What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-06 compared with 2023-08-07 · 74 added, 75 removed, 176 unchanged (46% of the section changed)

10 unchanged sentences

On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co.

and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings As part of the Separation, the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Holdings were spun off to SpinCo.

and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings.

As part of the Separation, the Aerospace & Electronics, Process Flow Technologies and Engineered Materials businesses of Holdings were spun off to SpinCo.

Also, as part of the Separation, Holdings retained the Payment and Merchandising Technologies business and was renamed “Crane NXT, Co.” on April 3, 2023.

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

References to “core business” or “core sales” in this report include sales from acquired businesses starting from and after the first anniversary of the acquisition but exclude currency effects.

References to "core sales," "core backlog" and "core growth" exclude currency effects and, where applicable, the first-year impacts of acquisitions and divestitures.

Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated.

6 unchanged sentences

business and economic disruptions associated with extraordinary public health issues such as large-scale health epidemics or pandemics;

information systems and technology networks failures and breaches in data security, personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information;

information systems and technology networks failures, breaches in data security, personally identifiable and other information, and non-compliance with our contractual or other legal obligations regarding such information;

our ability to source components and raw materials from suppliers, including disruptions and delays in our supply chain;

22 unchanged sentences

Immediately following the consummation of the Separation on April 3, 2023, Holdings was renamed “Crane NXT, Co.”

In connection with the Separation, SpinCo paid a one-time cash dividend in the amount of $275 million to Holdings.

on April 3, 2023, prior to the consummation of the Separation.

In connection with the Separation, SpinCo paid a one-time cash dividend in the amount of $275 million to Holdings on April 3, 2023, prior to the consummation of the Separation.

The proceeds of the dividend, along with cash on hand, was used to repay the $300 million of 4.45% senior notes due in December 2023.

1 unchanged sentence

Credit Facilities

We are party to a new 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.

We are party to a new 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, 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.

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

In June 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.

Related Party Agreements

2 unchanged sentences

These agreements include the Separation and Distribution Agreement, 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.

Transactions under the Transition Services Agreement were not material for the three-and-nine-months ended September 30, 2023.

Basis of Presentation

1 unchanged sentence

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

Results from Operations – Three Month Periods Ended June 30,

Results from Operations – Three Month Periods Ended September 30,

The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed financial statements and related notes.

All comparisons below refer to the second quarter 2023 versus the second quarter 2022, unless otherwise specified.

Three Months Ended June 30, Favorable/(Unfavorable) Change

All comparisons below refer to the third quarter 2023 versus the third quarter 2022, unless otherwise specified.

Three Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

7 unchanged sentences

Other income (expense):

Interest income 0.2 0.1 0.1 100.0 %

Interest income 0.3 — 0.3 NM

Interest expense (12.8) (10.4) (2.4) (23.1) %

7 unchanged sentences

The change in sales included:

• an increase in core sales of $21.4 million, or 6.4%, driven primarily by higher pricing;

• unfavorable foreign currency translation of $3.0 million, or 0.9%.

• an increase in core sales of $13.2 million, or 3.9%, driven primarily by higher volumes in our international Currency business;

• favorable foreign currency translation of $4.6 million, or 1.4%.

Cost of sales increased by $12.5 million, or 7.1%, to $187.4 million in 2023.

The increase is primarily related to the impact of unfavorable mix of $15.6 million, or 8.5%, predominantly offset by strong productivity gains of $14.0 million, or 7.7%.

The increase was driven primarily by unfavorable mix and unfavorable foreign currency translation, partially offset by lower manufacturing and shipping costs, and productivity gains.

Selling, general and administrative expenses increased by $3.6 million, or 4.4%, to $85.8 million in 2023.

The increase was driven primarily by increased administrative expenses related to higher compensation and benefit costs, and professional services to support the Separation, including $15.2 million, or 19.5%, of transaction related expenses.

Operating profit decreased by $4.6 million, or 6.3%, to $68.8 million in 2023.

The decrease primarily reflected higher administrative expenses of $22.6 million, or 30.8%, to support the Separation, including $15.2 million, or 20.7%, of transaction related expenses.

Operating segment performance was strong across the businesses with pricing actions net of inflation and strong productivity of $29.1 million, or 39.6%, and higher volumes of $4.2 million, or 5.7%, more than offsetting unfavorable mix of $15.6 million, or 21.3%.

Our effective tax rate for the three months ended June 30, 2023 is 22.7% which 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 rates for the three months ended June 30, 2023, is higher than the statutory U.S.

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

Higher compensation and benefit costs, and professional services to support the Separation , including $2.7 million, or 3.3%, of transaction related expenses, were partially offset by restructuring savings of $2.6 million, or 3.2%, in our Crane Payment Innovations segment.

Operating profit increased by $1.7 million, or 2.2%, to $79.7 million in 2023.

The increase was driven primarily by favorable pricing, lower manufacturing and shipping costs, and productivity gains in the Crane Payment Innovations segment, partially offset by higher corporate costs related to the Separation.

Favorable pricing, lower manufacturing and shipping costs, and productivity gains in our Currency segment were predominantly offset by unfavorable mix related to sales to the U.S.

Our effective tax rate for the three months ended September 30, 2023 is lower than the prior year’s comparable period primarily due to a foreign tax credit return to provision adjustment recorded in the prior year’s comparable period.

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

Segment Results of Operations - Three Month Periods Ended June 30,

Segment Results of Operations - Three Month Periods Ended September 30,

Crane Payment Innovations

Three Months Ended June 30, Favorable/(Unfavorable) Change

Three Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

9 unchanged sentences

Operating margin 26.9 % 25.0 %

Sales increased by $14.5 million, or 6.9%, to $225.9 million in 2023, driven by higher core sales of $17.0 million, or 8.0%, partially offset by unfavorable foreign currency translation of $2.5 million, or 1.1%.

Sales increased by $0.8 million, or 0.4%, to $221.6 million in 2023, driven by favorable foreign currency translation of $1.1 million, or 0.5%.

Core sales declined slightly as favorable pricing was more than offset by lower volumes primarily driven by customers adjusting inventory levels to reflect reduced lead times.

• Sales of Payment Acceptance and Dispensing Products increased by $0.1 million, or 0.1%, to $189.1 million in 2023.

The increase reflected higher core sales of $14.3 million, or 7.9%, partially offset by unfavorable foreign currency translation of $2.5 million, or 1.4%, primarily due to the Japanese yen and Australian dollar weakening against the U.S.

The core sales increase primarily reflected higher component sales and higher pricing year over year.

• Service revenue increased by $2.7 million, or 9.0%, to $32.8 million in 2023, primarily driven by a higher pricing and to a lesser extent, volume of service contract sales.

Cost of sales increased by $2.7 million, or 2.5%, to $111.8 million, primarily reflecting unfavorable mix of $3.8 million, or 3.5%, and increased material, labor, and other manufacturing costs of $2.7 million, or 2.5%, partially offset by productivity gains of $3.0 million, or 2.7%.

Selling, general and administrative expense decreased by $1.7 million, or 3.3%, to $49.3 million, primarily due to restructuring savings of $2.5 million, or 4.9%.

The increase reflected favorable foreign currency translation of $1.1 million, or 0.6%, primarily due to the strengthening of the British pound against the U.S.

dollar, partially offset by the weakening of the Japanese yen against the U.S.

dollar, and lower core sales of $1.0 million, or 0.5%.

• Service revenue increased by $0.7 million, or 2.2%, to $32.5 million in 2023, primarily driven by favorable pricing.

Cost of sales decreased by $3.0 million, or 2.6%, to $111.1 million, primarily due to productivity gains, lower volumes and lower manufacturing and shipping costs, partially offset by unfavorable mix.

Selling, general and administrative expense decreased by $0.6 million, or 1.2%, to $50.8 million, primarily due to restructuring savings of $2.6 million, or 5.1%, partially offset by an increase in selling expenses primarily due to higher compensation and benefit costs, and unfavorable foreign currency translation.

Operating profit increased by $4.4 million, or 8.0%, to $59.7 million in 2023.

The increase is primarily due to higher pricing net of inflation, and productivity gains, of $13.1 million, or 25.5%, restructuring savings of $2.7 million, or 5.3%, and higher volumes of $2.2 million, or 4.3%, partially offset by unfavorable mix of $3.8 million, or 7.4%.

The increase is primarily due to favorable pricing, lower manufacturing and shipping costs, and productivity gains, of $10.5 million, or 19.0%, and restructuring savings of $2.8 million, or 5.1%, partially offset by unfavorable mix of $5.6 million, or 10.1%, and lower volumes of $3.1 million, or 5.6%.

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

Crane Currency

Three Months Ended June 30, Favorable/(Unfavorable) Change

Three Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

6 unchanged sentences

Operating margin 25.0 % 28.3 %

Banknote and security product sales increased by $3.9 million, or 3.2%, to $126.5 million in 2023, reflecting higher core sales of $4.5 million, or 3.7%, predominantly driven by higher volumes in international markets, partially offset by unfavorable foreign currency translation of $0.6 million, or 0.5%.

Cost of sales decreased $1.5 million, or 2.0%, to $72.2 million in 2023, primarily due to strong productivity gains of $13.7 million, or 18.6%, partially offset by unfavorable mix of $11.8 million, or 16.0%.

Selling, general and administrative expense increased by $0.1 million, or 0.5%, to $19.6 million in 2023 mainly due to higher selling expenses partially offset by favorable foreign currency translation.

Operating profit increased by $5.3 million, or 18.0%, to $34.7 million in 2023, primarily due to productivity gains of $15.2 million, or 51.7%, and higher volumes of $1.9 million, or 6.5%, partially offset by unfavorable mix of $11.8 million, or 40.1%.

Banknote and security product sales increased by $17.0 million, or 14.9%, to $131.3 million in 2023, reflecting higher core sales of $13.5 million, or 11.8%, predominantly driven by higher volumes in international markets, and favorable foreign currency translation of $3.5 million, or 3.1%, as the euro strengthened against the U.S.

Cost of sales increased by $15.5 million, or 25.5%, to $76.3 million in 2023, primarily due to unfavorable mix, higher volumes and unfavorable foreign currency translation, partially offset by lower manufacturing and shipping costs, and productivity gains.

Selling, general and administrative expense increased by $1.1 million, or 5.2%, to $22.2 million in 2023, predominantly in administrative expenses, partially offset by engineering expenses.

Operating profit increased by $0.4 million, or 1.2%, to $32.8 million in 2023, reflecting favorable pricing, lower manufacturing and shipping costs, and productivity gains of $11.3 million, or 34.9%, higher volumes of $6.5 million, or 20.1%, and favorable foreign currency translation of $1.0 million, or 3.1%.

These increases were partially offset by unfavorable mix of $18.3 million, or 56.5%, as anticipated, related to higher U.S.

demand for lower denomination banknotes which is expected to continue into next quarter.

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

Results from Operations – Six Month Periods Ended June 30,

Results from Operations – Nine Month Periods Ended September 30,

The following information should be read in conjunction with our Unaudited Consolidated and Combined Condensed Financial Statements and related notes.

All comparisons below refer to the first six months of 2023 versus the first six months of 2022, unless otherwise specified.

Six Months Ended June 30, Favorable/(Unfavorable) Change

All comparisons below refer to the first nine months of 2023 versus the first nine months of 2022, unless otherwise specified.

Nine Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

18 unchanged sentences

The change in sales included:

• an increase in core sales of $30.3 million, or 4.5%, driven primarily by higher pricing, and

• an increase in core sales of $43.5 million, or 4.3%, driven primarily by favorable pricing across both segments, and

• unfavorable foreign currency translation of $10.8 million, or 1.1%.

Cost of sales decreased by $3.5 million, or 1.0%, to $358.4 million in 2023.

Unfavorable mix of $29.8 million, or 8.2%, was more than offset by productivity gains net of inflation of $16.7 million, or 4.6%, favorable foreign currency translation of $9.1 million, or 2.5%, and lower volumes of $7.5 million, or 2.1%.

Cost of sales increased by $9.0 million, or 1.7%, to $545.8 million in 2023.

The increase was driven primarily by unfavorable mix of $53.7 million, or 10.0%, partially offset by productivity gains net of inflation, lower volumes and favorable foreign currency translation.

Selling, general and administrative expenses increased by $37.6 million, or 15.9%, to $274.2 million in 2023.

The increase was driven primarily by increased administrative costs o f $34.5 million, or 22.4%, related to higher compensation and benefit costs, and professional services to support the Separation, including transaction related expenses of $17.0 million, or 11.0%.

The increase was driven primarily by increased administrative expenses related to higher compensation and benefit costs, and professional services to support the Separation, including transaction related expenses of $19.7 million, or 8.3%, partially offset by restructuring savings of $6.8 million, or 2.9%.

Operating profit decreased by $13.9 million, or 6.1%, to $214.4 million in 2023.

The decrease primarily reflected an unfavorable mix of $29.8 million, or 19.8%, lower volumes of $7.8 million, or 5.2%, partially offset by higher pricing net of inflation, and productivity gains, of $26.1 million, or 17.4%.

Operating profit in 2023 included transaction related expenses of $17.0 million, or 11.3%.

Our effective tax rate for the six months ended June 30, 2023, is 21.4%.

This rate is consistent with the prior year’s comparable period.

Our effective tax rates for the six months ended June 30, 2023, is higher than the statutory U.S.

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

The decrease was primarily driven by increased corporate costs related to the Separation and unfavorable mix in the Currency segment, partially offset by favorable pricing and productivity gains in the Crane Payment Innovations segment.

Our effective tax rate for the nine months ended September 30, 2023 is lower than the prior year’s comparable period primarily due to a foreign tax credit return to provision adjustment recorded in the prior year’s comparable period.

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

Segment Results of Operations - Six Month Periods Ended June 30,

Segment Results of Operations - Nine Month Periods Ended September 30,

Crane Payment Innovations

Six Months Ended June 30, Favorable/(Unfavorable) Change

Nine Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

11 unchanged sentences

• Sales of Payment Acceptance and Dispensing Products increased $22.9 million, or 4.1%, to $574.9 million in 2023.

The increase reflected higher core sales of $34.1 million, or 9.4%, primarily due to higher pricing, partially offset by unfavorable foreign currency translation of $11.3 million, or 3.1%, primarily reflecting the weakening of the British pound, Japanese Yen and Australian dollar against the U.S.

• Service revenue increased by $4.5 million, or 7.6%, to $63.9 million in 2023, primarily driven by a higher volume of service contract sales and higher pricing year over year.

Cost of sales increased by $0.5 million, or 0.2%, to $219.2 million, primarily related to increase in material, labor and other manufacturing costs of $10.3 million, or 4.7%, and unfavorable mix of $6.9 million, or 3.2%, partially offset by favorable foreign currency translation of $6.5 million, or 3.0%, productivity gains of $6.3 million, or 2.9%, and lower volumes of $3.6 million, or 1.6%.

Selling, general and administrative expense increased by $0.5 million, or 0.5%, to $103.9 million in 2023, primarily reflecting an increase of $6.8 million, or 6.6%, in administrative and sales expenses, partially offset by restructuring savings of $4.2 million, or 4.1%, and favorable foreign currency translation of $1.7 million, or 1.6%.

The increase reflected higher core sales of $33.1 million, or 6.0%, primarily due to favorable pricing, partially offset by unfavorable foreign currency translation of $10.2 million, or 1.8%, primarily reflecting the weakening of the Japanese Yen, British pound and Australian dollar against the U.S.

• Service revenue increased by $5.2 million, or 5.7%, to $96.4 million in 2023, primarily driven by favorable pricing.

Cost of sales decreased by $2.5 million, or 0.8%, to $330.3 million, as favorable foreign currency translation, lower volumes and productivity gains were partially offset by increased manufacturing costs and unfavorable mix.

Selling, general and administrative expense decreased by $0.1 million, or 0.1%, to $154.7 million in 2023, primarily reflecting restructuring savings of $6.8 million, or 4.4%, and favorable foreign currency translation of $1.1 million, or 0.7%, offset by increased administrative and selling costs primarily including higher compensation and benefit costs.

Operating profit increased by $30.7 million, or 19.7%, to $186.3 million in 2023.

The increase primarily reflected higher pricing net of inflation, and productivity, of $31.0 million, or 30.9%, and restructuring savings of $4.4 million, or 4.4%, partially offset by unfavorable mix of $6.9 million, or 6.9%, and unfavorable foreign currency translation of $3.1 million, or 3.1%.

The increase primarily reflected favorable pricing net of inflation, and productivity gains of $41.6 million, or 26.7%, and restructuring savings of $7.2 million, or 4.6%, partially offset by unfavorable mix of $12.4 million, or 8.0%, unfavorable foreign currency translation of $3.3 million, or 2.1%, and lower volumes of $2.0 million, or 1.3%.

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

Crane Currency

Six Months Ended June 30, Favorable/(Unfavorable) Change

Nine Months Ended September 30, Favorable/(Unfavorable) Change

(dollars in millions) 2023 2022 $ %

6 unchanged sentences

Operating margin 23.4 % 27.1 %

Banknote and security product sales decreased by $12.4 million, or 5.1%, to $231.8 million in 2023.

The decrease primarily related to lower core sales of $8.4 million, or 3.4%, driven by lower volumes and unfavorable foreign currency translation of $4.1 million, or 1.7%, as the euro and Swedish krona weakened against the U.S.

Cost of sales decreased by $4.0 million, or 2.8%, to $139.2 million in 2023.

The impact of productivity gains of $20.5 million, or 14.3%, lower volumes of $3.9 million, or 2.7%, and favorable foreign currency translation of $2.6 million, or 1.8%, were partially offset by unfavorable mix of $23.0 million, or 16.1%.

Selling, general and administrative expense increased by $3.9 million, or 10.7%, to $40.3 million in 2023, predominantly in selling and engineering expenses.

Operating profit decreased by $12.3 million, or 19.0%, to $52.3 million in 2023.

The decrease primarily reflected unfavorable mix of $23.0 million, or 35.6%, and lower volumes of $9.0 million, or 13.9%, both driven by anticipated lower sales to the U.S.

Government, partially offset by pricing net of inflation, and productivity gains, of $20.2 million, or 31.3%.

Banknote and security product sales increased by $4.6 million, or 1.3%, to $363.1 million in 2023, reflecting higher core sales of $5.2 million, or 1.5%, predominantly driven by higher volumes in international markets, partially offset by unfavorable foreign currency translation of $0.6 million, or 0.2%.

Cost of sales increased by $11.5 million, or 5.6%, to $215.5 million in 2023, primarily due to unfavorable mix, partially offset by productivity gains net of inflation, and favorable fixed cost leverage resulting from increased backlog.

Unfavorable mix related to higher U.S.

demand for lower denomination banknotes is expected to continue through the remainder of 2023.

Selling, general and administrative expense increased by $5.0 million, or 8.7%, to $62.5 million in 2023, primarily in administrative and selling costs including higher compensation and benefit costs.

Operating profit decreased by $11.9 million, or 12.3%, to $85.1 million in 2023, reflecting unfavorable mix of $41.2 million, or 42.5%, and lower volumes of $2.5 million, or 2.6%, both driven by lower sales to the U.S.

government, as anticipated, partially offset by favorable pricing net of inflation, and productivity gains, of $31.5 million, or 32.5%.

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

Liquidity and Capital Resources

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2023 2022

4 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

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares.

1 unchanged sentence

Our current cash balance, together with cash we expect to generate from future operations along with our borrowings available under our revolving credit facility, is expected to be sufficient to finance our short- and long-term capital requirements.

In March 2023, we entered into a new senior secured credit agreement, which provides for a $500 million, 5-year revolving credit facility and a $350 million, 3-year term loan facility.

In the three months ended September 30, 2023, we drew down and subsequently repaid $20 million on our revolving credit facility.

In March 2023, we entered into a new senior secured credit agreement, which provides for a $500 million, five-year revolving credit facility and a $350 million, three-year term loan facility.

Funding under each facility 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.

In June 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.

On April 3, 2023, prior to the consummation of the Separation, SpinCo paid a dividend to Holdings in the amount of $275 million.

1 unchanged sentence

Operating Activities

Cash provided by operating activities was $95.0 million in the first six months of 2023, as compared to $121.1 million during the same period last year.

The decrease in cash provided by operating activities was primarily driven by lower net income related to increased transactions costs to support the Separation.

Cash provided by operating activities was $197.8 million in the first nine months of 2023, as compared to $230.9 million during the same period last year.

The decrease in cash provided by operating activities was primarily driven by higher cash used for operating working capital supporting higher levels of demand.

Investing Activities

Cash flows provided by investing activities consist primarily of cash used for capital expenditures.

Cash used for investing activities was $8.5 million in the first six months of 2023, as compared to $7.6 million in the comparable period of 2022.

Cash provided by investing activities consists of cash used for capital expenditures.

Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems.

Cash used for investing activities was $16.1 million in the first nine months of 2023, as compared to $12.2 million in the comparable period of 2022.

Financing Activities

Cash used for financing activities consist primarily of repayments of indebtedness, proceeds from the issuance of long-term debt and debt issuance cost on new credit facilities .

Cash used for financing activities was $43.7 million during the first six months of 2023 compared to $72.9 million in the comparable period of 2022.

The decreased in cash used for financing activities was primarily driven by lower net transfers to Crane.

Cash used for financing activities consists primarily of repayments of indebtedness, proceeds from the issuance of long-term debt and debt issuance cost on new credit facilities .

Cash used for financing activities was $176.5 million during the first nine months of 2023 compared to $88.6 million in the comparable period of 2022.

The increase in cash used for financing activities was primarily driven by repayments of debt.

Recent Accounting Pronouncements

3 unchanged sentences

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 2. Management’s Discussion and Analysis