What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-07-31 · 150 added, 100 removed, 682 unchanged (27% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

29 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2024 2023 2024 2023

Net income before allocation to noncontrolling interests $ 77.3 $ 55.2 $ 213.7 $ 206.5

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

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

Currency translation adjustment 25.3 ( 15.7 ) 9.6 ( 2.3 )

7 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) June 30,

(in millions) September 30,

2024 December 31,

1 unchanged sentence

Cash and cash equivalents $ 258.2 $ 329.6

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

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

Inventories, net:

18 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

2024 December 31,

25 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2024 2023

11 unchanged sentences

Other ( 0.4 ) 4.3

Total used for operating activities from continuing operations ( 17.9 ) ( 53.0 )

Total provided by operating activities from continuing operations 63.8 33.9

Investing activities:

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

Payment for acquisitions - net of cash acquired and working capital adjustments ( 161.7 ) —

Capital expenditures ( 25.5 ) ( 29.7 )

22 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2024 2023

41 unchanged sentences

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

Net income — — 77.3 — 77.3 — 77.3

Cash dividends ($ 0.205 per share)

— — ( 11.7 ) — ( 11.7 ) — ( 11.7 )

Exercise of stock options — 1.8 — — 1.8 — 1.8

Impact from settlement of share-based awards — ( 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 — — — 25.2 25.2 0.1 25.3

BALANCE SEPTEMBER 30, 2024 57.2 $ 417.3 $ 1,139.3 $ ( 39.4 ) $ 1,574.4 $ 2.5 $ 1,576.9

See Notes to Condensed Consolidated Financial Statements.

30 unchanged sentences

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

See Notes to Condensed Consolidated Financial Statements.

16 unchanged sentences

and Crane Company after the Separation.

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.

The Company had a receivable of less than $ 0.1 million as of September 30, 2024 and $ 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 Condensed Consolidated Balance Sheets and were $ 6.4 million and $ 7.0 million as of June 30, 2024 and December 31, 2023, respectively.

Such total liability amounts are included in other liabilities on our Condensed Consolidated Balance Sheets and were $ 6.5 million and $ 7.0 million as of September 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 June 30, 2024 and December 31, 2023, the liability balance was $ 6.3 million and $ 10.0 million, respectively.

As of September 30, 2024 and December 31, 2023, the liability balance was $ 5.9 million and $ 10.0 million, respectively.

Recent Accounting Pronouncements

21 unchanged sentences

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 ”) for $ 60.7 million on a cash-free and debt-free basis.

During the third quarter of 2024, the Company received $ 1.6 million from the seller related to a final working capital adjustment.

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

CryoWorks has been integrated into the Process Flow Technologies segment.

20 unchanged sentences

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”) for $ 102.5 million on a cash-free and debt-free basis, and potential additional payments of up to $ 7.5 million depending on the resolution of outstanding contingencies.

During the third quarter of 2024, the Company received $ 3.0 million from the seller related to a final working capital adjustment.

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 commercial and military aircraft platforms.

32 unchanged sentences

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 useful life of the customer

The attrition-adjusted

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.

future cash flows are then discounted to present value using an appropriate discount rate.

The useful life of the customer 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

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.

The results of operations of CryoWorks, 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.

3 unchanged sentences

Financial results from discontinued operations:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2024 2023 2024 2023

3 unchanged sentences

Operating profit — — — 74.7

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

Other expense, net — — — ( 11.2 )

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

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

Provision for income taxes — — — 11.4

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

1 unchanged sentence

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

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

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

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

12 unchanged sentences

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.

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1 unchanged sentence

Financial information by reportable segment is set forth below.

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2024 2023 2024 2023

13 unchanged sentences

Income from continuing operations before income taxes $ 100.1 $ 74.3 $ 273.8 $ 202.9

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

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

Aerospace & Electronics $ 924.6 $ 744.6

3 unchanged sentences

Total $ 2,651.9 $ 2,333.6

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

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

Aerospace & Electronics $ 248.9 $ 202.4

6 unchanged sentences

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

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2024 2023 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 June 30, 2024, total backlog was $ 1,225.8 million.

As of September 30, 2024, total backlog was $ 1,237.6 million.

We expect to recognize approximately 43 % of our remaining performance obligations as revenue in 2024, an additional 48 % in 2025 and the balance thereafter.

8 unchanged sentences

Net contract assets and contract liabilities consisted of the following:

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

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

Contract assets $ 76.5 $ 63.5

Contract liabilities $ 52.5 $ 56.2

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.

We recognized revenue of $ 8.5 million and $ 30.4 million during the three and nine-month periods ended September 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 Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

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

13 unchanged sentences

Earnings per diluted share $ 1.33 $ 0.96 $ 3.67 $ 3.60

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 June 30, 2024, and 2023, respectively and 0.2 million and 0.4 million for the six months ended June 30, 2024, and 2023, respectively.

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 0.5 million for the three months ended September 30, 2024, and 2023, respectively and 0.2 million and 0.4 million for the nine months ended September 30, 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 (loss) before reclassifications — ( 15.6 ) ( 15.6 )

Other comprehensive income before reclassifications — 9.6 9.6

Amounts reclassified from accumulated other comprehensive loss 9.0 — 9.0

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.

Net period other comprehensive income 9.0 9.6 18.6

Balance as of September 30, 2024 $ ( 261.8 ) $ 222.4 $ ( 39.4 )

(a) Net of tax benefit of $ 100.5 million and $ 103.0 million as of September 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 nine months ended September 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,

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

(in millions) 2024 2023 2024 2023

Amortization of pension items:

Prior service costs $ 0.2 $ — $ 0.4 $ —

Prior service costs (a)

$ 0.2 $ 0.5 $ 0.6 $ 0.5

Net loss 3.8 3.9 11.3 11.5

Amortization of postretirement items:

Prior service benefit (a)

Prior service cost (benefit) (b)

— 0.2 — ( 0.3 )

Net (gain) loss (c)

( 0.1 ) 0.2 ( 0.3 ) ( 0.2 )

2 unchanged sentences

Total reclassifications for the period $ 3.0 $ 3.6 $ 9.0 $ 8.9

(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.

(a) Includes cost of $ 0.4 million from discontinued operations for the three months ended September 30, 2023.

(b) Includes cost of $ 0.2 million and benefit of $ 0.3 million from discontinued operations for the three months and nine months ended September 30, 2023, respectively.

(c) Includes net activity from discontinued operations of $ 0.2 million and $ 0.2 million for the three months and nine months ended September 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 June 30, 2024, and 2023 are as follows:

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

Pension Postretirement

5 unchanged sentences

Amortization of net loss (gain) 3.8 3.9 ( 0.1 ) —

Curtailment and Settlement loss from discontinued operations — ( 1.0 ) — —

Net periodic loss (benefit) $ 1.0 $ 2.2 $ ( 0.1 ) $ —

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

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

Pension Postretirement

12 unchanged sentences

Expected contributions in 2024 $ 17.9 $ 0.4

Amounts contributed during the six months ended June 30, 2024

Amounts contributed during the nine months ended September 30, 2024

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Our effective tax rates are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

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

2024 2023 2024 2023

Effective Tax Rate 22.7 % 25.7 % 22.0 % 23.9 %

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 and six months ended June 30, 2024 is slightly higher than the statutory U.S.

Our effective tax rate for the three and nine months ended September 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, partially offset by the statutory U.S.

deduction related to our non-U.S.

subsidiaries’ income.

Our effective tax rate for the three and nine months ended September 30, 2024 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 the impact of U.S.

3 unchanged sentences

Unrecognized Tax Benefits

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.

During both the three months and nine months ended September 30, 2024, our gross unrecognized tax benefits, excluding interest and penalties, increased by $ 0.6 million, and $ 1.3 million, respectively, primarily due to increases in tax positions taken in the current and prior period, and in the nine months ended September 30, 2024 these items were partially offset by reductions from the expiration of statutes of limitations.

During the three and nine months ended September 30, 2024, the total amount of unrecognized tax benefits that, if recognized, would cause our effective tax rate to increase by $ 0.8 million and $ 1.7 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 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 three and nine months ended September 30, 2024, we recognized $ 0.2 million and $ 0.5 million, respectively, of interest expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of both September 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 $ 2.7 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 June 30, 2024, we had four reporting units.

As of September 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.

9 unchanged sentences

Currency translation — ( 0.6 ) — ( 0.6 )

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.

Balance as of September 30, 2024 $ 248.9 $ 407.6 $ 171.3 $ 827.8

(a) For the period ended September 30, 2024, adjustments within the Aerospace & Electronics segment of $ 46.5 million relate to the acquisition of Vian, including the final working capital adjustment.

See Note 2 for further information.

(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.

(b) For the period ended September 30, 2024 adjustments within the Process Flow Technologies segment of $ 34.2 million relate to the acquisitions of CryoWorks and Baum, including the final working capital adjustments.

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 September 30, 2024, we had $ 152.6 million of net intangible assets, of which $ 22.3 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) Six Months Ended

June 30, 2024 Year Ended December 31, 2023

(in millions) Nine Months Ended

September 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 $ 152.6 $ 87.9

(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.

(a) For the period ended September 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:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

( dollars in millions )

16 unchanged sentences

Accrued liabilities consist of:

(in millions) June 30,

(in millions) September 30,

2024 December 31,

9 unchanged sentences

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

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.

The environmental remediation liability as of September 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.

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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.

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

The year 2027 was 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 $ 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.

The total estimated gross liability was $ 17.3 million and $ 20.7 million as of September 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 September 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 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.

As of September 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.

26 unchanged sentences

Government, and other PRPs entered into a non-binding mediation agreement in 2015 (we have since stepped into Redco’s position as a participant in the mediation).

The first phase of the mediation, involving certain former munitions or ordnance storage areas, began in November 2017, but did not result in a multi-party settlement agreement.

Subsequently, Redco entered discussions directly with GD-OTS and reached an agreement, as of July 13, 2021, to contribute toward GD-OTS’s past RI-FS costs associated with the first-phase areas for an immaterial amount.

We, as indemnitor, have also agreed to pay a

The first phase of the mediation, involving certain former munitions or ordnance

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

storage areas, began in November 2017, but did not result in a multi-party settlement agreement.

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 that 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.

3 unchanged sentences

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 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.

The participants have reached agreement on the terms of a 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 weeks.

Further, as part of these negotiations, and in order to obtain the protections provided by the draft consent decree, we have reached agreement with GD-OTS on our contribution to the United States’ claimed past response costs, for an immaterial sum, and have executed separate settlement and escrow agreements 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.

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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 have entered into a preliminary agreement to settle with a portion of the claimants.

There is still uncertainty related to the ongoing litigation with the remaining claimants.

We have recognized a liability as of September 30, 2024 for the settled claims, as well as an estimate for the remaining claims.

The amount recognized to date and the ultimate settlement of the remaining claims is not expected to be material to Crane's financial statements.

In conjunction with the liability, a corresponding receivable was recorded as these matters are fully insured.

There is no material loss related to this matter as it is covered by insurance.

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 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.

Other than as stated above, there were no additional liabilities to report.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Marion Site Hurricane and Recovery

In September 2024, our manufacturing site in Marion, North Carolina was directly affected by flooding from Hurricane Helene.

Our insurance generally covers the repair or replacement of assets that suffered damage or loss and also provides business interruption coverage, including lost profits, and reimbursement for other expenses and costs that have been incurred relating to the damages and losses suffered, subject to a $ 0.5 million deductible.

The extent of the damage to the facility is still being assessed but the loss, net of insurance recoveries is not expected to be material.

We are working with our insurance carrier to assess the damage and ascertain the amount of insurance recoveries due to us as a result of the damage and loss we incurred.

These costs and insurance recoveries are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The following table summarizes the estimated loss from this event, net of insurance recoveries:

(in millions) For the Three and Nine Months Ended September 30, 2024

Write-off of property, plant and equipment $ 2.9

Write-off of inventory 0.8

Total expense 3.7

Insurance recoveries receivable (a)

Loss from natural disaster, net of insurance recoveries $ 0.5

(a) A corresponding insurance receivable is recorded in Other current assets in the Condensed Consolidated Balance Sheets.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13 - Financing

Our debt consisted of the following:

(in millions) June 30,

(in millions) September 30,

2024 December 31,

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Total long-term debt $ 246.9 $ 248.5

(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.

(a) Debt issuance costs totaled $ 0.6 million and $ 0.8 million as of September 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.

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

The Company had net borrowings of $ 85.0 million under the Revolving Facility during the first nine 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.

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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 June 30, 2024.

The Company was in compliance with all such covenants as of September 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 $ 18.9 million and $ 11.3 million as of June 30, 2024 and December 31, 2023, respectively.

Foreign exchange contracts not designated as hedging instruments had a notional value of $ 19.8 million and $ 11.3 million as of September 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 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.

Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and were $ 0.4 million and $ 0.1 million as of September 30, 2024 and December 31, 2023, respectively.

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

The Company had no such derivative liability as of September 30, 2024.

Note 15 - Restructuring

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

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

Our restructuring liability was $ 2.3 million and $ 4.7 million, as of September 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