What changed in this filing

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Item 1. Financial Statements

2023-11-06 compared with 2023-08-07 · 150 added, 132 removed, 482 unchanged (37% of the section changed)

3 unchanged sentences

CONSOLIDATED AND COMBINED CONDENSED 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) 2023 2022 2023 2022

23 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

June 30, June 30,

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Nine Months Ended

September 30, September 30,

(in millions) 2023 2022 2023 2022

Net income attributable to common shareholders $ 51.9 $ 44.6 $ 138.8 $ 142.9

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

Components of other comprehensive loss, net of tax

Currency translation adjustment ( 21.1 ) ( 60.7 ) ( 19.3 ) ( 122.9 )

Changes in pension and postretirement plan assets and benefit obligation, net of tax ( 0.5 ) — ( 1.5 ) ( 0.4 )

Other comprehensive income (loss), net of tax ( 3.6 ) ( 46.3 ) 0.8 ( 62.6 )

Comprehensive income attributable to common shareholders $ 39.6 $ 2.5 $ 87.7 $ 35.7

Other comprehensive loss, net of tax ( 21.6 ) ( 60.7 ) ( 20.8 ) ( 123.3 )

Comprehensive income (loss) attributable to common shareholders $ 30.3 $ ( 16.1 ) $ 118.0 $ 19.6

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

2 unchanged sentences

CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS

(in millions) June 30,

(in millions) September 30,

2023 December 31,

1 unchanged sentence

Cash and cash equivalents $ 229.0 $ 230.7

Accounts receivable, net of allowance for credit losses of $ 6.5 as of June 30, 2023 and $ 6.1 as of December 31, 2022

Accounts receivable, net of allowance for credit losses of $ 10.1 as of September 30, 2023 and $ 6.1 as of December 31, 2022

Inventories, net:

19 unchanged sentences

CONSOLIDATED AND COMBINED CONDENSED BALANCE SHEETS

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

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

2023 December 31,

30 unchanged sentences

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2023 2022

4 unchanged sentences

Stock-based compensation expense 7.4 6.8

Defined benefit plans and postretirement credit ( 0.4 ) ( 0.1 )

Deferred income taxes 4.8 13.0

Cash used for operating working capital ( 36.7 ) ( 35.9 )

Other ( 2.8 ) 6.8

Cash (used for) provided by operating working capital ( 12.2 ) 4.5

Total provided by operating activities 197.8 230.9

7 unchanged sentences

Repayment of long-term debt ( 300.0 ) —

Proceeds from revolving credit facility 20.0 —

Repayment of revolving credit facility ( 20.0 ) —

Proceeds from term loan 350.0 —

3 unchanged sentences

Effect of exchange rates on cash and cash equivalents ( 6.9 ) ( 35.0 )

Increase in cash and cash equivalents 46.2 28.0

(Decrease) increase in cash and cash equivalents ( 1.7 ) 95.1

Cash and cash equivalents at beginning of period 230.7 101.2

4 unchanged sentences

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2023 2022

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

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

Accounts receivable $ 23.8 $ ( 12.4 )

42 unchanged sentences

BALANCE June 30, 2023 $ 72.4 $ 1,722.6 $ 35.3 $ ( 130.7 ) $ ( 844.4 ) $ — $ 855.2

Net income — — 51.9 — — — 51.9

Cash dividends ($ 0.14 per share)

— — ( 7.9 ) — — — ( 7.9 )

Crane transfer (Note 1) — ( 7.5 ) — — — — ( 7.5 )

Exercise of stock options, net of shares reacquired of 7,465 shares

— — — — 0.2 — 0.2

Impact from settlement of share-based awards, net of shares acquired — ( 0.3 ) — — 0.3 — —

Stock-based compensation expense — 2.3 — — — — 2.3

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — ( 0.5 ) — — ( 0.5 )

Currency translation adjustment — — — ( 21.1 ) — — ( 21.1 )

BALANCE September 30, 2023 $ 72.4 $ 1,717.1 $ 79.3 $ ( 152.3 ) $ ( 843.9 ) $ — $ 872.6

1 Reclassification of stock-based compensation due to modification resulting from equity award conversions.

See Note 1, “Organization and Basis of Presentation” for additional information.

See Note 1, “Organization and Basis of

Presentation” for additional information.

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED CONDENSED STATEMENTS OF CHANGES IN EQUITY

(in millions) Crane Net Investment Accumulated

13 unchanged sentences

BALANCE June 30, 2022 $ 866.0 $ ( 134.9 ) $ 731.1

Net income 44.6 — 44.6

Stock-based compensation expense 2.3 — 2.3

Currency translation adjustment — ( 60.7 ) ( 60.7 )

Net transfers to Crane ( 15.7 ) — ( 15.7 )

BALANCE September 30, 2022 $ 897.2 $ ( 195.6 ) $ 701.6

See Notes to Unaudited Consolidated and Combined Condensed Financial Statements.

18 unchanged sentences

Following the consummation of the Separation, our common stock is listed under the symbol “CXT” on the New York Stock Exchange.

Due to SpinCo’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to ours, among other factors, SpinCo was considered to be the “accounting spinnor” and therefore will be the “accounting successor” to Holdings for accounting purposes, notwithstanding the legal form of the Separation.

Due to SpinCo’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to ours, among other factors, SpinCo was considered to be the “accounting spinnor” and therefore is the “accounting successor” to Holdings for accounting purposes, notwithstanding the legal form of the Separation.

Therefore, following the Separation, our historical financial statements are comprised solely of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings.

In connection with the Separation, we entered into a $ 350 million, 3-year term loan facility, and, on April 3, 2023, prior to the Separation, SpinCo paid a one-time cash dividend in the amount of $ 275 million to Holdings.

In connection with the Separation, we entered into a $ 350 million, three-year term loan facility, and, on April 3, 2023, prior to the Separation, SpinCo paid a one-time cash dividend in the amount of $ 275 million to Holdings.

See Note 12, “Financing” and Note 2, “Related Parties" for additional information.

In addition, Holdings transferred $ 84 million of cash to us as part of the Separation.

In connection with the Separation, we established our common stock and treasury stock as part of the distribution from SpinCo.

As of June 30, 2023, we reflected $ 72.4 million of common stock at par value and $ 844.4 million of treasury stock at market value on the Unaudited Consolidated and Combined Condensed Financial Statements.

As a result of the Separation, net assets of $ 378.9 million were contributed to the Business and recorded on the Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment.” During the three months ended September 30, 2023, an additional $ 7.5 million of liabilities attributable to the Business were identified.

The correction has been reflected on the Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane transfer” in the three months ended September 30, 2023.

Stock-based Compensation

Prior to the Separation, Crane NXT employees participated in Holdings equity incentive plans, including equity awards of stock options, restricted share units, performance-based and time-based restricted share units and deferred stock units in respect of Holdings common shares.

Prior to the Separation, Crane NXT employees and directors participated in Holdings equity incentive plans and received equity awards under those plans in the forms of stock options, restricted share units, performance-based and time-based restricted share units and deferred stock units in respect of Holdings common shares.

Crane NXT Unaudited Consolidated and Combined Condensed Financial Statements reflect compensation expense for these stock-based plans associated with the portion of the Holdings equity incentive plans in which Crane NXT employees and directors participated.

A s a result of the Separation, all outstanding stock-based compensation awards of Holdings were exchanged for similarly valued stock-based compensation awards of either SpinCo, Crane NXT or both.

As a result of the Separation, all outstanding stock-based compensation awards of Holdings were exchanged for similarly valued stock-based compensation awards of either SpinCo, Crane NXT or both.

The exchanged awards are subject to the same service vesting requirements as the original awards.

At June 30, 2023, there are 0.5 million options outstanding related to Crane NXT associates and 0.6 million options outstanding related to SpinCo associates.

Upon the exchange, there were 0.5 million options outstanding related to Crane NXT associates and 0.6 million options outstanding related to SpinCo associates.

There was no significant incremental stock-based compensation expense recorded as a result of the equity award conversions.

The modification of the performance-based restricted share units resulted in a $ 0.8 million liability as of June 30, 2023, which is included in “Accrued liabilities” in our Unaudited Consolidated and Combined Condensed Financial Statements.

The modification of the performance-based restricted share units resulted in a liability recorded upon Separation.

The amount of the liability was $ 1.2 million as of September 30, 2023 and is included in “Accrued liabilities” in our Unaudited Consolidated and Combined Condensed Financial Statements.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

Separation Agreements

On April 3, 2023, we entered into definitive agreements with SpinCo in connection with the Separation.

The agreements set forth the terms and conditions of the Separation and provide a framework for Crane NXT’s relationship with SpinCo following

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

the Separation, including the allocation between Crane NXT and SpinCo of Crane NXT’s and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.

The agreements set forth the terms and conditions of the Separation and provide a framework for Crane NXT’s relationship with SpinCo following the Separation, including the allocation between Crane NXT and SpinCo of Crane NXT’s and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.

These agreements include the Separation and Distribution Agreement (as described below), which contains certain key provisions related to the Separation, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and an Intellectual Property Matters Agreement (each, as described below).

4 unchanged sentences

The Transition Services Agreement provides for the transition of Holdings into two independent, publicly-traded companies following the consummation of the Separation, and provides each party time to replace certain assets and employees that have been allocated to the other party.

Under the Transition Services Agreement, we and SpinCo each have agreed to provide transition service support to the other for various periods of time of up to 18 months in the areas of finance, tax, human resources, legal and information technology.

Under the Transition Services Agreement, we agreed with SpinCo to provide transition service support to the other for various periods of time of up to 18 months in the areas of finance, tax, human resources, legal and information technology.

Such services are provided on customary commercial terms, and each such service can be terminated prior to the expected termination date of such service if it is no longer required.

The Transition Services Agreement was negotiated in the context of a parent-subsidiary relationship and in the context of the Separation.

Transactions under this agreement did not have a material impact to our financial statements for the three-and-nine-months ended September 30, 2023.

Tax Matters Agreement

12 unchanged sentences

The Business' financial statements for periods prior to the Separation are prepared on a "carve-out" basis, as described below.

Crane NXT 's financial statements for the period from April 3, 2023 through June 30, 2023 is the Business’ first consolidated financial statements based on the reported results of Crane NXT as a stand-alone company.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

Basis of Presentation Prior to the Separation

Prior to the Separation, the Business operated as Holdings’ Payment & Merchandising Technologies (“P&MT”) segment;

consequently, stand-alone financial statements prior to the Separation have not been prepared for the Business.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

consequently, stand-alone financial statements for periods prior to the Separation were not prepared for the Business.

The Unaudited Consolidated and Combined Condensed Financial Statements of Operations include all revenues and costs directly attributable to the Business, including costs for facilities, functions and services used by the Business.

3 unchanged sentences

Current and deferred income taxes have been determined based on the stand-alone results of the Business.

However, because the Business filed group tax returns as part of Holdings in certain jurisdictions, the Business’ actual tax balances may differ from that reported.

However, because the Business filed group tax returns as part of Holdings in certain jurisdictions, the Business’ actual tax balances may differ from those reported.

The Business’ portion of income taxes for certain jurisdictions is deemed to have been settled in the period the related tax expense was recorded.

17 unchanged sentences

These services included treasury, tax, accounting, human resources, audit, legal, purchasing, information technology and other such services.

The costs associated with these services generally included all payroll and benefit costs, as well as overhead costs related to the support functions.

Holdings also allocated costs associated with corporate insurance coverage and medical, pension, post-retirement and other health plan costs for employees participating in Holdings sponsored plans.

Allocations were based on several utilization measures including headcount, proportionate usage and

The costs associated with these services generally included all payroll and benefit costs,

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

relative net sales.

as well as overhead costs related to the support functions.

Holdings also allocated costs associated with corporate insurance coverage and medical, pension, post-retirement and other health plan costs for employees participating in Holdings sponsored plans.

Allocations were based on several utilization measures including headcount, proportionate usage and relative net sales.

All such amounts were deemed incurred and settled by the Business in the period in which the costs were recorded.

The allocated centralized costs for the Business prior to the Separation were $ 13.5 million for the three months ended March 31, 2023, and were $ 7.3 million and $ 14.6 million for the three-and-six-months ended June 30, 2022.

They are included in “Selling, general and administrative” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

The allocated centralized costs for the Business were $ 0.0 million and $ 13.5 million for the three-and-nine-months ended September 30, 2023, respectively, and $ 8.7 million and $ 23.3 million for the three-and-nine-months ended September 30, 2022, respectively.

These costs are included in “Selling, general and administrative” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

In the opinion of our management, the expense and cost allocations have been determined on a basis considered to be a reasonable reflection of the utilization of services provided to or for the benefit received by the Business during 2022 and 2023 prior to the Separation.

3 unchanged sentences

Separation Costs .

In connection with the Separation, we have incurred transaction related expenses of $ 15.2 million and $ 17.0 million for the three-and-six-months ended June 30, 2023, respectively, recorded in “Selling, general and administrative” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

In connection with the Separation, we have incurred transaction related expenses of $ 2.7 million and $ 19.7 million for the three-and-nine-months ended September 30, 2023, respectively, recorded in “Selling, general and administrative” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

Expenses primarily consist of professional service fees.

Crane NXT did no t incur costs in relation to the Separation for the three-and-six-months ended June 30, 2022.

There were no allocated costs in relation to the Separation for the three-and-nine-months ended September 30, 2022.

Cash Management and Financing.

5 unchanged sentences

As such, the Business’ cash that was not included in the centralized cash management and financing programs is classified as “Cash and cash equivalents” on our Unaudited Consolidated and Combined Condensed Balance Sheets.

During the three months ended June 30, 2023, net assets of $ 379 million were contributed to the Business.

Included in the net assets was a one-time cash dividend of $ 275 million issued on April 3, 2023, prior to the Separation, from SpinCo to Holdings, as well as a cash transfer of $ 84 million from Holdings to us.

These contributions of net assets are recorded as “Dividend from Crane” and “Net transfers from Crane”, respectively, on the Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment”.

As a result of the Separation, a one-time cash dividend of $ 275 million was issued on April 3, 2023, prior to the Separation, from SpinCo to Holdings, as well as a cash transfer of $ 84 million from Holdings to us.

These contributions of net assets are recorded on the Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment.”

Accounts Receivable and Payable.

Certain related party transactions between the Business and Holdings have been included within “Crane Net Investment” in the Unaudited Consolidated and Combined Condensed Balance Sheets in the historical periods presented when the related party transactions were not settled in cash.

Prior to the Separation, “Crane Net Investment” included related party loans receivable due from Holdings and its affiliates of $ 0.0 million and $ 27.2 million as of March 31, 2023, and December 31, 2022, respectively.

“Crane Net Investment” included related party loans payable due to Holdings and its affiliates of $ 242.9 million and $ 232.1 million as of March 31, 2023, and December 31, 2022, respectively.

We recorded related party interest expense related to the loan activity with Holdings and its affiliates of $ 2.5 million for the three months ended March 31, 3023;

and $ 3.6 million and $ 7.3 million for the three-and-six-months ended June 30, 2022, respectively, which are included in the Business’ results as “Related party interest expense” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

As of December 31, 2022, “Crane Net Investment” included related party loans receivable due from Holdings and its affiliates of $ 27.2 million, and related party loans payable due to Holdings and its affiliates of $ 232.1 million.

We recorded related party interest expense related to the loan activity with Holdings and its affiliates of $ 0.0 million and $ 2.5 million for the three-and-nine-months ended September 30, 2023, respectively;

and $ 3.6 million and $ 10.9 million for the three-and-nine-months ended September 30, 2022, respectively, which are included in the Business’ results as “Related party interest expense” in the Unaudited Consolidated and Combined Condensed Statements of Operations.

The total effect of the settlement of these related party transactions is reflected with “Net transfers to Crane” as a financing activity in the Unaudited Consolidated and Combined Condensed Statements of Cash Flows.

Accounts receivable, net includes $ 0.1 million and $ 0.1 million as of March 31, 2023, and December 31, 2022, respectively, and Accounts payable includes $ 1.2 million and $ 1.7 million as of March 31, 2023, and December 31, 2022, respectively, related to such transactions.

Additionally, prior to the Separation, certain transactions between the Business and other Holdings affiliates were cash-settled on a current basis and, therefore, are reflected in Accounts receivable, net and Accounts payable in the Unaudited Consolidated and Combined Condensed Balance Sheets as of December 31, 2022 in the amounts of $ 0.1 million and $ 1.7 million, respectively.

As of September 30, 2023, there were no outstanding Accounts receivable, net or Accounts payable with other Holdings affiliates related to such transactions.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

1 unchanged sentence

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

As of June 30, 2023, we had two reportable segments:

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

Crane Payment Innovations and Crane Currency.

1 unchanged sentence

Corporate consists of corporate office expenses including compensation and benefits for corporate employees, occupancy, depreciation, and other administrative costs.

A brief description of each of our segments as of June 30, 2023, is as follows:

A brief description of each of our segments as of September 30, 2023, is as follows:

Crane Payment Innovations

6 unchanged sentences

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) 2023 2022 2023 2022

12 unchanged sentences

Income before income taxes $ 67.9 $ 64.4 $ 178.4 $ 189.4

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

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

Crane Payment Innovations $ 1,251.4 $ 1,266.1

3 unchanged sentences

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

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

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

Crane Payment Innovations $ 613.4 $ 622.4

4 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) 2023 2022 2023 2022

3 unchanged sentences

Total Crane Payment Innovations $ 221.6 $ 220.8 $ 671.3 $ 643.2

Crane Currency

Banknotes and Security Products 126.5 122.6 231.8 244.2

Total Crane Currency $ 126.5 $ 122.6 231.8 244.2

Crane Currency Products 131.3 114.3 363.1 358.5

Net sales $ 352.9 $ 335.1 $ 1,034.4 $ 1,001.7

1 unchanged sentence

The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled.

As of June 30, 2023, our performance obligations were $ 485.1 million.

We expect to recognize approximately 83 % of our remaining performance obligations as revenue in 2023, and the remainder in 2024.

As of September 30, 2023, our performance obligations were $ 454.9 million.

We expect to recognize approximately 61 % of our remaining performance obligations as revenue in 2023, and the remainder primarily in 2024.

Contract Assets and Contract Liabilities

7 unchanged sentences

Net contract assets and contract liabilities consisted of the following:

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

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

Contract assets $ 38.7 $ 31.8

Contract liabilities $ 75.8 $ 93.6

We recognized revenue of $ 29.0 million and $ 56.3 million during the three-and-six-months ended June 30, 2023, related to contract liabilities as of December 31, 2022.

We recognized revenue of $ 17.5 million and $ 73.8 million during the three-and- nine -months ended September 30, 2023, related to contract liabilities as of December 31, 2022.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

1 unchanged sentence

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

Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units that were issued to Crane NXT and SpinCo employees.

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

3 unchanged sentences

For periods prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no Crane NXT stock-based awards outstanding prior to the Separation.

The weighted average number of common shares outstanding during the three-and-six-months ended June 30, 2023 was based on the weighted average number of common shares after the Separation.

Three Months Ended Six Months Ended

June 30, June 30,

The weighted average number of common shares outstanding during the three-and-nine-months ended September 30, 2023 was based on the weighted average number of common shares after the Separation.

Three Months Ended Nine Months Ended

September 30, September 30,

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

5 unchanged sentences

Earnings per diluted share $ 0.90 $ 0.79 $ 2.42 $ 2.52

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 were 0.5 million for the three months ended June 30, 2023.

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 were 0.4 million for the three months ended September 30, 2023 and 0.4 million for the six months from the Separation ended September 30, 2023.

Note 6 - Changes in Accumulated Other Comprehensive Loss

3 unchanged sentences

Balance as of December 31, 2022 $ 9.0 $ ( 140.5 ) $ ( 131.5 )

Other comprehensive income before reclassifications — 1.8 1.8

Other comprehensive loss before reclassifications — ( 19.3 ) ( 19.3 )

Amounts reclassified from accumulated other comprehensive loss ( 1.5 ) — ( 1.5 )

Net period other comprehensive (loss) income ( 1.0 ) 1.8 0.8

Balance as of June 30, 2023 $ 8.0 $ ( 138.7 ) $ ( 130.7 )

Net of tax detriment of $ 1.9 million and $ 2.1 million as of June 30, 2023 and December 31, 2022, respectively.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

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, 2023, and 2022.

Net period other comprehensive loss ( 1.5 ) ( 19.3 ) ( 20.8 )

Balance as of September 30, 2023 $ 7.5 $ ( 159.8 ) $ ( 152.3 )

Net of tax detriment of $ 1.8 million and $ 2.1 million as of September 30, 2023 and December 31, 2022, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three-and-nine - month periods ended September 30, 2023, and 2022.

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

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

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

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

(in millions) 2023 2022 2023 2022

9 unchanged sentences

Note 7 - Defined Benefit and Postretirement Benefits

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

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

Pension Postretirement

4 unchanged sentences

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

Amortization of net loss — 0.2 ( 0.2 ) —

Net periodic benefit $ — $ — $ ( 0.2 ) $ ( 0.1 )

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

Amortization of net (gain) loss — 0.3 ( 0.2 ) —

Net periodic expense (benefit) $ 0.1 $ 0.2 $ ( 0.3 ) $ ( 0.1 )

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

Pension Postretirement

4 unchanged sentences

Amortization of prior service cost ( 0.5 ) ( 0.5 ) ( 0.8 ) ( 0.8 )

Amortization of net loss — 0.4 ( 0.3 ) —

Net periodic benefit $ — $ — $ ( 0.4 ) $ ( 0.1 )

Amortization of net (gain) loss — 0.7 ( 0.5 ) —

Net periodic expense (benefit) $ 0.1 $ 0.2 $ ( 0.7 ) $ ( 0.2 )

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

3 unchanged sentences

Expected contributions in 2023

Amounts contributed during the six months ended June 30, 2023 $ 1.2 $ 1.7

Amounts contributed during the nine months ended September 30, 2023 $ 2.1 $ 1.4

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED 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,

2023 2022 2023 2022

Effective Tax Rate 23.5 % 30.7 % 22.2 % 24.6 %

Our effective tax rate for the three months ended June 30, 2023, is higher than the prior year’s comparable period primarily due to transaction related expenses to support the Separation, partially offset by foreign tax credits.

Our effective tax rate for the six months ended June 30, 2023, is consistent with the prior year’s comparable period.

Our effective tax rates for the three-and-six-months ended June 30, 2023, are higher than the statutory U.S.

federal tax rate of 21% primarily due to net permanent increases that impact the statutory tax rate.

The Tax Matters Agreement specifies the rights, responsibilities, and obligations after the Separation with respect to tax liabilities and benefits.

The agreement specifies the portion, if any, of this tax liability for which we and SpinCo will bear responsibility, and we and SpinCo agreed to indemnify each other against any amounts for which they are not responsible.

The change from a “carve-out” basis to a stand-alone entity basis resulted in an increase in uncertain tax positions of $ 15.6 million and a related $ 8.5 million tax indemnification receivable from SpinCo adjusted through “Net transfers from Crane” in our Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment”.

As of June 30, 2023, we had gross unrecognized tax benefits of $ 23.9 million included in “Other liabilities” in our Unaudited Consolidated and Combined Condensed Balance Sheets.

The balances computed on a stand-alone entity basis resulted in a decrease in Accrued Income Tax liabilities of approximately $ 10.2 million adjusted through “Net transfers from Crane” in our Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment”.

As of June 30, 2023, we had a future tax obligation of $ 8.2 million included in “U.S.

and foreign taxes on income” in our Unaudited Consolidated and Combined Condensed Balance Sheets.

Our effective tax rates for the three-and-nine-months ended September 30, 2023 are lower than the prior year’s comparable periods primarily due to a foreign tax credit return to provision adjustment recorded in the prior year’s comparable periods.

Our effective tax rates for the three-and-nine-months ended September 30, 2023 are higher than the statutory U.S.

federal tax rate of 21% primarily due to US state income taxes.

The Tax Matters Agreement, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits (including any taxes imposed that are attributable to the failure of the Distribution and certain related transactions to qualify as a transaction that is tax-free for U.S.

federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

Although enforceable as between the parties, the Tax Matters Agreement will not be binding on the Internal Revenue Service or other tax authorities.

The change from presenting our financials on a “carve-out” basis to a stand-alone entity basis at the time of the Separation resulted in an increase in uncertain tax positions of $ 15.6 million and a related $ 8.5 million tax indemnification receivable from SpinCo adjusted in our Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment” upon the Separation.

As of September 30, 2023, we had gross unrecognized tax benefits of $ 23.8 million included in “Other liabilities” in our Unaudited Consolidated and Combined Condensed Balance Sheets.

The Accrued Income Tax Liability computed on a stand-alone entity basis resulted in a decrease of approximately $ 10.2 million adjusted in our Unaudited Consolidated and Combined Condensed Statements of Changes in Equity through “Crane Net Investment” upon the Separation.

Note 9 - Goodwill and Intangible Assets

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Currency translation ( 9.0 ) ( 0.3 ) ( 9.3 )

Balance as of June 30, 2023

Balance as of September 30, 2023

$ 613.4 $ 213.9 $ 827.3

As of June 30, 2023, we had $ 325.0 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives.

As of September 30, 2023, we had $ 314.3 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives.

As of December 31, 2022, we had $ 344.9 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

Changes to intangible assets are as follows:

(in millions) Six Months Ended June 30, 2023 Year Ended December 31, 2022

(in millions) Nine Months Ended September 30, 2023 Year Ended December 31, 2022

Balance at beginning of period, net of accumulated amortization $ 344.9 $ 388.5

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Balance at end of period, net of accumulated amortization $ 314.3 $ 344.9

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

A summary of intangible assets are as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in millions) Weighted Average

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Accrued liabilities consist of:

(in millions) June 30,

(in millions) September 30,

2023 December 31,

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Total $ 181.8 $ 204.2

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

Note 11 - Commitments and Contingencies

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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, 2023, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters.

We believe that as of September 30, 2023, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

On April 3, 2023, Crane NXT and SpinCo entered into a Tax Matters Agreement which, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits.

The agreement specifies the allocation of tax liabilities between us and SpinCo, and we and SpinCo agreed to indemnify each other for any amounts for which they are not responsible.

As of June 30, 2023, there were no amounts owing to SpinCo pursuant to this agreement.

As of September 30, 2023, there were no amounts owing to SpinCo pursuant to this agreement.

The Tax Matters Agreement also specifies allocation of tax liabilities in the event that the Distribution is determined not to be tax-free.

We believe that as of June 30, 2023, there was no reasonable possibility that such a tax liability will be incurred in connection with the Distribution.

We believe that as of September 30, 2023, there was no reasonable possibility that such a tax liability will be incurred in connection with the Distribution.

Note 12 - Financing

Our debt consisted of the following:

(in millions) June 30,

(in millions) September 30,

2023 December 31,

Term Facility (a)

4.45 % notes due December 2023 (a)

Total short-term borrowings $ 9.4 $ 299.7

Term Facility (a)

6.55 % notes due November 2036 (a)

4.20 % notes due March 2048 (a)

Term Facility $ 6.6 $ —

4.45 % notes due December 2023

Total short-term borrowings (a)

$ 6.6 $ 299.7

Term Facility $ 166.4 $ —

6.55 % notes due November 2036

4.20 % notes due March 2048

Other deferred financing costs associated with credit facilities ( 3.6 ) —

Total long-term debt $ 829.6 $ 545.1

(a) Debt discounts and debt issuance costs totaled $ 11.0 million and $ 5.6 million as of June 30, 2023, and December 31, 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

Total long-term debt (a)

$ 708.1 $ 545.1

(a) Debt discounts and debt issuance costs totaled $ 10.4 million and $ 5.6 million as of September 30, 2023, and December 31, 2022, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above, where applicable.

4.45 % notes due December 2023 - On March 3, 2023, Holdings notified bondholders of its intent to redeem all its outstanding $ 300 million aggregate principal amount of its 4.45 % senior notes due 2023 on April 4, 2023.

We completed the redemption on April 4, 2023.

Credit Faciliti es - We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for (i) a $ 500 million, 5 -year revolving credit facility (the “Revolving Facility”) and (ii) a $ 350 million, 3-year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.

Credit Faciliti es - We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for (i) a $ 500 million, five-year revolving credit facility (the “Revolving Facility”) and (ii) a $ 350 million, three-year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.

On March 31, 2023, we borrowed the full amount of the Term Facility.

On June 30, 2023, we repaid $ 50 million on the Term Facility.

During the three-and-nine months ended September 30, 2023, we repaid $ 125 million and $ 175 million, respectively, of the Term Facility.

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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We are required to pay a fee on undrawn commitments under the Revolving Facility at a rate per annum that ranges from 0.20 % to 0.35 %, based on the lower of the Ratings and our total net leverage ratio.

The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

type, including limitations on our and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates, investments, hedging arrangements and amendments to our organizational documents or to certain subordinated debt agreements.

The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on our and our subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates, investments, hedging arrangements and amendments to our organizational documents or to certain subordinated debt agreements.

As of the last day of each fiscal quarter, our total net leverage ratio cannot exceed 3.50 to 1.00 (provided that, at our election, such maximum ratio may be increased to 4.00 to 1.00 for specified periods following our consummation of certain material acquisitions) and our minimum interest coverage ratio must be at least 3.00 to 1.00.

The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by us or any of our material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting us and our material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

Note 13 - Fair Value Measurements

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Foreign exchange contracts not designated as hedging instruments had a notional value $ 85.7 million as of December 31, 2022.

We had no such hedging instruments as of June 30, 2023.

We had no such hedging instruments as of September 30, 2023.

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.

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Such derivative receivable amounts are recorded within “Other current assets” on our Unaudited Consolidated and Combined Condensed Balance Sheets and were $ 5.8 million as of December 31, 2022.

We had no such derivative receivables as of June 30, 2023.

We had no such derivative receivables as of September 30, 2023.

Available-for-sale securities consist of rabbi trust investments that hold marketable securities for the benefit of participants in our Supplemental Executive Retirement Plan.

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

During Q2 2023, the rabbi trust investments were distributed to the beneficiaries and the rabbi trust investment account was closed.

During the second quarter of 2023, the rabbi trust investments were distributed to the beneficiaries and the rabbi trust investment account was closed.

The fair value of available-for-sale securities was $ 0.4 million as of December 31, 2022 and is recorded within “Other assets” on our Unaudited Consolidated and Combined Condensed Balance Sheets.

We had no such fair value of available-for-sale securities as of June 30, 2023.

We had no such fair value of available-for-sale securities as of September 30, 2023.

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 notes due, measured using Level 2 inputs, was $ 445.0 million and $ 753.1 million as of June 30, 2023, and December 31, 2022, respectively.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

The estimated fair value of notes due, measured using Level 2 inputs, was $ 416.9 million and $ 753.1 million as of September 30, 2023, and December 31, 2022, respectively.

Note 14 - Restructuring

2022 Restructuring - In the fourth quarter of 2022, in response to economic uncertainty, we initiated modest workforce reductions in CPI of approximately 140 employees, or about 4 % of our global workforce.

We expect to substantially complete the program in the first quarter of 2024.

We did no t incur significant restructuring costs during the six months ended June 30, 2023, or June 30, 2022.

We have incurred $ 6.2 million of cumulative restructuring costs, net through June 30, 2023, of which $ 5.7 million related to severance and $ 0.5 million related to other costs.

We expect to substantially complete the program in the first quarter of 2024 in the U.S.

with foreign jurisdictions extending through the end of 2026.

NOTES TO THE UNAUDITED CONSOLIDATED AND COMBINED CONDENSED FINANCIAL STATEMENTS

We did no t incur significant restructuring costs during the nine months ended September 30, 2023, or September 30, 2022.

We have incurred $ 6.2 million of cumulative restructuring costs, net through September 30, 2023, of which $ 5.7 million related to severance and $ 0.5 million related to other costs.

We do no t expect to incur additional costs to complete these actions.

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Utilization ( 5.1 )

Balance as of June 30, 2023 (a)

Balance as of September 30, 2023 (a)

Included within “Accrued Liabilities” in the Unaudited Consolidated and Combined Condensed Balance Sheets.

1 unchanged sentence

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