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Item 1. Financial Statements

2024-07-31 compared with 2024-05-01 · 173 added, 113 removed, 609 unchanged (32% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions, except per share data) 2024 2023 2024 2023

7 unchanged sentences

Interest expense ( 7.4 ) ( 5.3 ) ( 14.6 ) ( 11.8 )

Miscellaneous expense, net ( 1.3 ) ( 0.5 )

Miscellaneous income (expense), net 1.1 ( 1.3 ) ( 0.2 ) ( 1.9 )

Total other expense, net ( 5.0 ) ( 5.8 ) ( 12.3 ) ( 12.0 )

19 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2024 2023 2024 2023

10 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) March 31,

(in millions) June 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 229.3 $ 329.6

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

December 31, 2023.

Accounts receivable, net of allowance for doubtful accounts of $ 7.5 as of June 30, 2024 and $ 8.4 as of December 31, 2023

Inventories, net:

18 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

25 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions) 2024 2023

Operating activities:

Net income attributable to common shareholders $ 136.4 $ 151.3

Income from discontinued operations, net of tax — 52.1

Net income from continuing operations attributable to common shareholders 136.4 99.2

9 unchanged sentences

Investing activities:

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

Payment for acquisitions - net of cash acquired ( 166.3 ) —

Capital expenditures ( 16.5 ) ( 20.5 )

8 unchanged sentences

Repayments of long-term debt ( 61.9 ) ( 436.9 )

Distribution of Crane NXT, Co.

Total provided by (used for) financing activities from continuing and discontinued operations 99.6 ( 395.6 )

7 unchanged sentences

Cash and cash equivalents at end of period $ 229.3 $ 218.9

Cash and cash equivalents of discontinued operations — 218.0

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.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions) 2024 2023

32 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 — — 71.6 — 71.6 — 71.6

Cash dividends ($ 0.205 per share)

— — ( 11.7 ) — ( 11.7 ) — ( 11.7 )

Exercise of stock options 0.1 3.5 — — 3.6 — 3.6

Impact from settlement of share-based awards, net of shares acquired — ( 0.2 ) — — ( 0.2 ) — ( 0.2 )

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

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

Currency translation adjustment — — — ( 3.3 ) ( 3.3 ) — ( 3.3 )

BALANCE JUNE 30, 2024 57.2 $ 410.0 $ 1,073.7 $ ( 67.6 ) $ 1,473.3 $ 2.4 $ 1,475.7

See Notes to Condensed Consolidated Financial Statements.

(in millions, except share data) Common

18 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 — — 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

See Notes to Condensed Consolidated Financial Statements.

16 unchanged sentences

and Crane Company after the Separation.

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.

The Company had a payable of $ 0.2 million as of June 30, 2024 and a receivable of $ 2.2 million as of December 31, 2023, 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 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.

Such total liability amounts are included in other liabilities on our Condensed Consolidated Balance Sheets and were $ 6.4 million and $ 7.0 million as of June 30, 2024 and December 31, 2023, respectively.

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.

As of June 30, 2024 and December 31, 2023, the liability balance was $ 6.3 million and $ 10.0 million, respectively.

Recent Accounting Pronouncements

19 unchanged sentences

Note 2 - Acquisitions

CryoWorks Acquisition

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

(“ CryoWorks ”) for $ 60.7 million on a cash-free and debt-free basis, subject to a net working capital adjustment.

CryoWorks, is a leading supplier of vacuum insulated pipe systems for hydrogen and cryogenic applications.

CryoWorks has been integrated into the Process Flow Technologies segment.

Net assets acquired ( in millions )

Total current assets $ 6.6

Property, plant and equipment 0.5

Other assets 1.9

Intangible assets 24.0

Goodwill 32.7

Total assets acquired $ 65.7

Total current liabilities $ 3.5

Other liabilities 1.5

Total assumed liabilities $ 5.0

Net assets acquired $ 60.7

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 $ 5.0 16.0

Customer relationships 17.5 12.0

Backlog 1.5 1.0

Total acquired intangible assets $ 24.0

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Vian Acquisition

1 unchanged sentence

(“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 )

17 unchanged sentences

Total acquired intangible assets $ 53.4

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.

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.

Valuation of Intangible Assets

For all acquisitions, 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.

Therefore, a portion of 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 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.

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 measured.

3 unchanged sentences

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.

The useful life of the customer

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

relationship intangible asset related to Vian of 29 years is primarily driven by large customer relationships tied to long-duration aircraft platforms.

Intangible assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits).

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.

The results of operations of CyoWorks, Vian and BAUM have been included in our financial statements for the period subsequent to the completion of the respective acquisition dates.

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

Note 3 - Discontinued Operations

2 unchanged sentences

Financial results from discontinued operations:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2024 2023 2024 2023

3 unchanged sentences

Operating profit — — — 74.7

Other expense, net — ( 12.2 )

Other income (expense), net — 1.0 — ( 11.2 )

Net income from discontinued operations before income taxes — 1.0 — 63.5

Provision for income taxes — 12.7

(Benefit from) Provision for income taxes — ( 1.3 ) — 11.4

Income from discontinued operations, net of tax $ — $ 2.3 $ — $ 52.1

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 March 31, 2024, we had three reportable segments:

As of June 30, 2024, we had three reportable segments:

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

14 unchanged sentences

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

Engineered Materials

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Engineered Materials

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

Financial information by reportable segment is set forth below.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2024 2023 2024 2023

11 unchanged sentences

Interest expense ( 7.4 ) ( 5.3 ) ( 14.6 ) ( 11.8 )

Miscellaneous expense, net ( 1.3 ) ( 0.5 )

Miscellaneous income (expense), net 1.1 ( 1.3 ) ( 0.2 ) ( 1.9 )

Income from continuing operations before income taxes $ 91.6 $ 57.3 $ 173.7 $ 128.6

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

(in millions) June 30, 2024 December 31, 2023

Aerospace & Electronics $ 921.8 $ 744.6

3 unchanged sentences

Total $ 2,506.7 $ 2,333.6

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

(in millions) June 30, 2024 December 31, 2023

Aerospace & Electronics $ 251.8 $ 202.4

6 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2024 2023 2024 2023

1 unchanged sentence

Commercial Original Equipment $ 88.6 $ 69.8 $ 174.1 $ 138.2

Military and Other Original Equipment 71.4 61.9

Military Original Equipment 66.9 62.8 138.3 124.8

Commercial Aftermarket Products 52.3 40.8 103.0 78.6

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

As of June 30, 2024, total backlog was $ 1,225.8 million.

We expect to recognize approximately 61 % of our remaining performance obligations as revenue in 2024, an additional 33 % in 2025 and the balance thereafter.

8 unchanged sentences

Net contract assets and contract liabilities consisted of the following:

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

(in millions) June 30, 2024 December 31, 2023

Contract assets $ 74.3 $ 63.5

Contract liabilities $ 49.4 $ 56.2

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

We recognized revenue of $ 8.2 million and $ 21.9 million during the three and six-month periods ended June 30, 2024, respectively, related to contract liabilities as of December 31, 2023.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions, except per share data) 2024 2023 2024 2023

13 unchanged sentences

Earnings per diluted share $ 1.23 $ 0.79 $ 2.34 $ 2.64

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

3 unchanged sentences

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

Other comprehensive income before reclassifications — ( 12.3 ) ( 12.3 )

Other comprehensive income (loss) before reclassifications — ( 15.6 ) ( 15.6 )

Amounts reclassified from accumulated other comprehensive loss 6.0 — 6.0

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

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,

Net period other comprehensive income (loss) 6.0 ( 15.6 ) ( 9.6 )

Balance as of June 30, 2024 $ ( 264.8 ) $ 197.2 $ ( 67.6 )

(a) Net of tax benefit of $ 101.4 million and $ 103.0 million as of June 30, 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 and six months ended June 30, 2024 and 2023.

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

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2024 2023 2024 2023

5 unchanged sentences

— ( 0.2 ) — ( 0.5 )

( 0.1 ) ( 0.2 ) ( 0.2 ) ( 0.3 )

Total before tax $ 3.8 $ 3.4 $ 7.7 $ 6.8

1 unchanged sentence

Total reclassifications for the period $ 3.0 $ 2.6 $ 6.0 $ 5.3

(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.

(a) Includes benefit from discontinued operations of $ 0.2 million and 0.5 million for the three months and six months ended June 30, 2023, respectively.

(b) Includes net activity from discontinued operations of $ 0.2 million and $ 0.3 million for the three months and six months ended June 30, 2023, respectively.

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 March 31, 2024, and 2023 are as follows:

For all plans, the components of net periodic benefit for the three months ended June 30, 2024, and 2023 are as follows:

Pension Postretirement

7 unchanged sentences

Net periodic loss (benefit) $ 1.0 $ 1.3 $ ( 0.1 ) $ —

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.

For all plans, the components of net periodic benefit for the six months ended June 30, 2024, and 2023 are as follows:

Pension Postretirement

(in millions) 2024 2023 2024 2023

Service cost $ 1.8 $ 1.7 $ — $ —

Interest cost 17.3 17.8 0.1 —

Expected return on plan assets ( 25.0 ) ( 22.8 ) — —

Amortization of prior service cost 0.4 0.4 — —

Amortization of net loss (gain) 7.5 7.6 ( 0.2 ) —

Curtailment and Settlement loss from discontinued operations — 1.9 — —

Net periodic loss (benefit) $ 2.0 $ 6.6 $ ( 0.1 ) $ —

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.

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 three months ended March 31, 2024

Amounts contributed during the six months ended June 30, 2024

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Our effective tax rates are as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Effective Tax Rate 21.8 % 24.4 % 21.4 % 22.8 %

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.

Our effective tax rate for the three and six months ended June 30, 2024, is 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.

Our effective tax rate for the three and six months ended June 30, 2024 is slightly 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 the impact of 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 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.

During both the three months and six months ended June 30, 2024, our gross unrecognized tax benefits, excluding interest and penalties, increased by $ 0.2 million, and $ 0.7 million, respectively, primarily due to increases in tax positions taken in the current period, partially offset by decreases in tax positions taken during a prior period and reductions from expiration of statutes of limitations.

During the three and six months ended June 30, 2024, the total amount of unrecognized tax benefits that, if recognized, would cause our effective tax rate to increase by $ 0.3 million and $ 0.9 million, respectively.

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 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 three and six months ended June 30, 2024, we recognized $ 0.1 million and $ 0.3 million, respectively, of interest expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of both June 30, 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 $ 2.5 million and $ 2.2 million, respectively.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $ 0.6 million due to expiration of statutes of limitations and settlements with tax authorities.

9 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 March 31, 2024, we had four reporting units.

As of June 30, 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.

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.

Fair value is calculated using the relief from royalty method.

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

3 unchanged sentences

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

Acquisition (a)

Acquisition (a) (b)

49.5 32.7 — 82.2

Currency translation ( 0.1 ) ( 5.7 ) — ( 5.8 )

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.

Balance as of June 30, 2024 $ 251.8 $ 401.0 $ 171.3 $ 824.1

(a) For the period ended June 30, 2024, adjustments within the Aerospace & Electronics segment of $ 49.5 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.

(b) For the period ended June 30, 2024 adjustments within the Process Flow Technologies segment of $ 32.7 million relate to the acquisition of CryoWorks.

See Note 2 for further information.

As of June 30, 2024, we had $ 156.0 million of net intangible assets, of which $ 21.8 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) Three Months Ended

March 31, 2024 Year Ended December 31, 2023

(in millions) Six Months Ended

June 30, 2024 Year Ended December 31, 2023

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

3 unchanged sentences

Balance at end of period, net of accumulated amortization $ 156.0 $ 87.9

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

(a) For the period ended June 30, 2024, additions include $ 24.0 million related to the acquisition of CryoWorks and $ 53.4 million related to the acquisition of Vian.

See Note 2 for further information.

1 unchanged sentence

A summary of intangible assets are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

( dollars in millions )

16 unchanged sentences

Accrued liabilities consist of:

(in millions) March 31,

(in millions) June 30,

2024 December 31,

9 unchanged sentences

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

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.

The environmental remediation liability as of June 30, 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.

44 unchanged sentences

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.

The total estimated gross liability was $ 18.1 million and $ 20.7 million as of June 30, 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 June 30, 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.

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.

2 unchanged sentences

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

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.

As of June 30, 2024 and December 31, 2023, we recorded a receivable of $ 3.5 million and $ 3.8 million, respectively, for the expected reimbursements from the U.S.

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

8 unchanged sentences

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.

We have completed a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air in certain buildings, as well as required soil and groundwater remediation at the site all in accordance with the New Jersey Department of Environmental Protection guidelines and directives.

We submitted our remediation completion reports to the New Jersey Department of Environmental Protection and are awaiting feedback and acceptance.

We anticipate that only periodic monitoring will be required at the site for the near to medium term.

Marion, IL Site

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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-

We, as indemnitor, have also agreed to pay a

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OTS has also reached agreements with the U.S.

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

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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.

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.

The participants have reached agreement on the terms of a draft consent decree for resolving the U.S.

Government’s share of RI/FS costs, which we expect will be lodged for entry with the United States District Court for the Southern District of Illinois in the coming months.

Further, as part of these negotiations, and in order to obtain the protections provided by the draft consent decree, we have reached a preliminary agreement in principle with GD-OTS on our contribution to the United States’ claimed past response costs, conditioned on a separate agreement to memorialize the parties’ agreement with respect to the United States’ response costs.

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.

4 unchanged sentences

Other Proceedings

LyondellBasell Chemical Leak

In July 2023, Crane Company, along with certain of its subsidiaries (“Crane”), were added as defendants in ongoing product liability/personal injury lawsuits filed by 56 victims of a 2021 chemical leak incident that occurred at a LyondellBasell facility in La Porte, Texas.

The multi-district lawsuits were consolidated for proceedings in state court in Harris County, Texas, and have been pending since 2021, when the initial set of defendants were sued.

Crane is alleged to have manufactured a valve involved in the incident.

Plaintiffs also added other defendants to the suits in July 2023 who allegedly either sold or serviced the subject valve or a valve accessory, and discovery for the newly added defendants began moving forward in February 2024.

Crane has valid defenses, and insurance coverage that attaches after a modest self-insured retention.

All of our insurance providers have been notified of this potential liability and have been cooperating with Crane as it engages in the litigation process.

Given the early stage of fact and expert discovery for the newly added defendants, it is not possible at this time to reasonably estimate the probability and/or the associated financial value of any potential loss.

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.

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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 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.

We believe that as of June 30, 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) March 31,

(in millions) June 30,

2024 December 31,

4 unchanged sentences

Total long-term debt $ 246.9 $ 248.5

(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.

(a) Debt issuance costs totaled $ 0.6 million and $ 0.8 million as of June 30, 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.

2 unchanged sentences

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 Company made principal prepayments of $ 1.9 million on the Term Facility during the six months ended June 30, 2024.

The Company had net borrowings of $ 130.0 million under the Revolving Facility during the first six months of 2024, with proceeds used primarily to fund the Vian and CryoWorks acquisitions 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 March 31, 2024.

The Company was in compliance with all such covenants as of June 30, 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.

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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 $ 19.0 million and $ 11.3 million as of March 31, 2024 and December 31, 2023, respectively.

Foreign exchange contracts not designated as hedging instruments had a notional value of $ 18.9 million and $ 11.3 million as of June 30, 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 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.

Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and was $ 0.1 million as of June 30, 2024 and December 31, 2023, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were $ 0.5 million and $ 0.1 million as of June 30, 2024 and December 31, 2023, respectively.

Note 15 - Restructuring

1 unchanged sentence

We expect to complete the program in the fourth quarter of 2024.

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

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.

Our restructuring liability was $ 2.3 million and $ 4.7 million, as of June 30, 2024 and December 31, 2023, respectively.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements