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Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 324 added, 179 removed, 689 unchanged (42% 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) 2021 2020 2021 2020

4 unchanged sentences

Acquisition-related and integration charges — 2.3 — 7.5

Restructuring gain, net ( 13.1 ) ( 1.2 )

Restructuring (gains) charges, net ( 0.2 ) 23.2 ( 13.3 ) 22.0

Operating profit 136.9 28.7 276.9 110.4

4 unchanged sentences

Total other expense ( 1.3 ) ( 11.7 ) ( 10.5 ) ( 20.0 )

Income before income taxes 137.1 80.3

Income from continuing operations before income taxes 135.6 17.0 266.4 90.4

Provision for income taxes 24.9 3.6 52.3 19.3

Net income from continuing operations attributable to common shareholders 110.7 13.4 214.1 71.1

Income from discontinued operations, net of tax (Note 3) 27.6 1.4 32.6 6.5

Net income attributable to common shareholders $ 138.3 $ 14.8 $ 246.7 $ 77.6

Earnings per share:

Basic $ 1.86 $ 1.07

Diluted $ 1.84 $ 1.05

Earnings per basic share:

Earnings per basic share from continuing operations $ 1.89 $ 0.23 $ 3.67 $ 1.22

Earnings per basic share from discontinued operations 0.47 0.03 0.55 0.11

Earnings per basic share $ 2.36 $ 0.26 $ 4.22 $ 1.33

Earnings per diluted share:

Earnings per diluted share from continuing operations $ 1.87 $ 0.23 $ 3.62 $ 1.20

Earnings per diluted share from discontinued operations 0.46 0.02 0.55 0.11

Earnings per diluted share $ 2.33 $ 0.25 $ 4.17 $ 1.31

Average shares outstanding:

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2021 2020 2021 2020

3 unchanged sentences

Changes in pension and postretirement plan assets and benefit obligation, net of tax 5.2 3.6 10.1 7.1

Other comprehensive loss, net of tax ( 30.0 ) ( 41.6 )

Other comprehensive income (loss), net of tax 12.8 20.8 ( 17.2 ) ( 20.9 )

Comprehensive income before allocation to noncontrolling interests 151.1 35.6 229.5 56.7

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) March 31,

(in millions) June 30,

2021 December 31,

10 unchanged sentences

Other current assets 129.8 137.3

Current assets held for sale 225.9 17.4

Total current assets 1,672.3 1,573.7

8 unchanged sentences

Goodwill 1,426.0 1,437.7

Long-term assets held for sale — 199.9

Total assets $ 4,423.2 $ 4,615.0

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

2021 December 31,

6 unchanged sentences

and foreign taxes on income 8.8 0.1

Current liabilities held for sale 37.9 27.4

Total current liabilities 758.8 1,056.6

4 unchanged sentences

Other liabilities 164.7 171.3

Long-term liabilities held for sale — 26.2

Total liabilities 2,695.1 3,083.9

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions) 2021 2020

Operating activities:

Net income attributable to common shareholders $ 108.4 $ 62.8

Operating activities from continuing operations:

Net income from continuing operations attributable to common shareholders $ 214.1 $ 71.1

Gain on sale of property ( 18.5 ) —

8 unchanged sentences

Other ( 0.5 ) 0.1

Total provided by (used for) operating activities 50.2 ( 35.5 )

Investing activities:

Total provided by operating activities from continuing operations 197.5 75.6

Investing activities from continuing operations:

Payment for acquisition - net of cash acquired — ( 172.3 )

3 unchanged sentences

Proceeds from sale of marketable securities 40.0 —

Total provided by (used for) investing activities 29.6 ( 177.4 )

Financing activities:

Total provided by (used for) investing activities from continuing operations 39.5 ( 182.9 )

Financing activities from continuing operations:

Dividends paid ( 50.2 ) ( 50.4 )

1 unchanged sentence

Stock options exercised, net of shares reacquired 5.2 0.6

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

Debt issuance costs — ( 1.2 )

Proceeds from issuance of commercial paper with maturities greater than 90 days — 251.3

Net proceeds from issuance of commercial paper with maturities of 90 days or less — 14.5

Net borrowings under revolving credit facility — 45.2

Total (used for) provided by financing activities ( 44.9 ) 134.3

Repayments of commercial paper with maturities greater than 90 days ( 27.1 ) ( 96.5 )

Net proceeds (repayments) from issuance of commercial paper with maturities of 90 days or less 15.0 ( 62.8 )

Proceeds from revolving credit facility — 77.2

Repayments of revolving credit facility — ( 77.2 )

Proceeds from term loan — 343.9

Repayment of term loan ( 348.1 ) —

Total (used for) provided by financing activities from continuing operations ( 405.2 ) 314.9

Discontinued operations:

Total provided by operating activities 9.2 1.0

Total used for investing activities ( 0.8 ) ( 0.2 )

Increase in cash and cash equivalents from discontinued operations 8.4 0.8

Effect of exchange rates on cash and cash equivalents ( 4.5 ) ( 10.2 )

Increase (decrease) in cash and cash equivalents 27.4 ( 91.1 )

(Decrease) increase in cash and cash equivalents ( 164.3 ) 198.2

Cash and cash equivalents at beginning of period 551.0 393.9

Cash and cash equivalents at end of period $ 386.7 $ 592.1

Detail of cash used for operating working capital:

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

(in millions) 2021 2020

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

Accounts receivable $ ( 36.7 ) $ 120.0

16 unchanged sentences

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

Discontinued Operations.

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

for $ 360 million on a cash-free and debt-free basis.

The sale is subject to customary closing conditions and regulatory approvals.

The historical results of Engineered Materials are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated, amounts and activity are presented on a continuing operations basis.

Please see Note 3 for additional details.

Process Flow Technologies.

We changed the name of our 'Fluid Handling' segment to 'Process Flow Technologies'.

This new name better conveys the key strengths and core competencies of the segment;

providing proprietary and highly engineered process flow technology solutions to its customers.

Recent Accounting Pronouncements - Adopted

22 unchanged sentences

We believe that our previous methodology to calculate credit losses is generally consistent with the new expected credit loss model and did not result in a material adjustment upon adoption.

The allowance for doubtful accounts was $ 9.3 million and $ 10.9 million as of March 31, 2021 and December 31, 2020, respectively.

The allowance for doubtful accounts was $ 8.3 million and $ 10.9 million as of June 30, 2021 and December 31, 2020, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

16 unchanged sentences

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

I&S has been integrated into the Fluid Handling segment.

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

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

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

Goodwill from this acquisition is not deductible for tax purposes.

34 unchanged sentences

I&S’ results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 31, 2020.

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

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

Acquisition-Related Costs

Acquisition-related costs are expensed as incurred.

For the three months ended March 31, 2020, we recorded $ 5.2 million of integration and transaction costs in our Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2020, we recorded $ 2.3 million and $ 7.5 million, respectively, of integration and transaction costs in our Condensed Consolidated Statements of Operations.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 - Discontinued Operations

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met.

A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell.

When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate.

Executing on our strategy to focus our growth investments on our three remaining segments, on May 16, 2021, we entered into an agreement to sell our Engineered Materials segment to Grupo Verzatec S.A.

for $ 360 million on a cash-free and debt-free basis.

The sale is subject to customary closing conditions and regulatory approvals.

In the second quarter of 2021, the assets and liabilities of the segment were classified as held for sale, and the segment’s results are presented as discontinued operations.

This change was applied on a retrospective basis.

We reasonably expect to close on this transaction within one year from the date of our entry into the agreement, and therefore have presented the assets and liabilities as current as of June 30, 2021.

Financial results from discontinued operations:

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2021 2020 2021 2020

Net sales $ 59.1 $ 33.6 $ 113.0 $ 84.6

Cost of sales 46.7 26.9 89.7 65.9

Selling, general and administrative 4.7 4.2 9.2 9.4

Restructuring charges — 0.6 — 0.6

Income from discontinued operations 7.7 1.9 14.1 8.7

Income tax (benefit) provision 1

( 19.9 ) 0.5 ( 18.5 ) 2.2

Income from discontinued operations, net of tax $ 27.6 $ 1.4 $ 32.6 $ 6.5

1 Includes $ 21.5 million of deferred tax benefit in 2021 associated with the pending disposition of the Engineered Materials segment.

Major classes of assets and liabilities to be transferred in the transaction:

(in millions) June 30, 2021 December 31, 2020

Accounts receivable, net $ 17.1 $ 8.8

Inventories, net 9.4 8.5

Other current assets 0.5 0.1

Property, plant and equipment, net 26.1 26.8

Other assets 0.3 0.6

Intangible assets, net 1.2 1.2

Goodwill 171.3 171.3

Assets held for sale $ 225.9 $ 217.3

Accounts payable $ 25.1 $ 19.5

Accrued liabilities 8.1 7.9

Long-term deferred tax liability 4.7 26.1

Other liabilities — 0.1

Liabilities held for sale $ 37.9 $ 53.6

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Segment Results

1 unchanged sentence

We have four reportable segments:

Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials.

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

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

1 unchanged sentence

A brief description of each of our segments are as follows:

Fluid Handling

The Fluid Handling segment is a provider of highly engineered fluid handling equipment for critical performance applications that require high reliability.

Aerospace & Electronics

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

Products include a wide range of custom designed, highly engineered products used in landing systems, sensing and utility systems, fluid management, seat actuation, power and microelectronic applications, and microwave systems.

Process Flow Technologies

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

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

2 unchanged sentences

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Payment & Merchandising Technologies

2 unchanged sentences

Crane Currency is a supplier of banknotes and highly engineered banknote security features.

Aerospace & Electronics

Engineered Materials

The Engineered Materials segment manufactures fiberglass-reinforced plastic 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).

Three Months Ended

In the second quarter of 2021, the assets and liabilities of the Engineered Materials segment were reclassified as held for sale and results are presented as discontinued operations and, therefore, not included in the tables below.

This change was applied on a retrospective basis.

Please see Note 3 for additional details.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2021 2020 2021 2020

Fluid Handling $ 288.0 $ 256.7

Payment & Merchandising Technologies 337.5 297.4

Aerospace & Electronics $ 157.5 $ 157.4 $ 311.5 $ 350.3

Engineered Materials 53.9 50.9

Process Flow Technologies 310.7 239.3 598.8 495.9

Payment & Merchandising Technologies 328.2 247.6 665.6 544.9

Total $ 796.4 $ 644.3 $ 1,575.9 $ 1,391.1

Operating profit:

Fluid Handling 49.9 28.0

Payment & Merchandising Technologies 85.9 26.4

Aerospace & Electronics $ 30.8 $ 19.5 $ 56.8 $ 63.3

Engineered Materials 6.4 6.9

Process Flow Technologies 46.5 20.2 96.6 48.2

Payment & Merchandising Technologies 77.9 2.0 163.7 28.4

Corporate ( 18.3 ) ( 13.0 ) ( 40.2 ) ( 29.5 )

3 unchanged sentences

Miscellaneous income, net 9.7 2.4 13.6 6.2

Income before income taxes $ 137.1 $ 80.3

For the three months ended March 31, 2021, operating profit includes a net restructuring gain of $ 13.1 million.

For the three months ended March 31, 2020, operating profit includes acquisition-related and integration charges $ 5.2 million and a net restructuring gain of $ 1.2 million.

Income from continuing operations before income taxes $ 135.6 $ 17.0 $ 266.4 $ 90.4

For the three and six month periods ended June 30, 2021, operating profit includes net restructuring gains of $ 0.2 million and $ 13.3 million, respectively.

For the three and six month periods ended June 30, 2020, operating profit includes acquisition-related and integration charges of $ 2.3 million and $ 7.5 million, respectively, and net restructuring charges of $ 23.2 million and $ 22.0 million, respectively.

See Note 2, “Acquisitions” and Note 15, “Restructuring” for further discussion.

(in millions) March 31, 2021 December 31, 2020

Fluid Handling $ 1,135.5 $ 1,106.1

Payment & Merchandising Technologies 2,146.9 2,215.3

(in millions) June 30, 2021 December 31, 2020

Aerospace & Electronics $ 609.9 $ 593.9

Engineered Materials 223.2 217.3

Process Flow Technologies 1,165.8 1,106.1

Payment & Merchandising Technologies 2,149.0 2,215.3

Corporate 272.6 482.4

Assets held for sale 225.9 217.3

Total $ 4,423.2 $ 4,615.0

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions) March 31, 2021 December 31, 2020

Fluid Handling $ 355.0 $ 360.0

Payment & Merchandising Technologies 866.3 875.2

(in millions) June 30, 2021 December 31, 2020

Aerospace & Electronics $ 202.5 $ 202.5

Engineered Materials 171.3 171.3

Process Flow Technologies 356.0 360.0

Payment & Merchandising Technologies 867.5 875.2

Total $ 1,426.0 $ 1,437.7

3 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) 2021 2020 2021 2020

Fluid Handling

Aerospace & Electronics

Commercial Original Equipment $ 53.7 $ 51.9 $ 108.3 $ 132.5

Military and Other Original Equipment 62.8 65.5 125.6 125.9

Commercial Aftermarket Products 25.3 20.3 44.8 54.2

Military Aftermarket Products 15.7 19.7 32.8 37.7

Total Aerospace & Electronics $ 157.5 $ 157.4 $ 311.5 $ 350.3

Process Flow Technologies

Process Valves and Related Products $ 184.3 $ 160.8 $ 358.6 $ 317.9

1 unchanged sentence

Pumps and Systems 28.2 20.2 52.5 43.9

Total Fluid Handling $ 288.0 $ 256.7

Total Process Flow Technologies $ 310.7 $ 239.3 $ 598.8 $ 495.9

Payment & Merchandising Technologies

3 unchanged sentences

Total Payment & Merchandising Technologies $ 328.2 $ 247.6 $ 665.6 $ 544.9

Aerospace & Electronics

Commercial Original Equipment $ 54.7 $ 80.6

Military and Other Original Equipment 62.8 60.4

Commercial Aftermarket Products 19.5 33.9

Military Aftermarket Products 17.1 18.0

Total Aerospace & Electronics $ 154.1 $ 192.9

Engineered Materials

FRP - Recreational Vehicles $ 24.3 $ 18.8

FRP - Building Products 21.8 24.9

FRP - Transportation 7.8 7.2

Total Engineered Materials $ 53.9 $ 50.9

Net sales $ 796.4 $ 644.3 $ 1,575.9 $ 1,391.1

1 As a result of the third quarter 2020 internal merger of the CMS business into the vending vertical of the CPI business, Payment Acceptance and Dispensing Products now includes Merchandising Equipment.

1 As a result of the third quarter 2020 internal merger of the Crane Merchandising Systems (“CMS”) business into the vending vertical of the CPI business, Payment Acceptance and Dispensing Products now includes Merchandising Equipment.

The prior period has been reclassified to conform to the current period presentation.

1 unchanged sentence

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, 2021, total backlog was $ 1,161.0 million.

As of June 30, 2021, total backlog was $ 1,191.7 million.

We expect to recognize approximately 77 % of our remaining performance obligations as revenue in 2021, an additional 21 % in 2022 and the balance thereafter.

8 unchanged sentences

Net contract assets and contract liabilities consisted of the following:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions) March 31, 2021 December 31, 2020

(in millions) June 30, 2021 December 31, 2020

Contract assets $ 81.6 $ 66.7

Contract liabilities $ 90.3 $ 103.0

We recognized revenue of $ 33.3 million during the three-month period ended March 31, 2021 related to contract liabilities as of December 31, 2020.

We recognized revenue of $ 13.5 million and $ 46.9 million during the three- and six-month periods ended June 30, 2021 related to contract liabilities as of December 31, 2020.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Earnings Per Share

3 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) 2021 2020 2021 2020

Net income from continuing operations attributable to common shareholders $ 110.7 $ 13.4 $ 214.1 $ 71.1

Income from discontinued operations, net of tax (Note 3) 27.6 1.4 32.6 6.5

Net income attributable to common shareholders $ 138.3 $ 14.8 $ 246.7 $ 77.6

3 unchanged sentences

Earnings per basic share:

Earnings per basic share from continuing operations $ 1.89 $ 0.23 $ 3.67 $ 1.22

Earnings per basic share from discontinued operations 0.47 0.03 0.55 0.11

Earnings per basic share $ 2.36 $ 0.26 $ 4.22 $ 1.33

Earnings per diluted share:

The computation of diluted earnings per share excludes the effect of the potentially anti-dilutive securities which was 1.8 million and 1.4 million for the three month periods ending March 31, 2021 and 2020, respectively.

Earnings per diluted share from continuing operations $ 1.87 $ 0.23 $ 3.62 $ 1.20

Earnings per diluted share from discontinued operations 0.46 0.02 0.55 0.11

Earnings per diluted share $ 2.33 $ 0.25 $ 4.17 $ 1.31

The computation of diluted earnings per share excludes the effect of the potentially anti-dilutive securities which was 1.3 million and 2.2 million for the three months ended June 30, 2021 and 2020, respectively, and 1.5 million and 1.8 million for the six months ending June 30, 2021 and 2020, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7 - Changes in Equity and Accumulated Other Comprehensive Loss

A summary of changes in equity for the year-to-date interim periods ended March 31, 2021 and 2020 is provided below:

A summary of changes in equity for the year-to-date interim periods ended June 30, 2021 and 2020 is provided below:

(in millions, except share data) Common

16 unchanged sentences

BALANCE MARCH 31, 2021 72.4 $ 334.7 $ 2,276.2 $ ( 497.2 ) $ ( 591.1 ) $ 1,595.0 $ 3.0 $ 1,598.0

Net income — — 138.3 — — 138.3 — 138.3

Cash dividends ( 0.43 per share)

— — ( 25.2 ) — — ( 25.2 ) — ( 25.2 )

Impact from settlement of share-based awards, net of shares acquired — 7.6 — — ( 9.5 ) ( 1.9 ) — ( 1.9 )

Stock-based compensation expense — 6.1 — — — 6.1 — 6.1

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 5.2 — 5.2 — 5.2

Currency translation adjustment — — — 7.7 — 7.7 ( 0.1 ) 7.6

BALANCE JUNE 30, 2021 72.4 $ 348.4 $ 2,389.3 $ ( 484.3 ) $ ( 600.6 ) $ 1,725.2 $ 2.9 $ 1,728.1

(in millions, except share data) Common

18 unchanged sentences

BALANCE MARCH 31, 2020 72.4 $ 315.4 $ 2,149.5 $ ( 525.3 ) $ ( 606.8 ) $ 1,405.2 $ 2.3 $ 1,407.5

Net income — — 14.8 — — 14.8 — $ 14.8

Cash dividends ($0.43 per share) — — ( 24.9 ) — — ( 24.9 ) — ( 24.9 )

Impact from settlement of share-based awards, net of shares acquired — ( 1.4 ) — — 1.9 0.5 — 0.5

Stock-based compensation expense — 4.7 — — — 4.7 — 4.7

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

Currency translation adjustment — — — 17.2 — 17.2 0.2 17.4

BALANCE JUNE 30, 2020 72.4 $ 318.7 $ 2,139.4 $ ( 504.5 ) $ ( 604.9 ) $ 1,421.1 $ 2.5 $ 1,423.6

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

4 unchanged sentences

Net period other comprehensive income (loss) 10.1 ( 28.0 ) ( 17.9 )

Balance as of March 31, 2021 $ ( 393.0 ) $ ( 104.2 ) $ ( 497.2 )

Net of tax benefit of $ 149.5 million and $ 148.2 million as of March 31, 2021 and December 31, 2020, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three-month periods ended March 31, 2021 and 2020.

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

Balance as of June 30, 2021 $ ( 387.8 ) $ ( 96.5 ) $ ( 484.3 )

Net of tax benefit of $ 150.6 million and $ 148.2 million as of June 30, 2021 and December 31, 2020, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three and six month periods ended June 30, 2021 and 2020.

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

Three Months Ended

June 30, Six Months Ended

(in millions) 2021 2020 2021 2020

9 unchanged sentences

Note 8 - Defined Benefit and Postretirement Benefits

For all plans, the components of net periodic benefit for the three months ended March 31, 2021 and 2020 are as follows:

For all plans, the components of net periodic benefit for the three months ended June 30, 2021 and 2020 are as follows:

Pension Postretirement

3 unchanged sentences

Expected return on plan assets ( 15.7 ) ( 14.0 ) — —

Amortization of prior service cost ( 0.1 ) ( 0.1 ) ( 0.3 ) ( 0.3 )

Amortization of net loss 6.5 4.9 — —

Net periodic benefit $ ( 2.4 ) $ ( 1.0 ) $ — $ —

For all plans, the components of net periodic benefit for the six months ended June 30, 2021 and 2020 are as follows:

Pension Postretirement

(in millions) 2021 2020 2021 2020

Service cost $ 3.2 $ 3.2 $ 0.2 $ 0.1

Interest cost 10.4 13.2 0.3 0.4

Expected return on plan assets ( 29.8 ) ( 28.7 ) — —

Recognized curtailment gain ( 0.7 ) — — —

7 unchanged sentences

Expected contributions in 2021 $ 20.7 $ 2.6

Amounts contributed during the three months ended March 31, 2021 $ 15.7 $ 0.1

Amounts contributed during the six months ended June 30, 2021 $ 16.9 $ 0.3

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,

2021 2020 2021 2020

Effective Tax Rate 18.4 % 20.9 % 19.6 % 21.6 %

Our tax rate for the three months ended March 31, 2021 is lower than the prior year’s comparable period primarily due to higher tax credit utilization, partially offset by a lower statutory U.S.

deduction related to our non-U.S.

subsidiaries’ income.

Our tax rate for the three months ended March 31, 2021 is approximately equal to the statutory U.S.

federal tax rate of 21 %.

Our effective tax rates attributable to continuing operations for the three and six months ended June 30, 2021 are lower than the prior year’s comparable periods primarily due to higher tax credit utilization, partially offset by the reversal of tax accruals in the prior year related to an audit settlement.

Our effective tax rates attributable to continuing operations for the three and six months ended June 30, 2021 are lower than the statutory U.S.

federal tax rate of 21% primarily due to excess share-based compensation benefits, partially offset by state taxes .

Unrecognized Tax Benefits

During the three months ended March 31, 2021, our gross unrecognized tax benefits, excluding interest and penalties, decreased by $ 0.1 million, primarily as a result of decreases due to settlements and expiration of statutes of limitations in the current year, partially offset by increases in tax positions taken in the current and prior periods.

During the three months ended March 31, 2021, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate decreased by $ 0.1 million.

During the three and six months ended June 30, 2021, our gross unrecognized tax benefits, excluding interest and penalties, increased by $ 0.5 million and $ 0.4 million, respectively, primarily due to increases in tax positions taken in the current and prior periods, partially offset by reductions from expiration of statutes of limitations.

During the three and six months ended June 30, 2021, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate increased by $ 0.6 million and $ 0.6 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, 2021, we recognized $ 0.1 million of interest and penalty expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of March 31, 2021 and December 31, 2020, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $ 7.6 million and $ 7.5 million, respectively.

During the three and six months ended June 30, 2021, we recognized $ 0.2 million of interest and penalty expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations.

As of June 30, 2021 and December 31, 2020, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $ 7.8 million and $ 7.5 million, respectively.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $ 10.1 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, 2021, we had seven reporting units.

As of June 30, 2021, we had seven reporting units.

In the second quarter of 2021, the assets and liabilities of our Engineered Materials segment (which was a separate reportable segment and reporting unit) were classified as held for sale.

Please see Note 3 for additional details.

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.

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Changes to goodwill are as follows:

(in millions) Fluid Handling Payment & Merchandising Technologies Aerospace & Electronics Engineered Materials Total

(in millions) Aerospace & Electronics Process Flow Technologies Payment & Merchandising Technologies Total

Balance as of December 31, 2020 $ 202.5 $ 360.0 $ 875.2 $ 1,437.7

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Currency translation — ( 3.9 ) ( 7.7 ) ( 11.6 )

Balance at March 31, 2021 $ 355.0 $ 866.3 $ 202.5 $ 171.3 $ 1,595.1

For the three months ended March 31, 2021, adjustments of $ 0.1 million represent the finalization of the purchase price allocation for the acquisition of I&S.

Balance at June 30, 2021 $ 202.5 $ 356.0 $ 867.5 $ 1,426.0

For the six months ended June 30, 2021, adjustments of $ 0.1 million represent the finalization of the purchase price allocation for the acquisition of I&S.

See a discussion in Note 2, “Acquisitions” for further details.

As of March 31, 2021, we had $ 503.0 million of net intangible assets, of which $ 71.0 million were intangibles with indefinite useful lives.

As of June 30, 2021, we had $ 491.3 million of net intangible assets, of which $ 71.2 million were intangibles with indefinite useful lives.

As of December 31, 2020, we had $ 519.1 million of net intangible assets, of which $ 70.9 million were intangibles with indefinite useful lives.

Changes to intangible assets are as follows:

(in millions) Three Months Ended

March 31, 2021 Year Ended December 31, 2020

(in millions) Six Months Ended

June 30, 2021 Year Ended December 31, 2020

Balance at beginning of period, net of accumulated amortization $ 519.1 $ 503.7

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A summary of intangible assets follows:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in millions) Weighted Average

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Accrued liabilities consist of:

(in millions) March 31,

(in millions) June 30,

2021 December 31,

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Warranty provision is included within “Cost of sales” in our Condensed Consolidated Statements of Operations.

The following table summarizes warranty activity recorded during the three months ended March 31, 2021 and 2020.

The following table summarizes warranty activity recorded during the three and six months ended June 30, 2021 and 2020.

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

(in millions) 2021 2020 2021 2020

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Information Regarding Claims and Costs in the Tort System

As of March 31, 2021, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos.

As of June 30, 2021, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos.

Activity related to asbestos claims during the periods indicated was as follows:

Three Months Ended Year Ended

March 31, December 31,

Three Months Ended Six Months Ended Year Ended

June 30, June 30, December 31,

2021 2020 2021 2020 2020

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Ending claims 29,788 28,927 29,788 28,927 29,138

Of the 29,407 pending claims as of March 31, 2021, approximately 18,000 claims were pending in New York of which approximately 16,000 are non-malignancy claims that were filed over 15 years ago and have been inactive under New York court orders.

Of the 29,788 pending claims as of June 30, 2021, approximately 18,000 claims were pending in New York of which approximately 16,000 are non-malignancy claims that were filed over 15 years ago and have been inactive under New York court orders.

We have tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court.

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We have also tried several other cases resulting in plaintiff verdicts which we paid or settled after unsuccessful appeals.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the three months ended March 31, 2021 and 2020 totaled $ 9.1 million and $ 12.6 million, respectively.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the six months ended June 30, 2021 and 2020 totaled $ 21.3 million and $ 23.9 million, respectively.

In contrast to the recognition of settlement and defense costs, which reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more, and may show some fluctuation from period to period.

Cash payments of settlement amounts are not made until all releases and other required documentation are received by us, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements.

Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the three months ended March 31, 2021 and, 2020 totaled $ 10.8 million and $ 11.7 million, respectively.

Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the six months ended June 30, 2021 and, 2020 totaled $ 20.2 million and $ 19.2 million, respectively.

Detailed below are the comparable amounts for the periods indicated.

Three Months Ended Year Ended

(in millions) March 31, December 31,

Three Months Ended Six Months Ended Year Ended

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

2021 2020 2021 2020 2020

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Defense costs incurred (1)

3.8 3.6 7.4 8.1 15.6

Total costs incurred $ 12.2 $ 11.2 $ 21.3 $ 23.9 $ 50.9

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The amounts shown for settlement and defense costs incurred, and cash payments, are not necessarily indicative of future period amounts, which may be higher or lower than those reported.

Cumulatively through March 31, 2021, we have resolved (by settlement or dismissal) approximately 142,000 claims.

The related settlement cost incurred by us and our insurance carriers is approximately $ 684 million, for an average settlement cost per resolved claim of approximately $ 4,800 .

Cumulatively through June 30, 2021, we have resolved (by settlement or dismissal) approximately 142,000 claims.

The related settlement costs incurred by us and our insurance carriers is approximately $ 692 million, for an average settlement cost per resolved claim of approximately $ 4,900 .

The average settlement cost per claim resolved during the years ended December 31, 2020, 2019 and 2018 was $ 13,900 , $ 15,800 , and $ 11,300 , respectively.

Because claims are sometimes

Because claims are sometimes dismissed in large

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

dismissed in large groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate significantly from period to period.

groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate significantly from period to period.

In addition to large group dismissals, the nature of the disease and corresponding settlement amounts for each claim resolved will also drive changes from period to period in the average settlement cost per claim.

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The liability is reduced when cash payments are made in respect of settled claims and defense costs.

The liability was $ 657 million and $ 670 million as of March 31, 2021 and December 31, 2020, respectively.

The liability was $ 643 million and $ 670 million as of June 30, 2021 and December 31, 2020, respectively.

It is not possible to forecast when cash payments related to the asbestos liability will be fully expended;

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None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments.

The current portion of the total estimated liability at March 31, 2021 and December 31, 2020 is $ 66.5 million, respectively and represents our best estimate of total asbestos costs expected to be paid during the twelve-month period.

The current portion of the total estimated liability at June 30, 2021 and December 31, 2020 is $ 66.5 million and represents our best estimate of total asbestos costs expected to be paid during the twelve-month period.

Such amount is based upon the actuarial model together with our prior year payment experience for both settlement and defense costs.

We have made our best estimate of the costs through 2059.

Through March 31, 2021, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate.

Through June 30, 2021, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate.

In addition to this claims experience, we considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values.

Based on this evaluation, we determined that no change in the estimate was warranted for the period ended March 31, 2021.

Based on this evaluation, we determined that no change in the estimate was warranted for the period ended June 30, 2021.

Insurance Coverage and Receivables.

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The asset is reduced as reimbursements and other payments from insurers are received.

The asset was $ 84 million and $ 87 million as of March 31, 2021 and December 31, 2020, respectively.

The asset was $ 80 million and $ 87 million as of June 30, 2021 and December 31, 2020, respectively.

We review the estimated reimbursement rate with our insurance consultants on a periodic basis in order to confirm overall consistency with our established reserves.

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

The environmental remediation liability as of March 31, 2021 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.

The environmental remediation liability as of June 30, 2021 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.

On June 21, 2021, we completed the sale of substantially all of the property associated with what we have historically called the Goodyear Site for $ 8.7 million, retaining only a small parcel on which our remediation and treatment systems are located.

We will continue to be responsible for all remediation costs associated with the Goodyear Site.

Goodyear Site

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(“UPI”), which became an indirect subsidiary in 1985 when we acquired UPI’s parent company, UniDynamics Corporation.

UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S.

UPI manufactured explosive and pyrotechnic compounds,

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

including components for critical military programs, for the U.S.

government at the Goodyear Site from 1962 to 1993, under contracts with the Department of Defense and other government agencies and certain of their prime contractors.

In 1990, the U.S.

Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and carry out certain

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

remedial actions, which UPI has done.

Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and carry out certain remedial actions, which UPI has done.

Groundwater extraction and treatment systems have been in operation at the Goodyear Site since 1994.

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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 $ 37.5 million and $ 39.8 million as of March 31, 2021 and December 31, 2020, respectively and as described below, a portion is reimbursable by the U.S.

The current portion of the total estimated liability was $ 10.9 million as of March 31, 2021 and December 31, 2020 and represents our best estimate, in consultation with our technical advisors, of total remediation costs expected to be paid during the twelve-month period.

The total estimated gross liability was $ 35.5 million and $ 39.8 million as of June 30, 2021 and December 31, 2020, respectively and as described below, a portion is reimbursable by the U.S.

The current portion of the total estimated liability was $ 10.9 million as of June 30, 2021 and December 31, 2020 and represents our best estimate, in consultation with our technical advisors, of total remediation costs expected to be paid during the twelve-month period.

It is not possible at this point to reasonably estimate the amount of any obligation in excess of our current accruals through the 2027 forecast period because of the aforementioned uncertainties, in particular, the continued significant changes in the Goodyear Site conditions and additional expectations of remediation activities experienced in recent years.

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

As of March 31, 2021 and December 31, 2020, we recorded a receivable of $ 7.3 million and $ 7.8 million, respectively for the expected reimbursements from the U.S.

As of June 30, 2021 and December 31, 2020, we recorded a receivable of $ 7.3 million and $ 7.8 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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Government, is likely to be completed.

It is not possible at this time to reasonably estimate the total amount of any obligation for remediation of the Crab Orchard Site as a whole because the allocation among PRPs, selection of remediation alternatives, and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made.

We notified our insurers of this potential liability and have obtained defense and indemnity coverage, subject to reservations of rights, under certain of our insurance policies.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made.

We notified our insurers of this potential liability and have obtained defense and indemnity coverage, subject to reservations of rights, under certain of our insurance policies.

Roseland, NJ Site

The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary of the Company in 1985 when the Company acquired Resistoflex’s parent company, UniDynamics Corporation.

The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary of ours in 1985 when we acquired Resistoflex’s parent company, UniDynamics Corporation.

Resistoflex manufactured specialty lined pipe and fittings at the site from the 1950s until it was closed in the mid-1980s.

The Company undertook an extensive soil remediation effort at the Roseland Site following its closure and had been monitoring the Site’s condition in the years that followed.

In response to changes in remediation standards, in 2014 the Company began to conduct further site characterization and delineation studies at the Site.

The Company is in the late stages of its remediation activities at the Site, which includes a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air testing, all in accordance with the New Jersey Department of Environmental Protection guidelines and directives.

We undertook an extensive soil remediation effort at the Roseland Site following our closure and had been monitoring the Site’s condition in the years that followed.

In response to changes in remediation standards, in 2014 we began to conduct further site characterization and delineation studies at the Site.

We are in the late stages of our remediation activities at the Site, which include a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air testing, all in accordance with the New Jersey Department of Environmental Protection guidelines and directives.

Other Proceedings

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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, 2021, 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, 2021, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters, and that adequate provision has been made in our financial statements for the potential impact of all such matters.

Note 13 - Financing

Our debt consisted of the following:

(in millions) March 31,

(in millions) June 30,

2021 December 31,

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Total long-term debt $ 843.4 $ 842.9

Debt discounts and debt issuance costs totaled $ 6.2 and $ 6.6 as of each of March 31, 2021 and December 31, 2020, respectively and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

As of March 31, 2021, there were no outstanding borrowings under the commercial paper program.

At December 31, 2020, there was $ 27.2 million of outstanding borrowings under the commercial paper program.

We issued commercial paper of $ 100 million in January 2020 and $ 150 million in December 2020 to fund the acquisitions of I&S and Cummins-Allison, respectively.

Debt discounts and debt issuance costs totaled $ 6.0 million and $ 6.6 million million as of each of June 30, 2021 and December 31, 2020, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

As of June 30, 2021 and December 31, 2021, there was $ 15.0 million and $ 27.2 million of outstanding borrowings under the commercial paper program (the “CP Program”), respectively.

We issued commercial paper of $ 100 million in January 2020 and $ 150 million in December 2019 to fund the acquisitions of I&S and Cummins-Allison Corp.

(“Cummins-Allison”), respectively.

See discussion in Note 2, “Acquisitions” for further details.

Amounts available under the commercial paper program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of the notes outstanding under the commercial paper program at any time not to exceed $ 550 million.

See discussion in Note 16, “Subsequent Events” for further details regarding the CP Program.

We also have a revolving credit agreement permitting borrowings of up to $ 550 million which expires in December 2022.

The undrawn portion of this revolving credit agreement is also available to serve as a backstop facility for the issuance of commercial paper.

The undrawn portion of this revolving credit agreement is also available to serve as a backstop facility for the issuance of

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

commercial paper.

In the first half of 2020, we repaid the outstanding amounts related to borrowings of $ 67 million used to fund the I&S acquisition in January 2020.

See discussion in Note 2, “Acquisitions” for further details.

As of March 31, 2021 and December 31, 2020, there were no outstanding borrowings.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2021 and December 31, 2020, there were no outstanding borrowings.

See discussion in Note 16, “Subsequent Events” for further details regarding our new revolving credit agreement.

In April 2020, to enhance financial flexibility and maintain maximum liquidity in response to the uncertainty in the global markets resulting from the COVID-19 pandemic, we entered into a senior unsecured 364 -day credit facility (the “ 364 -Day Credit Agreement”).

As of March 31, 2021 and December 31, 2020, there was $ 346.9 million and $ 348.5 million outstanding under the 364 -Day Credit Agreement, respectively.

On April 15, 2021, we repaid the amount outstanding under the 364-Day Credit Agreement with cash on hand and the issuance of commercial paper.

As of December 31, 2020, there was $ 348.5 million outstanding under the 364 -Day Credit Agreement.

Note 14 - Fair Value Measurements

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We do not hold or issue derivative financial instruments for trading or speculative purposes.

Foreign exchange contracts are not designated as hedging instruments and had a notional value of $ 44.2 million and $ 34.2 million as of March 31, 2021 and December 31, 2020, respectively.

Foreign exchange contracts are not designated as hedging instruments and had a notional value of $ 33.0 million and $ 34.2 million as of June 30, 2021 and December 31, 2020, 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 were $ 0.6 million and less than $ 0.1 million as of March 31, 2021 and December 31, 2020, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were and $ 0.0 million and $ 0.1 million as of March 31, 2021 and December 31, 2020, respectively.

Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and were $ 0.2 million and less than $ 0.1 million as of June 30, 2021 and December 31, 2020, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were $ 0.0 million and $ 0.1 million as of June 30, 2021 and December 31, 2020, respectively.

Available-for-sale securities consist of marketable debt securities and rabbi trust investments.

Marketable debt securities consist of commercial paper which are measured at fair value using prices for comparable securities in active markets, and are therefore classified within Level 2 of the valuation hierarchy.

The fair value of the commercial paper was $ 10.0 million and $ 30 million as of March 31, 2021 and December 31, 2020, respectively.

The fair value of the commercial paper was $ 0.0 million and $ 30.0 million as of June 30, 2021 and December 31, 2020, respectively.

These investments are included in “Other current assets” on our Condensed Consolidated Balance Sheets.

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These investments are measured at fair value using quoted market prices in an active market, and are therefore classified within Level 1 of the valuation hierarchy.

The fair value of available-for-sale securities was $ 1.5 million as of March 31, 2021 and December 31, 2020.

The fair value of available-for-sale securities was $ 1.5 million as of June 30, 2021 and December 31, 2020.

These investments are included in “Other assets” on our Condensed Consolidated Balance Sheets.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Long-term debt rates currently available to us for debt with similar terms and remaining maturities are used to estimate the fair value for debt issues that are not quoted on an exchange.

The estimated fair value of total debt, measured using Level 2 inputs, was $ 913.4 million and $ 954.8 million as of March 31, 2021 and December 31, 2020, respectively.

The estimated fair value of total debt, measured using Level 2 inputs, was $ 986.6 million and $ 954.8 million as of June 30, 2021 and December 31, 2020, respectively.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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These actions include workforce reductions of approximately 1,200 employees, or about 11 % of our global workforce, and the exiting of two leased office facilities and one leased warehouse facility.

2019 Repositioning - In the fourth quarter of 2019, we initiated actions to consolidate two manufacturing operations in Europe within our Fluid Handling segment.

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.

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We do not expect to incur additional restructuring charges.

Restructuring gain, net

During the three-month periods ended March 31, 2021 and 2020, we recorded a net restructuring gain of $ 13.1 million and $ 1.2 million, respectively, primarily related to the 2017 repositioning actions described above.

These gains are reflected in the Condensed Consolidated Statements of Operations as “Restructuring gain, net.”

Restructuring gain, net by segment are as follows:

Three Months Ended March 31,

Restructuring (gains) charges, net

We recorded restructuring (gains) charges, net which are reflected in the Condensed Consolidated Statements of Operations, as follows:

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

(in millions) 2021 2020 2021 2020

Fluid Handling 1

Aerospace & Electronics $ — $ 4.7 $ — $ 4.7

Process Flow Technologies 1

— 4.7 ( 12.6 ) 4.7

Payment & Merchandising Technologies 2

Total restructuring gain, net 1

( 0.2 ) 13.8 ( 0.7 ) 12.6

1 We also recorded related costs of $ 1.4 million and $ 1.3 million for the three months ended March 31, 2021 and 2020, respectively.

These costs primarily relate to facility consolidations and are recorded within Cost of sales and Selling, general and administrative.

Total restructuring (gains) charges, net 3

$ ( 0.2 ) $ 23.2 $ ( 13.3 ) $ 22.0

1 We also recorded related costs of $ 2.4 million and $ 0.5 million for the three months ended June 30, 2021 and 2020, respectively, and $ 3.8 million and $ 1.9 million for the six months ended June 30, 2021 and 2020, respectively.

These costs are recorded within Cost of sales and Selling, general and administrative.

2 We also recorded related costs of $ 0.8 million for the three months ended June 30, 2020 and $ 0.7 million for the six months ended June 30, 2020.

These costs are recorded within Cost of sales and Selling, general and administrative.

3 We also recorded related costs of $ 2.4 million and $ 1.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 3.8 million and $ 2.6 million for the six months ended June 30, 2021 and 2020, respectively.

These costs are recorded within Cost of sales and Selling, general and administrative.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our restructuring (gain) charges, net by program, cost type and segment for the three months ended March 31, 2021 and 2020:

Three months ended March 31, 2021 Three months ended March 31, 2020

The following table summarizes our restructuring (gains) charges, net by program, cost type and segment for the three months ended June 30, 2021 and 2020:

Three months ended June 30, 2021 Three months ended June 30, 2020

(in millions) Severance Other Total Severance Other Total

Aerospace & Electronics $ — $ — $ — $ 4.7 $ — $ 4.7

Process Flow Technologies — — — 4.7 — 4.7

Payment & Merchandising Technologies — — — 13.8 1.0 14.8

2020 Repositioning $ — $ — $ — $ 23.2 $ 1.0 $ 24.2

Fluid Handling $ 0.1 $ — $ 0.1 $ — $ — $ —

Payment & Merchandising Technologies ( 0.2 ) — ( 0.2 ) ( 1.0 ) — ( 1.0 )

2017 Repositioning $ ( 0.2 ) $ — $ ( 0.2 ) $ ( 1.0 ) $ — $ ( 1.0 )

Fluid Handling 1

Total $ ( 0.2 ) $ — $ ( 0.2 ) $ 22.2 $ 1.0 $ 23.2

The following table summarizes our restructuring (gains) charges, net by program, cost type and segment for the six months ended June 30, 2021 and 2020:

Six months ended June 30, 2021 Six months ended June 30, 2020

(in millions) Severance Other Total Severance Other Total

Aerospace & Electronics $ — $ — $ — $ 4.7 $ — $ 4.7

Process Flow Technologies — — — 4.7 — 4.7

Payment & Merchandising Technologies ( 0.5 ) — ( 0.5 ) 13.8 1.0 14.8

2020 Repositioning $ ( 0.5 ) $ — $ ( 0.5 ) $ 23.2 $ 1.0 $ 24.2

Process Flow Technologies $ 0.1 $ 0.1 $ — $ — $ —

2019 Repositioning $ 0.1 $ — $ 0.1 $ — $ — $ —

Process Flow Technologies 1

$ — $ ( 12.7 ) $ ( 12.7 ) $ — $ — $ —

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Total $ ( 0.6 ) $ ( 12.7 ) $ ( 13.3 ) $ 22.5 $ ( 0.5 ) $ 22.0

1 Reflects a pre-tax gain related to the sale of real estate in both 2021 and 2020

1 Reflects a pre-tax gain related to the sale of real estate in 2021

2 Reflects a pre-tax gain related to the sale of real estate in 2020

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the cumulative restructuring costs, net incurred through March 31, 2021 and the remaining costs related to facility consolidations expected to complete these actions as of March 31, 2021:

Cumulative Restructuring Costs, Net Remaining Costs

The following table summarizes the cumulative restructuring costs, net incurred through June 30, 2021.

We do not expect to incur additional facility consolidation costs to complete these actions as of June 30, 2021.

Cumulative Restructuring Costs, Net

(in millions) Severance Other Total

Fluid Handling $ 3.8 $ — $ 3.8 $ —

Process Flow Technologies $ 3.8 $ — $ 3.8

Payment & Merchandising Technologies 16.1 4.6 20.7

Aerospace & Electronics 6.5 — 6.5

Engineered Materials 0.6 — 0.6 —

2020 Repositioning $ 26.4 $ 4.6 $ 31.0

Fluid Handling $ 16.1 $ — $ 16.1 $ 2.1

Process Flow Technologies $ 16.1 $ — $ 16.1

2019 Repositioning $ 16.1 $ — $ 16.1

Fluid Handling $ 13.5 $ ( 12.7 ) $ 0.8 $ —

Process Flow Technologies $ 13.5 $ ( 12.7 ) $ 0.8

Payment & Merchandising Technologies 11.5 0.7 12.2

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Restructuring Liability

The following table summarizes the accrual balances related to these restructuring (gain) charges by program:

The following table summarizes the accrual balances related to these restructuring (gains) charges by program:

(in millions) 2020 Repositioning 2019 Repositioning 2017 Repositioning Total

Balance at December 31, 2020 (c)

Balance at December 31, 2020 (b)

$ 4.2 $ 16.0 $ 4.7 $ 24.9

Adjustments (b)

Adjustments (a)

( 0.5 ) — ( 0.2 ) ( 0.7 )

Utilization ( 3.1 ) ( 2.7 ) ( 0.3 ) ( 6.1 )

Balance at March 31, 2021 (c)

Balance at June 30, 2021 (b)

$ 0.6 $ 13.4 $ 4.2 $ 18.2

(a) Included within Restructuring gain, net in the Condensed Consolidated Statements of Operations

(b) Included within Restructuring gain, net in the Condensed Consolidated Statements of Operations and reflects changes in estimates for increases and decreases in costs related to our restructuring programs

(a) Included within Restructuring (gains) charges, net in the Condensed Consolidated Statements of Operations and reflects changes in estimates for increases and decreases in costs related to our restructuring programs

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 16- Subsequent Event

On July 28, 2021, we entered into a $ 650 million, 5 -year Revolving Credit Agreement (the “2021 Facility”), which replaced the existing $ 550 million revolving credit facility.

The 2021 Facility allows us to borrow, repay, or to the extent permitted by the agreement, prepay and re-borrow funds at any time prior to the stated maturity date.

Interest on loans made under the 2021 Facility accrues, at our option, at a rate per annum equal to (1) a base rate, plus a margin ranging from 0.00 % to 0.50 % depending upon the ratings by S&P and Moody’s of our senior unsecured long-term debt (the "Index Debt Rating"), or (2) an adjusted LIBO rate or the applicable replacement rate (determined based on “hardwired” LIBOR transition provisions consistent with those published by the Alternative References Rates Committee) for an interest period to be selected by us, plus a margin ranging from 0.805 % to 1.50 % depending upon the Index Debt Rating.

The 2021 Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations on us and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates and hedging arrangements.

We must also maintain a debt to capitalization ratio not to exceed 0.65 to 1.00 at all times.

The 2021 Facility also provides for customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA events, material judgments and a change in control of us.

On July 28, 2021, we increased the size of the CP Program to permit the issuance of short-term, unsecured commercial paper notes in an aggregate principal amount not to exceed $ 650 million at any time outstanding.

Prior to this increase, the CP Program permitted us to issue commercial paper notes in an aggregate principal amount not to exceed $ 550 million at any time outstanding.

The other terms and conditions of the CP program remain the same.

Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time.

The notes will have maturities of up to 397 days from date of issue.

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