-process amounts as part

of the measure of progress.

Costs incurred represent work performed, which corresponds with, and thereby depicts, the transfer of control to the customer.

Total revenue recognized and cost estimates are updated on a monthly basis.

Business recognized approximately $88 million in revenue over time related to contracts in progress as of December 31, 2022.

Crane Company

(A Business of Crane Holdings, Co.)

When there are multiple performance obligations in a single contract, the total transaction price is allocated to each

performance obligation based on their relative standalone selling prices.

We maximize the use of observable data inputs and consider all information (including market conditions, segment-specific factors, and information about the customer or class

of customer) that is reasonably available.

The standalone selling price for our products and services is generally determined using an observable list price, which differs by class of customer.

Revenue recognized from performance obligations satisfied in previous periods (for example, due to changes in the transaction price or estimates), was not material in

Payment for products is due within a limited time period after shipment or delivery, and we generally do not offer extended payment terms.

typically due within 3090 calendar days of the respective invoice dates.

Customers generally do not make large upfront payments.

Any advanced payments received do not provide us with a significant benefit of financing, as the payments are

meant to secure materials used to fulfill the contract, as opposed to providing us with a significant financing benefit.

When an unconditional right to

consideration exists, we record these amounts as receivables.

When amounts are dependent on factors other than the passage of time in order for payment from a customer to become due, we record a contract asset.

Contract assets represent unbilled

amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

Contract liabilities

represent advance payments from customers.

Revenue related to contract liabilities is recognized when control is transferred to the customer.

commissions related to certain contracts, which qualify as incremental costs of obtaining a contract.

However, the sales commissions generally relate to contracts for products or services satisfied at a point in time or over a period of time less

than one year.

See Note 5, Revenue for further details.

Cost of goods sold includes the costs of inventory sold and the related purchase and distribution costs.

In addition to material, labor and direct overhead and inventoried cost, cost of goods sold include allocations of other

expenses that are part of the production process, such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, amortization of production related intangible assets and depreciation expense.

We also include

costs directly associated with products sold, such as warranty provisions.

Selling, General and Administrative Expenses.

Selling, general and administrative

expenses are recognized as incurred, or as allocated based on methodologies further discussed in Note 2, Related Parties. Such expenses include the costs of promoting and selling products and include such items as compensation,

advertising, sales commissions and travel.

Also included are costs related to compensation for other operating activities such as executive office administrative and engineering functions, as well as general operating expenses such as office

supplies, non-income taxes, insurance, and office equipment rentals.

Income Taxes.

We account for income taxes in

accordance with ASC Topic 740 Income Taxes (ASC 740) which requires an asset and liability approach for the financial accounting and reporting of income taxes.

Under this method, deferred income taxes are recognized for the

expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements.

These balances are measured using the enacted tax rates expected to apply in the year(s) in which

these temporary differences are expected to reverse.

The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.

Based on consideration of all available evidence regarding their utilization, we record net deferred tax assets to the extent that it is more likely than not that they

will be realized.

is sufficient

Crane Company

(A Business of Crane Holdings, Co.)

to reduce the deferred tax asset to an amount that is more likely than not to be realized.

The evidence we consider in reaching such conclusions includes, but is not limited to, (1) future

reversals of existing taxable temporary differences, (2) future taxable income exclusive of reversing taxable temporary differences, (3) taxable income in prior carryback year(s) if carryback is permitted under the tax law,

(4) cumulative losses in recent years, (5) a history of tax losses or credit carryforwards expiring unused, (6) a carryback or carryforward period that is so brief it limits realization of tax benefits, and (7) a strong earnings

history exclusive of the loss that created the carryforward and support showing that the loss is an aberration rather than a continuing condition.

We account for

unrecognized tax benefits in accordance with ASC 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more

likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position.

The tax benefit recognized is the largest amount of

benefit that is greater than 50% likely of being realized upon ultimate settlement.

We recognize interest and penalties related to unrecognized tax benefits within

the Provision for income taxes line of our Combined Statement of Operations, while accrued interest and penalties are included within the Other liabilities line of our Combined Balance Sheets.

Income taxes as presented herein, attribute current and deferred income taxes of Crane to the Business stand-alone financial statements in a manner that is

systematic, rational and consistent with the asset and liability method prescribed by ASC 740.

Accordingly, the Business income tax provision was prepared following the separate return method.

The separate return method applies ASC 740 to the

stand-alone financial statements of each member of the consolidated group as if the group members were separate taxpayers.

As a result, actual transactions included in the consolidated financial statements of Crane may not be included in the

separate Combined Financial Statements of the Business.

Similarly, the tax treatment of certain items reflected in the Combined Financial Statements of the Business may not be reflected in the consolidated financial statements and tax returns of

Therefore, such items as net operating losses, credit carry forwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in Cranes consolidated financial statements.

As such, the income

taxes of the Business as presented in the Combined Financial Statements may not be indicative of the income taxes that the Business will generate in the future.

Current obligations for income taxes in jurisdictions where the Business files a combined tax return with the Parent are deemed settled with the Parent and are

reflected within Net transfers to Parent as a financing activity in the Combined Statements of Cash Flows.

Cash and Cash Equivalents.

cash equivalents include highly liquid investments with original maturities of three months or less that are readily convertible to cash and are not subject to significant risk from fluctuations in interest rates.

As a result, the carrying amount of

cash and cash equivalents approximates fair value.

The Business participated in Cranes centralized cash management and financing programs (see Note 2, Related Parties for additional information).

The cash reflected on the

Combined Balance Sheets represents all cash on hand for all Crane Company entities and Crane entities that participate in the centralized cash management program.

Accounts Receivable, Net.

Accounts receivable are carried at net realizable value.

The allowance for doubtful accounts was $8.0 million and

$4.8 million as of December 31, 2022 and 2021, respectively.

The allowance for doubtful accounts activity was not material to our financial results for the years ended December 31, 2022 and 2021.

Concentrations of credit risk with

respect to accounts receivable are limited due to the large number of customers and relatively small account balances within the majority of our customer base and their dispersion across different businesses.

We periodically evaluate the financial

strength of our customers and believe that our credit risk exposure is limited.

Inventories, net.

Inventories consist of the following:

(in millions) December 31,

Finished goods

Finished parts and subassemblies

Work in process

Raw materials

Total inventories, net

Inventories, net include the costs of material, labor and overhead and are stated at the lower of cost or net realizable value.

inventories are stated at either the lower of cost or net realizable value using the last-in, first-out (LIFO) method or the lower of cost or net realizable

value using the first-in, first-out (FIFO) method.

Inventories held in foreign locations are primarily stated at the lower of cost or

Crane Company

(A Business of Crane Holdings, Co.)

market using the FIFO method.

The LIFO method is not being used at our foreign locations as such a method is not allowable for tax purposes.

Changes in the levels of LIFO inventories have

increased cost of sales by $6.0 million, $2.6 million and $1.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The portion of inventories costed using the LIFO method was 49.8% and 39.4% of combined

inventories as of December 31, 2022 and 2021, respectively.

If inventories that were valued using the LIFO method had been valued under the FIFO method, they would have been higher by $24.0 million and $17.9 million as of

December 31, 2022 and 2021, respectively.

The reserve for excess and obsolete inventory was $70.3 million and $69.5 million as of December 31, 2022 and 2021, respectively.

Valuation of Long-Lived Assets.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an

asset may not be recoverable.

continuing losses associated with the use of an asset or asset group, or a current expectation that an asset or asset group will be sold or disposed of before the end of its previously estimated useful life.

Recoverability is based upon projections

of anticipated future undiscounted cash flows associated with the use and eventual disposal of the long-lived asset (or asset group), as well as specific appraisal in certain instances.

Reviews occur at the lowest level for which identifiable cash

flows are largely independent of cash flows associated with other long-lived assets or asset groups.

If the future undiscounted cash flows are less than the carrying value, then the long-lived asset is considered impaired and a loss is recognized

based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments which impact these assessments relate to the expected useful lives of long-lived assets and our ability to realize any undiscounted cash flows in excess of

the carrying amounts of such assets and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic conditions, changes in operating performance and changes in

expected future cash flows.

Since judgment is involved in determining the recoverable amount of long-lived assets, there is risk that the carrying value of our long-lived assets may require adjustment in future periods.

Property, Plant and Equipment, net.

Property, plant and equipment, net consists of the following:

(in millions) December 31,

Buildings and improvements

Machinery and equipment

Gross property, plant and equipment

accumulated depreciation

Property, plant and equipment, net

Property, plant and equipment is stated at cost and depreciation is calculated by the straight-line method over the estimated useful

lives of the respective assets, which range from 10 to 25 years for buildings and improvements and three to 10 years for machinery and equipment.

Depreciation expense was $33.9 million, $31.0 million and $33.4 million for the years

ended December 31, 2022, 2021 and 2020, respectively.

Goodwill and Other Intangible Assets .

Our business acquisitions have typically resulted in the

recognition of goodwill and other intangible assets.

We follow the provisions under ASC Topic 350, Intangibles Goodwill and Other (ASC 350) as it relates to the accounting for goodwill in the Combined Financial

determine if an impairment has occurred.

We perform our annual impairment testing during the fourth quarter.

Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a

potential impairment.

We believe that there have been no other events or circumstances which would more likely than not reduce the fair value of our reporting units below its carrying value.

A reporting unit is an operating segment unless discrete

financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a component), in which case the component would be the reporting unit.

As of December 31, 2022, we had four

reporting units.

When performing our annual impairment assessment, we compare the fair value of each of our reporting units to our respective carrying value.

Goodwill is considered to be potentially impaired when the net book value of the reporting unit exceeds its estimated fair value.

Fair values are established primarily by discounting estimated future cash flows at an estimated cost of capital which

varies for each reporting unit and which, as of our most recent annual impairment assessment, ranged between 9.5% and 11.5% (a weighted average of 10.4%), reflecting the respective inherent business risk of each of the reporting units tested.

methodology for valuing our reporting units (commonly referred to as the Income Method) has not changed since the adoption of the provisions under ASC 350.

The determination of

Crane Company

(A Business of Crane Holdings, Co.)

discounted cash flows is based on the businesses strategic plans and long-range planning forecasts, which change from year to year.

The revenue growth rates included in the forecasts

represent best estimates based on current and forecasted market conditions.

Profit margin assumptions are projected by each reporting unit based on the current cost structure and anticipated net cost increases/reductions.

There are inherent

uncertainties related to these assumptions, including changes in market conditions, and management judgment is necessary in applying them to the analysis of goodwill impairment.

In addition to the foregoing, for each reporting unit, market multiples

are used to corroborate discounted cash flow results where fair value is estimated based on earnings multiples determined by available public information of comparable businesses.

While we believe we have made reasonable estimates and assumptions to

calculate the fair value of our reporting units, it is possible a material change could occur.

If actual results are not consistent with managements estimates and assumptions, goodwill and other intangible assets may then be determined to be

overstated and a charge would need to be taken against net earnings.

No impairment charges have been required during 2022, 2021 or 2020.

Changes to goodwill are as

(in millions)

Balance as of December 31, 2020

Adjustments to purchase price allocations

Currency translation

Balance as of December 31, 2021

Disposal on sale of business

Currency translation

Balance as of December 31, 2022

For the year ended December 31, 2022, adjustments within the Process Flow Technologies segment of $22.3 million relate to the

disposition of the Crane Supply business.

For the year ended December 31, 2021, adjustments within the Process Flow Technologies segment of $0.1 million

represent the finalization of the purchase price allocation for the acquisition of CIRCOR International, Inc.s Instrumentation & Sampling Business (I&S).

Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment.

carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value.

Fair value is calculated using relief from royalty method.

We amortize the cost of definite-lived intangibles

over their estimated useful lives.

In addition to annual testing for impairment of indefinite-lived intangible assets, we review all of our definite-lived

intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Examples of events or changes in circumstances could include, but are not limited to, a prolonged economic

disposed of before the end of its previously estimated useful life.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the definite-lived intangible asset (or asset

group), as well as specific appraisal in certain instances.

Reviews occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups and include estimated

The revenue growth rates included in

There are inherent

uncertainties related to these assumptions, including changes in market conditions, and managements judgment in applying them to the analysis.

If the future undiscounted cash flows are less than the carrying value, then the definite-lived

intangible asset is considered impaired and a charge would be taken against net earnings based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments that we make which impact these assessments relate to the expected

useful lives of definite-lived assets and its ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets and are affected primarily by changes in the expected use of the assets, changes in technology or

development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of definite-lived intangible assets,

there is risk that the carrying value of our definite-lived intangible assets may require adjustment in future periods.

Historical results to date have generally approximated expected cash flows for the identifiable cash flow generating level.

Crane Company

(A Business of Crane Holdings, Co.)

As of December 31, 2022, we had $71.7 million of net intangible assets, of which $21.8 million were

intangibles with indefinite useful lives, consisting of trade names.

As of December 31, 2021, we had $78.5 million of net intangible assets, of which $22.5 million were intangibles with indefinite useful lives consisting of trade

Changes to intangible assets, net are as follows:

(in millions) December 31,

Balance at beginning of period, net of accumulated amortization

Amortization expense

Currency translation and other

Balance at end of period, net of accumulated amortization

For the year ended December 31, 2020, additions to intangible assets represent the preliminary purchase price allocation related to

the January 2020 acquisition of I&S.

A summary of intangible assets follows:

December 31, 2022

December 31, 2021

(in millions)

Period of Finite

Intellectual property rights

Customer relationships and backlog

Future amortization expense associated with intangibles is expected to be:

(in millions)

2028 and after

Crane Net Investment.

Cranes net investment in the Business is presented as Crane net investment on the

Combined Balance Sheets.

The Combined Statements of Changes in Net Investment include net cash transfers between Crane and the Business as well as related party receivables and payables between the Business and other Crane affiliates that were

settled on a current basis.

Crane Company

(A Business of Crane Holdings, Co.)

Accumulated Other Comprehensive Loss.

The tables below provide the accumulated balances for each classification

of accumulated other comprehensive loss, as reflected on the Combined Balance Sheets.

(in millions)

Defined Benefit

Pension and Other

Postretirement

Balance as of January 1, 2020

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net period other comprehensive (loss) income

Balance as of December 31, 2020

Other comprehensive income (loss) before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net period other comprehensive income (loss)

Balance as of December 31, 2021

Other comprehensive income (loss) before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Net period other comprehensive income (loss)

Balance as of December 31, 2022

Net of tax benefit of $95.7 million, $119.6 million and $142.4 million for December 31, 2022, 2021

and 2020, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for

the years ended December 31, 2022, 2021 and 2020.

Amortization of pension components have been recorded within Miscellaneous income, net on the Combined Statements of Operations.

Amount Reclassified from Accumulated Other

Comprehensive Loss

(in millions) December 31,

Amortization of pension items:

Prior service costs

Total before tax

Total reclassifications for the period

Recent Accounting Pronouncements

Business considered the applicability and impact of all Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the

Businesss Combined Statement of Operations, Balance Sheets and Cash Flows.

Related Parties

Historically, the Business has been managed and operated in the normal course of business with other affiliates of Crane.

Accordingly, certain shared costs have been

allocated to the Business and reflected as expenses in the Combined Financial Statements.

Allocated Centralized Costs.

The Combined Financial Statements

have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Crane.

Crane incurred

corporate costs for services provided to the Business as well as other Crane businesses.

These services include treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services.

associated with these services generally include all payroll and benefit costs, as well as overhead costs related to the support functions.

Crane also allocated costs associated with corporate insurance coverage and medical, pension, post-retirement

and other health plan costs for employees participating in Crane sponsored plans.

Allocations are based on several utilization measures including headcount, proportionate usage and relative net sales.

All such amounts have been deemed to have been

incurred and settled by the Business in the period in which the costs were recorded.

Crane Company

(A Business of Crane Holdings, Co.)

The allocated functional service expenses and general corporate expenses for the years ended December 31, 2022,

2021 and 2020 were $90.4 million, $62.2 million and $37.6 million, respectively, and are included in Selling, general and administrative in the Combined Statements of Operations.

Included in the allocated functional

service expenses and general corporate expenses were $21.7 million and $0.8 million of Separation-related costs for the year ended December 31, 2022 and 2021, respectively.

There were no Separation-related costs for the year ended

December 31, 2020.

In the opinion of management of the Parent and the Business, the expense and cost allocations have been determined on a basis considered to

be a reasonable reflection of the utilization of services provided or the benefit received by the Business during the periods presented.

The amounts that would have been, or will be incurred, on a stand-alone basis could differ from the amounts

allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors.

Management does not believe, however, that it is practicable to estimate what these expenses would have been had the

Business operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities.

In addition, the future results of operations, financial position and cash flows could differ materially

from the historical results presented herein.

Cash Management and Financing.

The Business participated in Cranes centralized cash management and daily

Disbursements are made through centralized accounts payable systems which were operated by Crane.

Cash receipts are transferred to centralized accounts, which were also maintained by Crane.

As cash is received and disbursed by Crane, it

is accounted for by the Business through Crane net investment.

Historically, Crane has centrally managed and swept cash for most domestic and certain European entities.

As such, the Business cash balance includes all cash on hand for all Crane

entities that participate in the centralized cash management program, as well as those Crane Company legal entities that do not participate in the centralized cash management program.

Accounts Receivable and Payable.

Certain related party transactions between the Business and Parent have been included within Crane net investment in

the Combined Balance Sheets in the historical periods presented when the related party transactions are not settled in cash.

Crane net investment includes related party loans receivable due from Crane and its affiliates of $232.1 million and

$335.0 million as of December 31, 2022 and 2021, respectively.

Crane net investment includes related party loans payable due to Crane and its affiliates of $27.2 million and $71.9 million as of December 31, 2022 and 2021,

respectively.

For the years ended December 31, 2022, 2021 and 2020, we recorded related party interest income related to the loan activity with Crane and its affiliates of $14.4 million, $16.1 million and $15.9 million,

respectively, which is included in the Business results as Related party interest income in the Combined Statements of Operations.

The total effect of the settlement of these related party transactions is reflected with Net

transfers to Parent as a financing activity in the Combined Statements of Cash Flows.

Additionally, certain transactions between the Business and other Crane

affiliates are cash-settled on a current basis and, therefore, are reflected in the Combined Balance Sheets.

Accounts receivable, net includes $1.7 million and $2.3 million as of December 31, 2022 and 2021, respectively, and Accounts

payable includes $0.1 million and $0.6 million as of December 31, 2022 and 2021, respectively, related to such transactions.

Acquisitions are accounted for in accordance with ASC Topic 805, Business Combinations (ASC 805).

Accordingly, we make an initial allocation

of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed liabilities.

We obtain this information during due diligence and through other sources.

In the months after closing,

as we obtain additional information about these assets and liabilities, including through tangible and intangible asset appraisals, we are able to refine estimates of fair value and more accurately allocate the purchase price.

Only items identified

as of the acquisition date are considered for subsequent adjustment to the purchase price allocation.

We make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

In order to allocate the consideration transferred for our acquisitions, the fair values of all identifiable assets and liabilities must be established.

For accounting

and financial reporting purposes, fair value is defined under ASC Topic 820, Fair Value Measurement and Disclosure as the price that would be received upon the sale of an asset or the amount paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability.

Additionally, fair value measurements for an asset

assume the highest and best use of that asset by market participants.

Use of different estimates and judgments could yield different results.

Crane Company

(A Business of Crane Holdings, Co.)

Instrumentation & Sampling Business Acquisition.

On January 31, 2020, we completed

the acquisition of I&S for $172.3 million on a cash-free and debt-free basis, subject to a later adjustment reflecting I&S net working capital, cash, the assumption of certain debt-like items, and I&S transaction expenses.

We funded the acquisition through short-term borrowings consisting of $100 million of commercial paper and $67.0 million from our revolving credit

facility, and cash on hand.

In August 2020, we received $3.1 million related to the final working capital adjustment which resulted in net cash paid of $169.2 million.

I&S designs, engineers, and manufactures a broad range of critical fluid control instrumentation and sampling solutions used in severe service environments which

complements our existing portfolio of chemical, refining, petrochemical and upstream oil and gas applications.

I&S has been integrated into the Process Flow Technologies segment.

The amount allocated to goodwill reflects the expected sales

synergies, manufacturing efficiency and procurement savings.

Goodwill from this acquisition is not deductible for tax purposes.

Allocation of Consideration

Transferred to Net Assets Acquired.

The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S.

The fair value of certain assets and liabilities has

been completed as required by ASC 805.

Net assets acquired (in millions)

Total current assets

Property, plant, and equipment

Intangible assets

Total assets acquired

Total current liabilities

Other liabilities

Total assumed liabilities

Net assets acquired

The amounts allocated to acquired intangible assets, and their associated weighted average useful lives which were determined based on

the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:

Intangible Assets:

(in millions)

Intangible Fair

Weighted Average

Life in Years

Trademarks/trade names

Customer relationships

Total acquired intangible assets

The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach.

This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty to exploit the related

benefits of this asset.

Therefore, a portion of I&Ss earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership.

The trade names

are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 13 years.

The fair values of

the customer relationships and backlog intangible assets were determined by using an income approach which is a commonly accepted valuation approach.

Under this approach, the net earnings attributable to the asset or liability being

measured are isolated using the discounted projected net cash flows.

These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being

Both the amount and the duration of the cash flows are considered from a market participant perspective.

Our estimates of market participant net cash flows considered historical and projected pricing, operational performance including

market participant synergies, aftermarket retention, product life cycles, material and labor pricing, and other relevant customer, contractual and market factors.

Where appropriate, the net cash flows were adjusted to reflect the potential attrition

of existing customers in the future, as existing customers are expected to decline over time.

The attrition-adjusted future cash flows are then discounted to present value using an appropriate discount rate.

The customer relationship asset is being

amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 14 years.

Crane Company

(A Business of Crane Holdings, Co.)

Supplemental Pro Forma Data.

I&S results of operations have been included in our Combined Financial

Statements for the period after the completion of the acquisition on January 31, 2020.

Combined pro forma revenue and net income attributable to Crane net investment have not been presented since the impact is not material to our financial

results for either prior period.

Acquisition-Related Costs.

Acquisition-related costs are being expensed as incurred.

For the year ended December 31,

2020, we recorded $6.4 million of integration and transaction costs.

Acquisition-related costs are recorded within Acquisition-related and integration charges in our Combined Statements of Operations.

Segment Information

In accordance with ASC Topic 280, Segment

Reporting, for purposes of segment performance measurement, we do not allocate to the business segments items that are of a non-operating nature, including charges which occur from time to time related

to our asbestos liability and our legacy environmental liabilities, such items are not related to current business activities;

or corporate organizational and functional expenses of a governance nature.

Corporate expenses consist of corporate office

expenses including compensation, benefits, occupancy, depreciation, and other administrative costs.

Assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, deferred tax assets,

certain property, plant and equipment, and certain other assets.

The accounting policies of the segments are the same as those described in the summary of

significant accounting policies.

We account for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

segments are reported on the same basis used internally for evaluating performance and for allocating resources.

We currently have three reporting segments:

Aerospace & Electronics, Process Flow Technologies, and Engineered Materials.

A brief description of each of our current segments is as follows:

Aerospace & Electronics

The Aerospace & Electronics

segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace, and the military aerospace, defense and space markets.

Its brands have decades of proven experience, and in

many cases invented the critical technologies in their respective markets.

The business designs and delivers proven systems, reliable components, and flexible power solutions that excel in tough and mission-critical environments.

services are organized into six integrated solutions:

Sensing Components & Systems, Electrical Power Solutions, Fluid Management Solutions, Landing & Control Systems, and Microwave Solutions.

Process Flow Technologies

The Process Flow Technologies segment is a

provider of highly engineered fluid handling equipment for mission critical applications that require high reliability.

The segment is comprised of Process Valves and Related Products, Commercial Valves, and Pumps and Systems.

Process Valves and

Related Products include on/off valves and related products for critical and demanding applications in the chemical, oil & gas, power, and general industrial end markets globally.

Commercial Valves includes the manufacturing and

distribution of valves and related products for the non-residential construction, general industrial, and to a lesser extent, municipal markets.

Pumps and Systems include pumps and related products primarily

for water and wastewater applications in the industrial, municipal, commercial and military markets.

Engineered Materials

The Engineered Materials segment manufactures fiberglass-reinforced plastic (FRP) panels and coils, primarily for use in the manufacturing of recreational

vehicles (RVs), truck bodies and trailers (Transportation), with additional applications in commercial and industrial buildings (Building Products).

Crane Company

(A Business of Crane Holdings, Co.)

Financial information by reportable segment is set forth below:

(in millions) December 31,

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

TOTAL NET SALES

Operating profit:

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

TOTAL OPERATING PROFIT (a)

Capital expenditures:

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

TOTAL CAPITAL EXPENDITURES

Depreciation and amortization:

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

TOTAL DEPRECIATION AND AMORTIZATION

For the year ended December 31, 2022, operating profit includes a loss on divestiture of asbestos-related assets and

liabilities of $162.4 million and net restructuring charges of $4.2 million.

For the year ended December 31, 2021, operating profit included a restructuring gain of $13.2 million.

For the year ended December 31, 2020,

operating profit included acquisition-related and integration charges of $6.4 million and net restructuring charges of $13.2 million.

See Note 13, Commitments and Contingencies for discussion of the divestiture of

asbestos-related assets and liabilities.

See Note 16, Restructuring Charges for discussion of the restructuring charges.

by geographic region:

(in millions) December 31,

United States

United Kingdom

Continental Europe

Other international

TOTAL NET SALES

Net sales by geographic region are based on the destination of the sale.

Crane Company

(A Business of Crane Holdings, Co.)

Balance sheet items by reportable segment is set forth below:

(in millions) December 31,

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

TOTAL GOODWILL

Aerospace & Electronics

Process Flow Technologies

Engineered Materials

Long-lived assets by geographic region:

(in millions) December 31,

Long-lived assets:

United States

Other international

TOTAL LONG-LIVED ASSETS

Long-lived assets, net by geographic region are based on the location of the business unit.

Disaggregation of Revenues

The following table presents net sales disaggregated by product line for each segment:

(in millions) December 31,

Aerospace & Electronics:

Commercial Original Equipment

Military Original Equipment

Commercial Aftermarket Products

Military Aftermarket Products

Total Aerospace & Electronics

Process Flow Technologies:

Process Valves and Related Products

Commercial Valves

Pumps and Systems

Total Process Flow Technologies

Engineered Materials

FRP - Recreational Vehicles

FRP - Building Products

FRP - Transportation

Total Engineered Materials

Total Net Sales

Crane Company

(A Business of Crane Holdings, Co.)

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled, which we also

refer to as total backlog.

As of December 31, 2022, total backlog was $998.1 million.

We expect to recognize approximately 86% of our remaining performance obligations as revenue in 2023 and the remaining 14% by 2024.

Contract Assets and Contract Liabilities

Contract assets represent unbilled

amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

Contract liabilities

represent advance payments from customers.

Revenue related to contract liabilities is recognized when control is transferred to the customer.

We report contract assets, which are included within Other current assets in our Combined

Balance Sheets, and contract liabilities, which are included within Accrued liabilities on our Combined Balance Sheets, on a contract-by-contract net basis

at the end of each reporting period.

Net contract assets and contract liabilities consisted of the following:

(in millions) December 31,

Contract assets

Contract liabilities

During 2022, we recognized revenue of $28.6 million related to contract liabilities as of December 31, 2021.

Research and Development

Research and development costs are expensed when

incurred and are included in Selling, general and administrative in our Combined Statements of Operations.

(in millions) December 31,

Research and Development Costs

Pension and Postretirement Benefits

Business sponsors numerous single-employer international employee benefit plans.

In addition, certain of our employees participate in employee benefit plans sponsored by Crane which include participants of other Crane businesses (the Shared

We account for our participation in the Shared Plans as multiple employer benefit plans.

In the United States, Crane sponsors a defined benefit pension plan that covers approximately 15% of all U.S.

Crane Company employees.

Effective January 1, 2013,

pension eligible non-union employees no longer earn future benefits in the domestic defined benefit pension plan.

The benefits are based on years of service and compensation on a final average pay basis,

except for certain hourly employees where benefits are fixed per year of service.

Charges to expense are based upon costs computed by an independent actuary.

Contributions are intended to provide for future benefits earned to date.

Additionally, a

number of the Businesss non-U.S.

subsidiaries sponsor defined benefit pension plans that cover approximately 11% of all non-U.S.

Crane Company employees.

benefits are typically based upon years of service and compensation.

Most of these plans are funded by Crane contributions to pension funds, which are held for the sole benefit of plan participants and beneficiaries.

In December 2022, we settled the pension plan for the salaried non-bargaining employees of Crane Canada Co.

and recognized a

loss of $7.0 million, net of tax.

Excess plan assets have been reclassified to current receivables and will be recognized upon final approval from regulatory authorities which is expected in 2023.

We estimate that the Business will receive a

distribution of approximately $43 million after distributions to plan participants.

Crane Company

(A Business of Crane Holdings, Co.)

Postretirement Plans

Postretirement health care and life insurance benefits are provided for certain employees hired before January 1, 1990, who meet minimum age and service

requirements.

A summary of the projected benefit obligations, fair value of plan assets and funded status is as follows:

Pension Benefits

Postretirement Benefits

(in millions) December 31,

Change in benefit obligation:

Benefit obligation at beginning of year

Interest cost

Actuarial (gain) loss

Benefits paid

Foreign currency exchange and other

Administrative expenses paid

Benefit obligation at end of year

Change in plan assets:

Fair value of plan assets at beginning of year

Actual return on plan assets

Employer contributions

Benefits paid

Foreign currency exchange and other

Administrative expenses paid

Fair value of plan assets at end of year

Funded status

In the U.S., 2022 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

countries, 2022 actuarial gains in the projected benefit obligation were primarily the result of increases in discount rates.

Other sources of gains or losses such as plan experience, updated census

data, changes to forecast inflation and minor adjustments to actuarial assumptions generated combined gains of 3% of expected year end obligations.

2021 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

Other sources of gains or losses such as plan experience, updated census data and minor adjustments to actuarial assumptions

generated combined losses of less than 1% of expected year end obligations.

In the Non-U.S.

countries, 2021 actuarial gains in the projected benefit obligation were primarily the result of increases in

discount rates.

Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation and minor adjustments to actuarial assumptions generated combined gains of 2% of expected year end obligations.

Amounts recognized on our Combined Balance Sheets consist of:

Pension Benefits

Postretirement Benefits

(in millions) December 31,

Current liabilities

Accrued pension and postretirement benefits

Funded status

Crane Company

(A Business of Crane Holdings, Co.)

Amounts recognized in accumulated other comprehensive loss consist of:

Pension Benefits

Postretirement Benefits

(in millions) December 31,

Net actuarial loss (gain)

Prior service credit

Total recognized in accumulated other comprehensive loss

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the U.S.

plans, are as follows:

Pension Obligations/Assets

(in millions) December 31,

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:

(in millions) December 31,

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets

Components of net periodic (benefit) cost are as follows:

Pension Benefits

Postretirement Benefits

(in millions) For the year ended December 31,

Net Periodic (Benefit) Cost:

Interest cost

Expected return on plan assets

Amortization of prior service cost

Amortization of net loss

Recognized curtailment (gain) loss

Settlement costs

Net periodic (benefit) cost

The weighted average assumptions used to determine benefit obligations are as follows:

Pension Benefits

Postretirement Benefits

For the year ended December 31,

Discount rate

Rate of compensation increase

Interest credit rate

Rate of compensation increase

Interest credit rate

Crane Company

(A Business of Crane Holdings, Co.)

The weighted average assumptions used to determine net periodic benefit cost are as follows:

Pension Benefits

Postretirement Benefits

For the year ended December 31,

Discount rate

Expected rate of return on plan assets

Rate of compensation increase

Interest credit rate

Discount rate

Expected rate of return on plan assets

Rate of compensation increase

Interest credit rate

The long-term expected rate of return on plan assets assumptions were determined with input from independent investment consultants and

plan actuaries, utilizing asset pricing models and considering historical returns.

The discount rates used by us for valuing pension liabilities are based on a review of high-quality corporate bond yields with maturities approximating the remaining

life of the projected benefit obligations.

plan, the 6.50% expected rate of return on assets assumption for 2022 reflected a long-term target comprised

of an asset allocation range of 25%75% equity securities, 15%35% fixed income securities, 10%35% alternative assets and 0%10% cash and cash equivalents.

As of December 31, 2022, the actual asset allocation for the U.S.

plan was 64.3% equity securities, 22.1% fixed income securities, 11.4% alternative assets and 2.1% cash and cash equivalents.

For the non-U.S.

plans, the 4.85% expected rate of return on assets assumption for 2022 reflected a weighted average of the long-term asset allocation targets for our various non-U.S.

As of December 31, 2022, the actual weighted average asset allocation for the non-U.S.

plans was 16.2% equity securities, 35.3% fixed income securities, 40.6% alternative assets/other and 7.8% cash

and cash equivalents.

The assumed health care cost trend rates are as follows:

Health care cost trend rate assumed for next year

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)

Year that the rate reaches the ultimate trend rate

Assumed health care cost trend rates have a significant effect on the amounts reported for our health care plans.

Our pension plan target allocations and weighted average asset

allocations by asset category are as follows:

Asset Category December 31,

Target Allocation

Actual Allocation

Equity securities

Fixed income securities

Alternative assets/other

Cash and money market

Independent investment consultants are retained to assist in executing the plans investment strategies.

Several factors are

evaluated in determining if an investment strategy will be implemented in our pension trusts.

These factors include, but are not limited to, investment style, investment risk, investment manager performance and costs.

We periodically review

investment managers and their performance in relation to our plans investment objectives.

Crane Company

(A Business of Crane Holdings, Co.)

The primary investment objective of our various pension trusts is to maximize the value of plan assets, focusing on

capital preservation, current income and long-term growth of capital and income.

The plans assets are typically invested in a broad range of equity securities, fixed income securities, alternative assets, and cash instruments.

Equity securities include investments in large, mid, and small-capitalization companies located in both developed countries and emerging markets around the world.

income securities include government bonds of various countries, corporate bonds that are primarily investment-grade, and mortgage-backed securities.

Alternative assets include investments in real estate and hedge funds employing a wide variety of

In 2021, equity securities include Crane common stock, which represents 4.5% of plan assets as of December 31, 2021.

There were no holdings of Crane common stock in 2022.

The fair value of our pension plan assets as of December 31, 2022, by asset category, are as follows:

(in millions)

Active Markets

for Identical

Net Asset Value

(NAV) Practical

Expedient (a)

Cash Equivalents and Money Markets

Common Stocks:

Actively Managed U.S.

Commingled and Mutual Funds:

Fixed Income, Government and Corporate

Registered Investment Company

Fixed income, Government and Corporate

International Balanced Funds

Property Funds

Alternative Investments:

Insurance/Annuity Contract(s)

Hedge funds and LDI

International Property funds

Total Fair Value

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not

classified in the fair value hierarchy.

The fair value of our pension plan assets as of December 31, 2021, by asset category, are as

(in millions)

Active Markets

for Identical

Net Asset Value

(NAV) Practical

Expedient (a)

Cash Equivalents and Money Markets

Common Stocks:

Actively Managed U.S.

Fixed Income Bonds and Notes

Commingled and Mutual Funds:

Fixed Income, Government and Corporate

Registered Investment Company

Fixed Income, Government and Corporate

International Balanced Funds

Alternative Investments:

Insurance/Annuity Contract(s)

Hedge Funds and LDI

International Property Funds

Total Fair Value

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not

classified in the fair value hierarchy.

Crane Company

(A Business of Crane Holdings, Co.)

We expect, based

on current actuarial calculations, to contribute cash of approximately $18.1 million to the defined benefit pension plans during 2023.

Cash contributions in subsequent years will depend on a number of factors including the investment

performance of plan assets.

Estimated Future Benefit Payments

following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Estimated future payments (in millions)

Postretirement

Total payments

Defined Contribution Plans

Crane sponsors

savings and investment plans that are available to our eligible employees including employees of our subsidiaries.

We made contributions to the plans of $9.0 million, $8.0 million and $8.4 million in 2022, 2021 and 2020, respectively.

In addition to participant deferral contributions and company matching contributions on those deferrals, we provide a 3%

non-matching contribution to eligible participants.

We made non-matching contributions to these plans of $10.4 million, $9.7 million and $10.2 million in

2022, 2021 and 2020, respectively.

Stock-Based Compensation Plans

Crane Company participates in Cranes stock-based compensation plans which are used to provide long-term incentive compensation through stock options, restricted

share units, performance-based restricted share units and deferred stock units.

Stock-based compensation expense reflected in the accompanying Combined Financial Statements relates to stock plan awards of Crane awarded to Crane Company related

employees and not stock awards of Crane Company as Crane Company does not grant stock awards.

The following disclosures represent stock-based compensation expenses attributable to Crane Company based on the awards and terms previously granted under

Cranes stock-based compensation plans to Crane Company employees.

Accordingly, the amounts presented are not necessarily indicative of future awards and do not necessarily reflect the results that Crane Company would have experienced as an

independent company for the periods presented.

As of December 31, 2022, Crane had stock-based compensation awards outstanding under the following Crane

shareholder-approved plans:

the 2013 Stock Incentive Plan (the 2013 Plan), 2018 Stock Incentive Plan (the 2018 Plan) and 2018 Amended and Restated Stock Incentive Plan (2018 Amended & Restated Plan),

applicable to employees and non-employee directors.

The 2013 Plan was approved by the Crane Board of Directors and

stockholders at the annual meeting in 2013.

The 2013 Plan originally authorized the issuance of up to 9,500,000 shares of stock pursuant to awards under the plan.

In 2018, in view of the limited number of shares remaining available under the 2013

Plan, the Crane Board of Directors and stockholders approved the adoption of the 2018 Plan which authorized the issuance of up to 6,500,000 shares of Crane stock.

In 2021, the Crane Board of Directors and stockholders approved the adoption of the

2018 Amended and Restated Stock Incentive Plan which authorized the issuance of up to 4,710,000 shares of Crane stock.

No further awards will be made under the 2013 Plan or 2018 Plan.

The stock incentive plans are used to provide long-term incentive compensation through stock options, restricted share units, performance-based restricted share units

and deferred stock units.

Crane Company

(A Business of Crane Holdings, Co.)

Stock Options

granted under the Stock Incentive Plan to officers and other key employees and directors at an exercise price equal to the closing price on the date of grant.

Unless otherwise determined by the Compensation Committee which administers the plan,

options become exercisable at a rate of 25% after the first year, 50% after the second year, 75% after the third year and 100% after the fourth year from the date of grant.

All options granted to directors and options granted to officers and

employees after 2014 expire 10 years after the date of grant.

Crane determines the fair value of each grant using the Black-Scholes option pricing model.

weighted average assumptions for grants made during the years ended December 31, 2022, 2021 and 2020 are as follows:

Dividend yield

Risk-free interest rate

Expected lives in years

Expected dividend yield is based on Cranes dividend rate.

Expected stock volatility was determined based upon the historical

volatility for the four-year period preceding the date of grant.

The risk-free interest rate was based on the yield curve in effect at the time the options were granted, using U.S.

constant maturities over the expected life of the option.

expected lives of the awards represent the period of time that options granted are expected to be outstanding.

Activity in Cranes stock option plans related

to our employees for the year ended December 31, 2022 were as follows:

Option Activity

Exercise Price

Options outstanding as of January 1, 2022

Options outstanding as of December 31, 2022

Options exercisable as of December 31, 2022

Included in our share-based compensation was expense recognized for our stock option awards of $3.2 million, $4.2 million and

$4.7 million in 2022, 2021 and 2020, respectively.

These amounts exclude $1.9 million, $2.0 million and $1.9 million in 2022, 2021 and 2020, respectively, of share-based compensation expense recognized for our stock option awards

related to corporate employees that have been allocated to other affiliates of Crane.

The weighted average fair value of options granted during 2022, 2021 and 2020

was $32.51, $20.82 and $15.24, respectively.

The total fair value of shares vested during 2022, 2021 and 2020 was $5.1 million, $5.8 million and $5.7 million, respectively.

The total intrinsic value of options exercised during 2022,

2021 and 2020 was $11.3 million, $35.7 million and $3.6 million, respectively.

The aggregate intrinsic value of exercisable options was $24.9 million, $31.7 million and $28.6 million as of December 31, 2022, 2021

and 2020, respectively.

The total cash received from these option exercises during 2022, 2021 and 2020 was $21.2 million, $24.9 million and

$7.7 million, respectively and is reflected in the Combined Statements of Cash Flows as Net Transfers to Parent within financing activities.

The tax benefit realized for the tax deductions from option exercises and vesting of

restricted share units was $0.9 million, $3.8 million and $0.3 million as of December 31, 2022, 2021 and 2020, respectively.

December 31, 2022, there was $5.6 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted average period of 1.29 years.

Crane Company

(A Business of Crane Holdings, Co.)

Restricted Share Units and Performance-Based Restricted Share Units

Restricted share units vest at a rate of 25% after the first year, 50% after the second year, 75% after the third year and 100% after the fourth year from the date of

grant and are subject to forfeiture restrictions which lapse over time.

The vesting of performance-based restricted share units is determined in three years based on relative total shareholder return for Crane compared to the S&P Midcap 400

Capital Goods Group, with payout potential ranging from 0% to 200% but capped at 100% if our three-year total shareholder return is negative.

Included in our

share-based compensation was expense recognized for our restricted share unit and performance-based restricted share unit awards of $11.7 million, $12.1 million and $10.6 million in 2022, 2021 and 2020, respectively.

These amounts

exclude $7.4 million, $6.6 million and $5.1 million in 2022, 2021 and 2020, respectively, of share-based compensation expense recognized for our restricted share unit and performance-based restricted share unit awards related to

corporate employees that have been allocated to other affiliates of Crane.

The tax benefit (detriment) for the vesting of the restricted share units was $1.3 million, $(0.1) million and $0.1 million as of December 31, 2022, 2021 and

2020, respectively.

As of December 31, 2022, there was $24.4 million of total future compensation cost related to restricted share unit and

performance-based restricted share unit awards, to be recognized over a weighted average period of 1.91 years.

Changes in Cranes restricted share units

related to our employees for the year ended December 31, 2022 were as follows:

Restricted Share Unit Activity

Restricted share units as of January 1, 2022

Restricted share units granted

Restricted share units vested

Restricted share units forfeited

Performance-based restricted share units granted

Performance-based restricted share units vested

Performance-based restricted share units forfeited

Restricted share units as of December 31, 2022

Arrangements that explicitly or

implicitly relate to property, plant and equipment are assessed at inception to determine if the arrangement is or contains a lease.

Generally, we enter into operating leases as the lessee and recognize right-of-use assets and lease liabilities based on the present value of future lease payments over the lease term.

lease certain vehicles, equipment, manufacturing facilities, and non-manufacturing facilities.

We have leases with both lease components and non-lease components, such

as common area maintenance, utilities, or other repairs and maintenance.

For all asset classes, we applied the practical expedient to account for each separate lease component and its associated non-lease

component(s) as a single lease component.

We identify variable lease payments, such as maintenance payments based on actual activities performed or costs incurred,

at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum.

Certain leases include options to

renew for an additional term or company-controlled options to terminate.

We generally determine it is not reasonably certain to assume the exercise of renewal options because there is no economic incentive to renew.

As termination options often

include penalties, we generally determine it is reasonably certain that termination options will not be exercised because there is an economic incentive not to terminate.

Therefore, these options generally do not impact the lease term or the

determination or classification of the right-of-use asset and lease liability.

the third quarter of 2017, we entered a seven-year lease for a used airplane which includes a maximum residual value guarantee of $11.1 million if the fair value of the airplane is less than $14.4 million at the end of the lease term.

do not believe it is probable that any amount will be owed under this guarantee.

Therefore, no amount related to the residual value guarantee is included in the lease payments used to measure the right-of-use asset and lease liability.

We have not entered any other leases where a residual value guarantee is provided to the lessor.

Crane Company

(A Business of Crane Holdings, Co.)

We do not enter arrangements where restrictions or covenants are imposed by the lessor that, for example, relate to

incurring additional financial obligations.

Furthermore, we have not entered into any significant sublease arrangements.

We use our collateralized incremental

borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification.

The rate implicit in the lease is generally unknown, as we generally operate in the

capacity of the lessee.

Our Combined Balance Sheet includes the following related to leases:

(in millions) December 31,

Classification

Operating right-of-use

Current lease liabilities

Accrued liabilities

Long-term lease liabilities

Other liabilities

Total lease liabilities

The components of lease cost were as follows:

(in millions) December 31,

Operating lease cost

Variable lease cost

Total lease cost

The weighted average remaining lease terms and discount rates for our operating leases were as follows:

(in millions) December 31,

Weighted average remaining lease term (in years) operating leases

Weighted average discount rate operating leases

Supplemental cash flow information related to our operating leases was as follows for periods ended December 31, 2022, 2021 and

(in millions) December 31,

Cash paid for amounts included in measurement of operating lease liabilities operating cash

Right-of-use assets obtained

in exchange for new operating lease liabilities

Future minimum operating lease payments are as follows:

(in millions)

December 31, 2022

Total future minimum operating lease payments

Imputed interest

Present value of lease liabilities reported

Crane Company

(A Business of Crane Holdings, Co.)

Provision for Income Taxes

Our income before taxes is as follows:

(in millions) For the year ended December 31,

Our provision (benefit) for income taxes consists of:

(in millions) For the year ended December 31,

state and local tax

Total current

state and local tax

Total deferred

Total provision for income taxes*

Included in the above amounts are excess tax benefits from share-based compensation of $2.2 million,

$3.7 million, and $0.4 million in 2022, 2021, and 2020, respectively, which were reflected as reductions in our provision for income taxes in 2022, 2021 and 2020.

A reconciliation of the statutory U.S.

federal tax rate to our effective tax rate is as follows:

For the year ended December 31,

Statutory U.S.

federal tax rate

Increase (reduction) from:

State and local taxes, net of federal benefit

Income taxed at non-US rates

income inclusion, net of tax credits

research and development tax credit

U.S deduction for foreign derived intangible Income

Deferred tax asset related to the sale of a subsidiary

Nondeductible loss due to Asbestos Divestiture

Effective tax rate

Tax Related to Comprehensive Income

2022, 2021 and 2020, tax provision (benefit) of $8.4 million, $26.7 million and $(12.5) million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other

comprehensive loss.

Crane Company

(A Business of Crane Holdings, Co.)

Deferred Taxes and Valuation Allowances

The components of deferred tax assets and liabilities included in our Combined Balance Sheets are as follows:

(in millions) December 31,

Deferred tax assets:

Asbestos-related liabilities

Tax loss and credit carryforwards

Pension and post-retirement benefits

Capitalized research and development

Accrued bonus and stock based compensation

valuation allowance

Total deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Basis difference in intangible assets

Basis difference in fixed assets

Deferred tax on non-U.S.

unremitted earnings

Total deferred tax liabilities

Net deferred tax asset (liability)

Balance Sheet classification:

Long-term deferred tax assets

Long-term deferred tax liability

Net deferred tax asset (liability)

As of December 31, we have made the following determinations with regard to our non-U.S.

(in millions)

Not permanently

Amount of earnings

Associated tax

Determination of U.S.

income taxes and non-U.S.

withholding taxes due upon

repatriation of this $400.7 million of earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs.

As of December 31, 2022, we had U.S.

federal, U.S.

state and non-U.S.

tax loss and credit carryforwards that will expire,

if unused, as follows:

Year of expiration (in millions)

Total tax carryforwards

Deferred tax asset on tax carryforwards

Valuation allowance on tax carryforwards

Net deferred tax asset on tax carryforwards

As of December 31, 2022 and 2021, we determined that it was more likely than not that $73.4 million and $82.2 million,

respectively, of our deferred tax assets related to tax loss and credit carryforwards will not be realized.

As a result, we recorded a valuation allowance against these deferred tax assets.

We also determined that it is more likely than not that a

portion of the benefit related to U.S.

state and non-U.S.

deferred tax assets other than tax loss and credit carryforwards will not be realized.

Accordingly, as of December 31, 2022 and 2021, a valuation

allowance of $2.2 million and $19.1 million, respectively, was established against these U.S.

state and non-U.S.

deferred tax assets.

Our total valuation allowance as of December 31, 2022 and

2021, was $75.6 million and $101.3 million, respectively.

Crane Company

(A Business of Crane Holdings, Co.)

Unrecognized Tax Benefits

reconciliation of the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:

(in millions)

Balance of liability as of January 1,

Increase as a result of tax positions taken during a prior year

Decrease as a result of tax positions taken during a prior year

Increase as a result of tax positions taken during the current year

Decrease as a result of settlements with taxing authorities

Reduction as a result of a lapse of the statute of limitations

Balance of liability as of December 31,

As of December 31, 2022, 2021 and 2020, the amount of our unrecognized tax benefits that, if recognized, would affect our effective

tax rate were $22.4 million, $22.7 million and $23.8 million, respectively.

The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and

(2) interest expense, net of deferred taxes.

We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax

During the years ended December 31, 2022, 2021 and 2020, we recognized interest and penalty (income) expense of $0.3 million, $(0.1) million and $(0.5) million, respectively, in our Combined Statements of Operations.

December 31, 2022 and 2021, we had accrued $3.7 million and $3.4 million, respectively, of interest and penalties related to unrecognized tax benefits on our Combined Balance Sheets.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $4.2 million due to settlements of income tax

examinations, the expiration of statutes of limitations or other resolution of uncertainties.

However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax

expense or benefit in the period in which such matters are effectively settled.

Income Tax Examinations

Our income tax returns are subject to examination by the U.S.

federal, U.S.

state and local, and non-U.S.

tax authorities.

few exceptions, the years for which we filed returns that are open to examination are as follows:

state and local

Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2013 through 2018), Canada (2013

through 2015) and Luxembourg (2017 through 2018).

Accrued Liabilities

Accrued liabilities consist of:

(in millions) December 31,

Employee related expenses

Current lease liabilities

Contract liabilities

Crane Company

(A Business of Crane Holdings, Co.)

Other Liabilities

(in millions) December 31,

Environmental

Long-term lease liabilities

Commitments and Contingencies