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Item 1. Financial Statements

2024-05-01 compared with 2023-11-01 · 235 added, 315 removed, 487 unchanged (53% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions, except per share data) 2024 2023

3 unchanged sentences

Selling, general and administrative 131.1 129.4

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

Operating profit (loss) 76.3 ( 117.2 ) 216.9 ( 10.7 )

Other income (expense):

Operating profit 89.4 77.5

Other (expense) income:

Interest income 1.2 0.9

Interest expense ( 7.2 ) ( 6.6 )

Gain on sale of business — 3.8 — 232.5

Miscellaneous income (expense), net 1.3 4.5 ( 0.5 ) 20.6

Total other (expense) income, net ( 2.0 ) 6.7 ( 14.0 ) 251.0

Income (loss) from continuing operations before income taxes 74.3 ( 110.5 ) 202.9 240.3

Miscellaneous expense, net ( 1.3 ) ( 0.5 )

Total other expense, net ( 7.3 ) ( 6.2 )

Income from continuing operations before income taxes 82.1 71.3

Provision for income taxes 17.3 15.4

Net income (loss) from continuing operations attributable to common shareholders 55.2 ( 120.9 ) 154.4 131.8

Net income from continuing operations attributable to common shareholders 64.8 55.9

Income from discontinued operations, net of tax (Note 3) — 49.8

Net income (loss) attributable to common shareholders $ 55.2 $ ( 59.3 ) $ 206.5 $ 303.9

Earnings (loss) per basic share:

Earnings (loss) per basic share from continuing operations $ 0.97 $ ( 2.16 ) $ 2.72 $ 2.33

Net income attributable to common shareholders $ 64.8 $ 105.7

Earnings per basic share:

Earnings per basic share from continuing operations $ 1.14 $ 0.99

Earnings per basic share from discontinued operations — 0.88

Earnings (loss) per basic share $ 0.97 $ ( 1.06 ) $ 3.64 $ 5.38

Earnings (loss) per diluted share:

Earnings (loss) per diluted share from continuing operations $ 0.96 $ ( 2.16 ) $ 2.69 $ 2.30

Earnings per basic share $ 1.14 $ 1.87

Earnings per diluted share:

Earnings per diluted share from continuing operations $ 1.12 $ 0.98

Earnings per diluted share from discontinued operations — 0.86

Earnings (loss) per diluted share $ 0.96 $ ( 1.06 ) $ 3.60 $ 5.30

Earnings per diluted share $ 1.12 $ 1.84

Average shares outstanding:

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2024 2023

Net income (loss) before allocation to noncontrolling interests $ 55.2 $ ( 59.3 ) $ 206.5 $ 303.9

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

Net income before allocation to noncontrolling interests $ 64.8 $ 105.7

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

Currency translation adjustment ( 12.4 ) 12.7

Changes in pension and postretirement plan assets and benefit obligation, net of tax 3.0 2.7

Other comprehensive (loss) income, net of tax ( 12.1 ) ( 75.4 ) 6.6 ( 166.1 )

Comprehensive income (loss) before allocation to noncontrolling interests 43.1 ( 134.7 ) 213.1 137.8

Noncontrolling interests in comprehensive income (loss) — ( 0.3 ) ( 0.2 ) ( 0.3 )

Comprehensive income (loss) attributable to common shareholders $ 43.1 $ ( 134.4 ) $ 213.3 $ 138.1

Other comprehensive income, net of tax ( 9.4 ) 15.4

Comprehensive income before allocation to noncontrolling interests 55.4 121.1

Noncontrolling interests in comprehensive income ( 0.1 ) ( 0.1 )

Comprehensive income attributable to common shareholders $ 55.5 $ 121.2

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) September 30,

(in millions) March 31,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 219.4 $ 329.6

Accounts receivable, net of allowance for doubtful accounts of $ 10.0 as of September 30, 2023 and $ 8.0 as of December 31, 2022

Accounts receivable, net of allowance for doubtful accounts of $ 8.4 as of March 31, 2024 and

December 31, 2023.

Inventories, net:

5 unchanged sentences

Other current assets 112.7 101.7

Current assets of discontinued operations — 625.9

Total current assets 1,072.2 1,090.8

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Goodwill 791.6 747.7

Long-term assets of discontinued operations — 1,504.9

Total assets $ 2,418.4 $ 2,333.6

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share and share data) September 30,

(in millions, except per share and share data) March 31,

2024 December 31,

5 unchanged sentences

and foreign taxes on income 12.4 14.3

Current liabilities of discontinued operations — 614.7

Total current liabilities 492.8 467.1

3 unchanged sentences

Other liabilities 112.5 105.6

Long-term liabilities of discontinued operations — 726.9

Total liabilities 1,011.4 973.3

1 unchanged sentence

Common shares, par value $ 1.00 ;

66,475,672 and 200,000,000 shares authorized, respectively

66,475,307 shares authorized;

57,111,810 and 56,919,443 shares issued and outstanding, respectively

Capital surplus 401.0 398.2

1 unchanged sentence

Accumulated other comprehensive loss ( 67.3 ) ( 58.0 )

Treasury stock — ( 864.3 )

Total shareholders’ equity 1,404.6 1,357.8

2 unchanged sentences

Total liabilities and equity $ 2,418.4 $ 2,333.6

Common shares issued 56,798,744 72,426,389

Common shares held in treasury — 16,101,007

Common shares outstanding 56,798,744 56,325,382

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2024 2023

1 unchanged sentence

Net income from continuing operations attributable to common shareholders $ 64.8 $ 55.9

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

Gain on sale of business — ( 232.5 )

Depreciation and amortization, including deferred financing costs 29.0 30.2

Depreciation and amortization 12.9 9.2

Stock-based compensation expense 6.6 5.6

Defined benefit plans and postretirement cost (credit) 7.0 ( 8.8 )

Defined benefit plans and postretirement cost 0.9 2.9

Deferred income taxes 0.1 1.6

2 unchanged sentences

Environmental payments, net of reimbursements ( 1.4 ) ( 1.3 )

Asbestos related payments, net of insurance recoveries — ( 29.3 )

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

Other ( 0.8 ) 5.6

Total provided by (used for) operating activities from continuing operations 33.9 ( 608.5 )

Total used for operating activities from continuing operations ( 79.9 ) ( 105.4 )

Investing activities:

Payment for acquisition - net of cash acquired ( 105.6 ) —

Capital expenditures ( 9.1 ) ( 8.9 )

Proceeds from sale of business — 318.1

Other investing activities 0.2 0.2

Total (used for) provided by investing activities from continuing operations ( 29.1 ) 293.6

Total used for investing activities from continuing operations ( 114.5 ) ( 8.7 )

Financing activities:

Dividends paid ( 11.7 ) ( 26.6 )

Reacquisition of shares on open market — ( 203.7 )

Stock options exercised, net of shares reacquired 15.7 3.1

Net (payments) proceeds related to employee stock plans ( 8.5 ) 12.9

Debt issuance costs — ( 4.1 )

Proceeds from term facility 300.0 —

Proceeds from long-term debt 140.0 —

Proceeds from term facility of discontinued operations — 350.0

Repayment of term loans ( 448.8 ) —

Distribution of Crane NXT, Co.

Total (used for) provided by financing activities from continuing and discontinued operations ( 415.7 ) 119.3

Repayments of long-term debt ( 31.9 ) ( 400.0 )

Total provided by (used for) financing activities from continuing and discontinued operations 87.9 ( 67.8 )

Discontinued Operations:

4 unchanged sentences

Decrease in cash and cash equivalents ( 110.2 ) ( 147.4 )

Cash and cash equivalents at beginning of period including discontinued operations (Note 2) 657.6 478.6

Cash and cash equivalents at beginning of period (a)

Cash and cash equivalents at end of period 219.4 510.2

1 unchanged sentence

Cash and cash equivalents of continuing operations at end of period $ 219.4 $ 292.2

(a) 2023 Includes cash and cash equivalents of discontinued operations.

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2024 2023

18 unchanged sentences

Comprehensive

Loss Treasury

Share- holders’

5 unchanged sentences

— — ( 11.7 ) — ( 11.7 ) — ( 11.7 )

Exercise of stock options, net of shares reacquired of 297,539 shares

— — — — 19.8 19.8 — 19.8

Exercise of stock options 0.1 2.4 — — 2.5 — 2.5

Impact from settlement of share-based awards, net of shares acquired 0.1 ( 11.1 ) — — ( 11.0 ) — ( 11.0 )

Impact from settlement of liability PRSUs (Note 1) — 6.1 — — 6.1 — 6.1

Stock-based compensation expense — 5.4 — — 5.4 — 5.4

2 unchanged sentences

BALANCE MARCH 31, 2024 57.1 $ 401.0 $ 1,013.8 $ ( 67.3 ) $ 1,404.6 $ 2.4 $ 1,407.0

Net income — — 45.6 — — 45.6 — 45.6

Cash dividends ($ 0.18 per share)

— — ( 10.2 ) — — ( 10.2 ) — ( 10.2 )

Exercise of stock options — 1.0 — — — 1.0 — 1.0

Stock-based compensation expense — 2.5 — — — 2.5 — 2.5

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 2.6 — 2.6 — 2.6

Currency translation adjustment — — — 0.8 — 0.8 ( 0.1 ) 0.7

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

Distribution of Crane NXT, Co.

— — ( 1,236.8 ) 414.5 — ( 822.3 ) — ( 822.3 )

BALANCE JUNE 30, 2023 56.7 $ 380.3 $ 868.1 $ ( 69.9 ) $ — $ 1,235.2 $ 2.4 $ 1,237.6

Net income — — 55.2 — — 55.2 — 55.2

Cash dividends ($ 0.18 per share)

— — ( 10.2 ) — — ( 10.2 ) — ( 10.2 )

Exercise of stock options 0.1 1.8 — — — 1.9 — 1.9

Impact from settlement of share-based awards — ( 0.1 ) — — — ( 0.1 ) — ( 0.1 )

Stock-based compensation expense — 5.7 — — — 5.7 — 5.7

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 3.6 — 3.6 — 3.6

Currency translation adjustment — — — ( 15.7 ) — ( 15.7 ) — ( 15.7 )

Distribution of Crane NXT, Co.

(Note 1) — — 8.5 — — 8.5 — 8.5

BALANCE SEPTEMBER 30, 2023 56.8 $ 387.7 $ 921.6 $ ( 82.0 ) $ — $ 1,284.1 $ 2.4 $ 1,286.5

(in millions, except share data) Common

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— — ( 26.6 ) — — ( 26.6 ) — ( 26.6 )

Reacquisition on open market of 1,699,949 shares

— — — — ( 175.8 ) ( 175.8 ) — ( 175.8 )

Exercise of stock options, net of shares reacquired of 297,539 shares

5 unchanged sentences

BALANCE MARCH 31, 2023 72.4 $ 376.8 $ 2,901.9 $ ( 487.8 ) $ ( 848.1 ) $ 2,015.2 $ 2.5 $ 2,017.7

Net income — — 258.2 — — 258.2 — 258.2

Cash dividends ($ 0.47 per share)

— — ( 26.4 ) — — ( 26.4 ) — ( 26.4 )

Reacquisition on open market of 1,959,069 shares

— — — — ( 27.9 ) ( 27.9 ) — ( 27.9 )

Exercise of stock options, net of shares reacquired of 94,774 shares

— — — — 1.1 1.1 — 1.1

Impact from settlement of share-based awards, net of shares acquired — ( 1.3 ) — — 1.2 ( 0.1 ) — ( 0.1 )

Stock-based compensation expense — 5.9 — — — 5.9 — 5.9

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 3.5 — 3.5 — 3.5

Currency translation adjustment — — — ( 75.8 ) — ( 75.8 ) ( 0.1 ) ( 75.9 )

BALANCE JUNE 30, 2022 72.4 $ 369.3 $ 2,837.7 $ ( 530.9 ) $ ( 886.7 ) $ 1,861.8 $ 2.8 $ 1,864.6

Net loss — — ( 59.3 ) — — ( 59.3 ) — ( 59.3 )

Cash dividends ($ 0.47 per share)

— — ( 26.4 ) — — ( 26.4 ) — ( 26.4 )

Exercise of stock options, net of shares reacquired of 81,642 shares

— — — — 1.5 1.5 — 1.5

Impact from settlement of share-based awards, net of shares acquired — ( 7.0 ) — — 6.9 ( 0.1 ) — ( 0.1 )

Stock-based compensation expense — 5.9 — — — 5.9 — 5.9

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 2.3 — 2.3 — 2.3

Currency translation adjustment — — — ( 77.4 ) — ( 77.4 ) ( 0.3 ) ( 77.7 )

BALANCE SEPTEMBER 30, 2022 72.4 $ 368.2 $ 2,752.0 $ ( 606.0 ) $ ( 878.3 ) $ 1,708.3 $ 2.5 $ 1,710.8

See Notes to Condensed Consolidated Financial Statements.

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Certain amounts in the prior periods’ condensed consolidated financial statements have been reclassified to conform to the current period presentation.

On March 30, 2022, Crane Holdings, Co.

announced that its Board of Directors approved a plan to pursue a separation into two independent, publicly-traded companies in a transaction in which Crane Holdings, Co.

would retain its Payment & Merchandising Technologies segment and spin-off its Aerospace & Electronics, Process Flow Technologies and Engineered Materials segments to its stockholders (the “Separation”).

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.

completed a separation into two independent, publicly-traded companies, Crane NXT, Co.

and Crane Company (the “Separation”), 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.” 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.

See Note 3 for additional information.

In connection with the Separation 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.

1 unchanged sentence

and Crane Company after the Separation.

Transactions under the transition services agreement with Crane NXT, Co.

did not have a material impact to the condensed consolidated balance sheets as of September 30, 2023, or the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023.

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.

The net assets distributed includes an adjustment of $ 8.5 million recorded in the three months ended September 30, 2023, to correct the amount previously recognized at the time of the Distribution.

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 2 for additional information.

The Company had a receivable of $ 0.1 million and $ 2.2 million related to the transition services agreement and tax matters agreement as of March 31, 2024 and December 31, 2023 respectively.

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 business.

Such total liability amounts are included in other liabilities on our Consolidated Balance Sheets and were $ 7.0 million as of March 31, 2024 and December 31, 2023.

Liability Performance-Based Restricted Share Units

As a result of the 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 of March 31, 2024 and December 31, 2023, the liability balance was $ 5.1 million and $ 10.0 million, respectively.

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 Company's Condensed Consolidated Statement of Operations, Balance Sheets and Cash Flows.

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

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

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 ASU 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, FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments in this ASU 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 ASU 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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company considered the applicability and impact of all ASUs issued by the FASB and determined them to be either not applicable or are not expected to have a material impact on the Company's Condensed Consolidated Statement of Operations, Balance Sheets and Cash Flows.

Note 2 - Acquisitions

Vian Acquisition

On January 2, 2024, the Company completed the acquisition of Vian Enterprises, Inc.

(“Vian”) for $ 102.5 million on a cash-free and debt-free basis, subject to a net working capital adjustment and potential additional payments of up to $ 7.5 million depending on the resolution of outstanding contingencies.

Vian is a global designer and manufacturer of multi-stage lubrication pumps and lubrication system components technology for critical aerospace and defense applications with sole-sourced and proprietary content on the commercial and military aircraft platforms.

Vian has been integrated into the Aerospace & Electronics segment.

Allocation of Consideration Transferred to Net Assets Acquired

The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of Vian.

The final determination of the fair value of certain assets and liabilities will be completed within the one-year measurement period as required by ASC 805.

We have not yet completed our evaluation and determination of certain assets acquired and liabilities assumed.

Any potential adjustments made could be material in relation to the preliminary values presented below:

Net assets acquired ( in millions )

Total current assets $ 21.0

Property, plant and equipment 6.8

Other assets 7.4

Intangible assets 54.4

Goodwill 48.5

Total assets acquired $ 138.1

Total current liabilities $ 6.2

Other liabilities 29.4

Total assumed liabilities $ 35.6

Net assets acquired $ 102.5

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:

Intangible Assets ( dollars in millions )

Intangible Fair Value Weighted Average Life (in years)

Trademarks/trade names $ 2.0 17.0

Customer relationships 44.0 29.0

Manufacturing know-how 3.2 4.0

Backlog 5.2 1.0

Total acquired intangible assets $ 54.4

The fair values of the trade name and manufacturing know-how 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 Vian’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 name and manufacturing know-how are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 17 years and 4 years, respectively.

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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 over time.

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

The customer relationship and backlog intangible assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 29 years and 1 year, respectively.

The useful life of the customer relationship intangible asset of 29 years is primarily driven by large customer relationships tied to long-duration aircraft platforms.

Supplemental Pro Forma Data

Vian’s results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 2, 2024.

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.

BAUM Acquisition

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.

During the first quarter of 2024, the Company paid $ 3.1 million to the seller related to a final working capital adjustment.

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.

with the Payment & Merchandising Technologies segment classified as discontinued operations.

Financial results from discontinued operations:

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2024 2023

8 unchanged sentences

NOTES TO THE CONDENSED 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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Segment Results

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

As of September 30, 2023, we had three reportable segments:

As of March 31, 2024, we had three reportable segments:

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

6 unchanged sentences

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

Products and services are organized into six integrated solutions:

Products and services are organized into 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 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 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.

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, Pumps and Systems and Commercial Valves.

Process Valves and Related Products include on/off valves and related products for critical and demanding applications primary focused on chemical, pharmaceutical and general industrial end markets.

Commercial Valves includes the manufacturing of valves and related products for the non-residential construction, gas utility and municipal markets.

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

Engineered Materials

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Financial information by reportable segment is set forth below.

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2024 2023

11 unchanged sentences

Interest expense ( 7.2 ) ( 6.6 )

Gain on sale of business — 3.8 — 232.5

Miscellaneous income (expense), net 1.3 4.5 ( 0.5 ) 20.6

Income (Loss) from continuing operations before income taxes $ 74.3 $ ( 110.5 ) $ 202.9 $ 240.3

(in millions) September 30, 2023 December 31, 2022

Miscellaneous expense, net ( 1.3 ) ( 0.5 )

Income from continuing operations before income taxes $ 82.1 $ 71.3

(in millions) March 31, 2024 December 31, 2023

Aerospace & Electronics $ 917.2 $ 744.6

2 unchanged sentences

Corporate 111.9 232.7

Assets Discontinued Operations — 2,130.8

Total $ 2,418.4 $ 2,333.6

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Aerospace & Electronics $ 250.8 $ 202.4

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

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions) 2024 2023

18 unchanged sentences

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 September 30, 2023, total backlog was $ 1,045.4 million.

As of March 31, 2024, total backlog was $ 1,197.9 million.

We expect to recognize approximately 76 % of our remaining performance obligations as revenue in 2024, an additional 20 % in 2025 and the balance thereafter.

8 unchanged sentences

Net contract assets and contract liabilities consisted of the following:

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Contract assets $ 73.4 $ 63.5

Contract liabilities $ 52.1 $ 56.2

We recognized revenue of $ 7.6 million and $ 26.6 million during the three and nine-months ended September 30, 2023, respectively, related to contract liabilities as of December 31, 2022.

We recognized revenue of $ 13.7 million during the three months ended March 31, 2024, related to contract liabilities as of December 31, 2023.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive.

For the three months ended September 30, 2022, the Company had a net loss attributable to common shareholders which causes all potentially dilutive securities to be anti-dilutive and are therefore not included in the calculation of earnings (loss) per share.

Three Months Ended Nine Months Ended

September 30, September 30,

Three Months Ended

(in millions, except per share data) 2024 2023

Net income (loss) from continuing operations attributable to common shareholders $ 55.2 $ ( 120.9 ) $ 154.4 $ 131.8

Net income from continuing operations attributable to common shareholders $ 64.8 $ 55.9

Income from discontinued operations, net of tax (Note 3) — 49.8

Net income (loss) attributable to common shareholders $ 55.2 $ ( 59.3 ) $ 206.5 $ 303.9

Net income attributable to common shareholders $ 64.8 $ 105.7

Average basic shares outstanding 57.0 56.5

1 unchanged sentence

Average diluted shares outstanding 58.1 57.3

Earnings (loss) per basic share:

Earnings (loss) per basic share from continuing operations $ 0.97 $ ( 2.16 ) $ 2.72 $ 2.33

Earnings per basic share:

Earnings per basic share from continuing operations $ 1.14 $ 0.99

Earnings per basic share from discontinued operations — 0.88

Earnings (loss) per basic share $ 0.97 $ ( 1.06 ) $ 3.64 $ 5.38

Earnings (loss) per diluted share:

Earnings (loss) per diluted share from continuing operations $ 0.96 $ ( 2.16 ) $ 2.69 $ 2.30

Earnings per basic share $ 1.14 $ 1.87

Earnings per diluted share:

Earnings per diluted share from continuing operations $ 1.12 $ 0.98

Earnings per diluted share from discontinued operations — 0.86

Earnings (loss) per diluted share $ 0.96 $ ( 1.06 ) $ 3.60 $ 5.30

Stock options, restricted share units, deferred stock units and performance-based restricted share units that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive was 0.5 million and 1.2 million for the three months ended September 30, 2023, and 2022, respectively, and 0.4 million for the nine months ended September 30, 2023, and 2022, respectively.

Earnings per diluted share $ 1.12 $ 1.84

Stock options, restricted share units, deferred stock units and performance-based restricted share units that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive was 0.2 million and 0.4 million for the three months ended March 31, 2024, and 2023, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - Changes in Accumulated Other Comprehensive Loss

The table below provides the accumulated balances for each classification of accumulated other comprehensive income (loss), as reflected on our Condensed Consolidated Balance Sheets.

The table below provides the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on our Condensed Consolidated Balance Sheets.

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

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Net period other comprehensive income 3.0 ( 12.3 ) ( 9.3 )

Distribution of Crane NXT, Co.

( 8.9 ) 423.4 414.5

Balance as of September 30, 2023 $ ( 271.9 ) $ 189.9 $ ( 82.0 )

Net of tax benefit of $ 109.3 million and $ 106.6 million as of September 30, 2023 and December 31, 2022, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022.

Amortization of pension and postretirement components has been recorded within “Miscellaneous income (expense), net” on our Condensed Consolidated Statements of Operations.

Three Months Ended September 30, Nine Months Ended September 30,

Balance as of March 31, 2024 $ ( 267.8 ) $ 200.5 $ ( 67.3 )

(a) Net of tax benefit of $ 102.2 million and $ 103.0 million as of March 31, 2024 and December 31, 2023, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023.

Amortization of pension and postretirement components has been recorded within “Miscellaneous expense, net” on our Condensed Consolidated Statements of Operations.

Three Months Ended March 31,

(in millions) 2024 2023

Amortization of pension items:

Prior service costs (benefit) $ 0.5 $ — $ 0.5 $ ( 0.1 )

Prior service costs $ 0.2 $ —

Net loss 3.8 3.8

Amortization of postretirement items:

Prior service costs (benefit) 0.2 ( 0.3 ) ( 0.3 ) ( 0.8 )

Net loss (benefit) 0.2 — ( 0.2 ) —

Prior service benefit (a)

( 0.1 ) ( 0.2 )

Total before tax $ 3.9 $ 3.4

1 unchanged sentence

Total reclassifications for the period $ 3.0 $ 2.7

(a) Includes benefit from discontinued operations of $ 0.2 million in 2023.

(b) Includes net activity from discontinued operations of $ 0.2 million in 2023.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - Defined Benefit and Postretirement Benefits

For all plans, the components of net periodic benefit for the three months ended September 30, 2023, and 2022 are as follows:

For all plans, the components of net periodic benefit for the three months ended March 31, 2024, and 2023 are as follows:

Pension Postretirement

3 unchanged sentences

Expected return on plan assets ( 12.5 ) ( 11.4 ) — —

Amortization of prior service cost (benefit) 0.5 — 0.2 ( 0.3 )

Amortization of net loss 3.9 3.3 0.2 —

Net periodic loss (benefit) $ 2.2 $ ( 3.8 ) $ 0.2 $ ( 0.1 )

For all plans, the components of net periodic benefit for the nine months ended September 30, 2023, and 2022 are as follows:

Pension Postretirement

(in millions) 2023 a

Service cost $ 2.4 $ 4.3 $ — $ 0.1

Interest cost 26.7 17.4 0.3 0.5

Expected return on plan assets ( 34.2 ) ( 43.6 ) — —

Amortization of prior service cost (benefit) 0.5 ( 0.1 ) ( 0.3 ) ( 0.8 )

Amortization of net loss (benefit) 11.5 12.9 ( 0.2 ) —

Amortization of prior service cost 0.2 0.2 — —

Amortization of net loss (gain) 3.8 3.8 ( 0.1 ) —

Curtailment and Settlement loss from discontinued operations — 2.9 — —

Net periodic loss (benefit) $ 1.0 $ 5.3 $ ( 0.1 ) $ —

Includes $ 1.9 million of pension net periodic loss related to discontinued operations for nine months ended September 30, 2023.

Includes $ 0.2 million of net periodic benefit related to discontinued operations for the nine months ended September 30, 2023.

The components of net periodic benefit, other than the service cost component, are included in “Miscellaneous income (expense), net” in our Condensed Consolidated Statements of Operations.

The components of net periodic benefit, other than the service cost component, are included in “Miscellaneous expense, net” in our Condensed Consolidated Statements of Operations.

Service cost is recorded within “Cost of sales” and “Selling, general and administrative” in our Condensed Consolidated Statements of Operations.

2 unchanged sentences

Expected contributions in 2024 $ 17.9 $ 0.4

Amounts contributed during the nine months ended September 30, 2023

Amounts contributed during the three months ended March 31, 2024

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Our effective tax rates are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Effective Tax Rate 21.0 % 21.6 %

For the three months ended September 30, 2023, our effective tax rate is impacted by earnings in jurisdictions with statutory rates higher than the U.S.

and expenses statutorily non-deductible for income tax purposes in the current period, this is partially offset by the statutory U.S.

deduction related to our non-U.S.

subsidiaries’ income.

In the prior year’s three month period ended September 30, 2022, the Company reported a loss on the asbestos related transaction with no correlative income tax benefit, which resulted in the prior year’s negative effective tax rate.

Our effective tax rate attributable to continuing operations for the nine months ended September 30, 2023, is lower than the prior year’s comparable period primarily due to the prior year effect of a reversal of a deferred tax asset established that related to the planned sale of a subsidiary in a prior period and a prior year loss on the asbestos-related transaction and the lack of a related tax benefit.

This is partially offset by earnings in jurisdictions with statutory tax rates higher than the United States and expenses statutorily non-deductible for income tax purposes in current period.

Our effective tax rate attributable to continuing operations for the three and nine months ended September 30, 2023 is higher than the statutory U.S.

federal tax rate of 21% primarily due to earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily non-deductible for income tax purposes and U.S.

Our effective tax rate for the three months ended March 31, 2024, is slightly lower than the prior year’s comparable period primarily due to lower non-U.S.

taxes and lower statutorily non-deductible costs.

Our effective tax rate for the three months ended March 31, 2024, is equal to the statutory U.S.

federal tax rate of 21%.

The effective tax rate is the result of permanent increases and decreases that net against each other and offset.

These increases and decreases include earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily non-deductible for income tax purposes and U.S.

state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S.

2 unchanged sentences

Unrecognized Tax Benefits

During the three months and nine months ended September 30, 2023, our gross unrecognized tax benefits, excluding interest and penalties, increased by $ 0.7 million and $ 1.1 million, respectively, primarily due to increases in tax positions taken in the current and prior periods, and in the nine months ended September 30, 2023 these items were partially offset by reductions from expiration of statutes of limitations.

During the three and nine months ended September 30, 2023, the total amount of unrecognized tax benefits that, if recognized, would cause our effective tax rate to increase by $ 0.8 million and $ 1.2 million, respectively.

During the three months ended March 31, 2024, our gross unrecognized tax benefits, excluding interest and penalties, increased by $ 0.5 million, primarily due to increases in tax positions taken in the current and prior periods.

During the three months ended March 31, 2024, the total amount of unrecognized tax benefits that, if recognized, would cause our effective tax rate to increase by $ 0.7 million.

The difference between these amounts relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes.

During the three and nine months ended September 30, 2023, we recognized $ 0.1 million and $ 0.2 million, respectively, of interest expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of September 30, 2023 and December 31, 2022, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $ 2.0 million and $ 2.0 million, respectively.

During the three months ended March 31, 2024, we recognized $ 0.2 million of interest and penalty expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of March 31, 2024 and December 31, 2023, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $ 2.4 million and $ 2.2 million, respectively.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $ 0.3 million due to expiration of statutes of limitations and settlements with tax authorities.

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 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 business.

As of September 30, 2023, the total liability was $ 8.5 million and was included in other liabilities on our condensed consolidated balance sheets.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7 unchanged sentences

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 September 30, 2023, we had four reporting units.

As of March 31, 2024, we had four reporting units.

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

6 unchanged sentences

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

Acquisition (a)

48.5 — — 48.5

Currency translation ( 0.1 ) ( 4.5 ) — ( 4.6 )

Balance as of September 30, 2023 $ 202.3 $ 315.8 $ 171.3 $ 689.4

As of September 30, 2023, we had $ 67.4 million of net intangible assets, of which $ 21.6 million were intangibles with indefinite useful lives.

Balance as of March 31, 2024 $ 250.8 $ 369.5 $ 171.3 $ 791.6

(a) For the period ended March 31, 2024, adjustments within the Aerospace & Electronics segment of $ 48.5 million relate to the acquisition of Vian.

See Note 2 for further information.

As of March 31, 2024, we had $ 137.6 million of net intangible assets, of which $ 21.9 million were intangibles with indefinite useful lives.

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.

Changes to intangible assets are as follows:

(in millions) Nine Months Ended

September 30, 2023 Year Ended December 31, 2022

(in millions) Three Months Ended

March 31, 2024 Year Ended December 31, 2023

Balance at beginning of period, net of accumulated amortization $ 87.9 $ 71.7

Additions (a)

Amortization expense ( 3.9 ) ( 6.3 )

1 unchanged sentence

Balance at end of period, net of accumulated amortization $ 137.6 $ 87.9

(a) For the period ended March 31, 2024, additions of $ 54.4 million relate to the acquisition of Vian.

See Note 2 for further information.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of intangible assets are as follows:

September 30, 2023 December 31, 2022

(in millions) Weighted Average

March 31, 2024 December 31, 2023

( dollars in millions )

Weighted Average

Amortization Period of Definite Lived Assets (in years) Gross

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Accrued liabilities consist of:

(in millions) September 30,

(in millions) March 31,

2024 December 31,

Employee related expenses $ 66.0 $ 115.3

Warranty 2.6 3.0

Current lease liabilities 11.9 10.8

7 unchanged sentences

Generally, third party specialists assist in the estimation of remediation costs.

The environmental remediation liability as of September 30, 2023 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.

The environmental remediation liability as of March 31, 2024 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.

33 unchanged sentences

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 $ 21.7 million and $ 24.8 million as of September 30, 2023 and December 31, 2022, respectively, and as described below, a portion is reimbursable by the U.S.

The current portion of the total estimated liability was $ 7.8 million and $ 7.7 million as of September 30, 2023 and December 31, 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.

The remediation of the PGA North Site comprises two main remedial components:

a plume management and remediation system (in accordance with the requirements of the 2006 Consent Decree) and source area remediation (to comply with the requirements of the 2014 ROD Amendment).

The 2019 conceptual agreement and modified remedial approach focused on enhanced extraction of contaminated groundwater and targeted reinjection of treated groundwater and was designed to accelerate remedial progress at the site.

The modified remedial approach required certain capital investments and infrastructure upgrades across the broader plume area, with the final components of this approach commissioned in 2022.

In addition, the modified source area treatment remedy was commissioned in late 2023.

As part of our approved remedial plans, the Company is required to conduct periodic groundwater monitoring to demonstrate the effectiveness of these system enhancements and provide the EPA with a report evaluating remedial performance, restoration time frames and potential inefficiencies (which may warrant further system upgrade or modifications).

The year 2027 was

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

selected as a milestone to enable the collection of 3 to 4 years of post-commissioning data, analysis of data and submission of a performance monitoring report to the EPA with recommendations.

This report will document the project restoration time frames for groundwater and outline the future operational scheme, including the key milestones for transitioning from active groundwater treatment to monitoring only.

This report will be submitted to the EPA for approval and in combination with regulatory discussions and consultations, will provide clarity on future remedial requirements at the site and associated costs.

The total estimated gross liability was $ 19.4 million and $ 20.7 million as of March 31, 2024 and December 31, 2023, respectively, and as described below, a portion is reimbursable by the U.S.

The current portion of the total estimated liability was $ 7.8 million as of March 31, 2024 and December 31, 2023, 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.

On July 31, 2006, we entered into a consent decree with the U.S.

1 unchanged sentence

Government reimburses us for 21 % of qualifying costs of investigation and remediation activities at the Goodyear Site.

As of September 30, 2023 and December 31, 2022, we recorded a receivable of $ 3.8 million and $ 4.8 million, respectively, for the expected reimbursements from the U.S.

As of March 31, 2024 and December 31, 2023, we recorded a receivable of $ 3.8 million respectively, for the expected reimbursements from the U.S.

Government in respect of the aggregate liability as at that date.

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General Dynamics Ordnance and Tactical Systems, Inc.

(“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”).

(“GD-OTS”) is in the process of conducting a remedial investigation and feasibility study (“RI-FS”) for portions of the Crab Orchard Site, which include areas where Unidynamics 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.

2 unchanged sentences

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.

3 unchanged sentences

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.

We understand that GD-

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OTS has also reached agreements with the U.S.

Government and other participating PRPs related to the first-phase areas of concern.

6 unchanged sentences

At present, we cannot predict whether or when these negotiations will result in definitive agreements.

Negotiations remain ongoing between us and GD-OTS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

regarding a potential resolution of GD-OTS’ claim for costs that it has incurred in performing its obligations under the AOC.

Negotiations remain ongoing between us and GD-OTS regarding a potential resolution of GD-OTS’ claim for costs that it has incurred and expects to incur 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.

2 unchanged sentences

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.

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 condensed 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:

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2022 2022

Settlement / indemnity costs incurred $ 6.3 $ 29.4

Defense costs incurred 1.0 6.4

Total costs incurred $ 7.3 $ 35.8

The total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the periods presented was as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2022 2022

Settlement / indemnity payments $ 6.6 $ 33.8

Defense payments 1.1 6.1

Insurance receipts ( 1.8 ) ( 10.6 )

Pre-tax cash payments, net $ 5.9 $ 29.3

Other Proceedings

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, 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.

2 unchanged sentences

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 September 30, 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.

We believe that as of March 31, 2024, 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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Our debt consisted of the following:

(in millions) September 30,

(in millions) March 31,

2024 December 31,

364 -Day Credit Agreement a

Revolving facility $ 110.0 $ —

Total short-term borrowings $ 110.0 $ —

Term Facility (a)

$ 246.8 $ 248.5

Total long-term debt $ 246.8 $ 248.5

(a) Debt issuance costs totaled $ 0.9 million and $ 0.4 million as of September 30, 2023 and December 31, 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

(a) Debt issuance costs totaled $ 0.7 million and $ 0.8 million as of March 31, 2024 and December 31, 2023, 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 $ 48.8 million on the Term Facility during the nine months ended September 30, 2023.

As of September 30, 2023, there were no outstanding borrowings under the Revolving Facility.

On October 2, 2023, the Company borrowed $ 100 million under the revolving credit facility and 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.

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 Company made principal prepayments of $ 1.9 million on the Term Facility during the three months ended March 31, 2024.

The Company had net borrowings of $ 110.0 million under the Revolving Facility during the first quarter of 2024, primarily to fund the Vian acquisition and for general corporate and working capital purposes.

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.

5 unchanged sentences

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 September 30, 2023.

The Company was in compliance with all such covenants as of March 31, 2024.

364 -Day Credit Agreement - On August 11, 2022, the Company entered into a 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 accrued 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 was 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 was 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.

14 unchanged sentences

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 $ 10.8 million and $ 4.1 million as of September 30, 2023 and December 31, 2022, respectively.

Foreign exchange contracts not designated as hedging instruments had a notional value of $ 19.0 million and $ 11.3 million as of March 31, 2024 and December 31, 2023, 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 Condensed Consolidated Balance Sheets and was $ 0.1 million as of December 31, 2022.

The Company had no such derivative receivable as of September 30, 2023.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and was $ 0.2 million as of September 30, 2023.

The Company had no such derivative liability as of December 31, 2022.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and was $ 0.1 million as of March 31, 2024 and December 31, 2023, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were $ 0.2 million and $ 0.1 million as of March 31, 2024 and December 31, 2023, respectively.

Note 15 - Restructuring

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.

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 about 2 % of our global workforce.

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 fourth quarter of 2024.

The Company recorded a restructuring gain of $ 0.3 million during the nine months ended September 30, 2023.

The following table summarizes the cumulative restructuring costs, net incurred through September 30, 2023.

As of September 30, 2023, we do not expect to incur additional facility consolidation costs to complete these actions.

Cumulative Restructuring Costs, Net

(in millions) Severance Other Total

Aerospace & Electronics $ 1.5 $ — $ 1.5

Process Flow Technologies 6.3 — 6.3

Engineered Materials 0.1 — 0.1

2022 Repositioning $ 7.9 $ — $ 7.9

Process Flow Technologies $ 14.9 $ ( 2.8 ) $ 12.1

2019 Repositioning $ 14.9 $ ( 2.8 ) $ 12.1

Restructuring Liability

The following table summarizes the accrual balances related to each restructuring program:

(in millions) 2022 Repositioning 2019 Repositioning Total

Balance as of December 31, 2022 (a)

$ 8.2 $ 2.4 $ 10.6

Utilization ( 3.4 ) ( 1.5 ) $ ( 4.9 )

Balance as of September 30, 2023 (a)

$ 4.8 $ 0.9 $ 5.7

(a) Included within Accrued Liabilities in the Condensed Consolidated Balance Sheets.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our restructuring liability was $ 2.4 million and $ 4.7 million, as of March 31, 2024 and December 31, 2023, respectively.

Note 16 - Subsequent Events

On October 2, 2023, the Company borrowed $ 100 million under its existing revolving credit facility to complete the $ 91 million, cash-free, and debt-free, acquisition of Baum lined piping GmbH (“BAUM”), which closed on October 4, 2023.

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

BAUM will be included in our Process Flow Technologies segment.

On October 3, 2023, the Company exercised a portion of the accordion feature under its existing revolving credit facility to increase available borrowing capacity from $ 500 million to $ 800 million to support potential additional acquisitions.

Effective May 1, 2024, the Company completed the acquisition of CryoWorks, Inc.

(“ CryoWorks ”) for $ 61 million on a cash-free and debt-free basis, subject to a net working capital adjustment.

On April 29, 2024, we borrowed approximately $ 50 million under the Company’s existing Revolving Facility to fund the CryoWorks acquisition.

Cr yoWorks is a leading supplier of vacuum insulated pipe systems for hydrogen and cryogenic applications .

CryoWorks will be included in the Process Flow Technologies segment.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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What changed 10-Q

Item 1. Financial Statements