What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-03-01 · 552 added, 798 removed, 799 unchanged (63% of the section changed)

1 unchanged sentence

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Crane Holdings, Co.

The accompanying consolidated and combined financial statements of Crane NXT, Co.

and subsidiaries have been prepared by management in conformity with accounting principles generally accepted in the United States of America and, in the judgment of management, present fairly and consistently the Company’s financial position and results of operations and cash flows.

7 unchanged sentences

Based on our assessment we believe that, as of December 31, 2023, the Company’s internal control over financial reporting is effective based on those criteria.

Deloitte & Touche LLP, the independent registered public accounting firm that also audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K, audited the internal control over financial reporting as of December 31, 2022, and issued their related attestation report which is included herein.

Deloitte & Touche LLP, the independent registered public accounting firm that also audited the Company’s consolidated and combined financial statements included in this Annual Report on Form 10-K, audited the internal control over financial reporting as of December 31, 2023, and issued their related attestation report which is included herein.

/s/ Aaron Saak

President and Chief Executive Officer

(Principal Executive Officer)

/s/ Richard A.

Executive Vice President and Chief Financial Officer

/s/ Christina Cristiano

Christina Cristiano

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

The Section 302 certifications of the Company’s Chief Executive Officer and its Principal Financial Officer have been filed as Exhibit 31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The Section 302 certifications of the Company’s Chief Executive Officer and its Chief Financial Officer have been filed as Exhibit 31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Crane Holdings, Co.

To the Shareholders and the Board of Directors of Crane NXT, Co.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Crane Holdings, Co.

and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, 2022 and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated and combined balance sheets of Crane NXT, Co.

and subsidiaries (the "Company") as of December 31, 2023, and 2022, the related consolidated and combined statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As described in Note 1 and Note 2 to the financial statements, the financial statements have been prepared on a stand-alone basis and prior to April 3, 2023 are derived from the consolidated financial statements and accounting records of Crane Holdings, Co.

(“Holdings”).

Prior to April 3, 2023, the financial statements include expense allocations for certain corporate functions and services historically provided by Holdings.

These allocated costs could differ from the actual expense that would have been incurred had the Company operated as an independent, publicly traded company for the periods presented.

Critical Audit Matter

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue – Over-Time Basis — Refer to Note 1 to the financial statements

Audit Matter Description

Revenue Recognition – Over Time Basis — Refer to Note 1 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue as they fulfill their performance obligations and transfer control of products to their customers.

The Company has certain revenue contracts with the U.S.

government or indirectly to the U.S.

government through subcontracts.

The clauses of those contracts stipulate that any amounts included in work-in-progress are the property of the U.S.

government as they own any work-in progress as the contracted product is being built.

The Company uses the cost-to-cost method of determining their progress, measuring progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation.

In 2022, the Company recognized approximately $120 million in revenue over time related to contracts in progress as of December 31, 2022.

We identified revenue recognized over time as a critical audit matter because of the judgments necessary for management to determine the margin to be used to estimate revenue for the overtime revenue.

This required a high degree of auditor judgment when performing audit procedures to audit management’s estimates of margin at completion used to recognize revenue over time and evaluating the results of those procedures.

The Company uses the cost-to-cost method of determining their progress, measuring

progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation.

In 2023, the Company recognized approximately $211 million in revenue over time related to products.

We identified revenue recognized over time as a critical audit matter because of the judgments necessary for management to determine the estimated margin used to recognize over time revenue.

This required a high degree of auditor judgment when performing audit procedures to audit management’s estimated margin at completion and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

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• We tested the effectiveness of controls related to the revenue recognized over time, including management’s controls over costs incurred to date and estimates of margin at completion, as well as the accurate classification of contracts in the system during the order entry process.

• We selected a sample of contracts with customers that were recognized over time and we performed the following:

◦ Evaluated whether the contracts were properly included in management’s calculation of long-term contract revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

• We selected a sample of revenue transactions that were recognized over time and performed the following:

• Evaluated whether the contracts were properly included in management’s calculation of over time revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfilling the performance obligation.

• Evaluated the appropriateness and consistency of the methods of calculation and assumptions used by management to develop the margin at completion applied to determine the revenue recognized.

• We tested the mathematical accuracy of management’s calculation of revenue recognized.

• We observed the Company’s physical inventory counts to test the existence of inventory related to contracts with the U.S.

• We tested the mathematical accuracy and completeness of management’s calculation of revenue recognized.

• We observed the Company’s physical inventory counts to test the existence of inventory related to the U.S.

• We evaluated management’s ability to estimate future costs and margins at completion accurately by comparing actual costs and margins at completion for similar contracts that were previously completed to management’s historical estimates for such contracts.

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Stamford, Connecticut

March 1, 2023

February 22, 2024

We have served as the Company's auditor since 2022.

CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31,

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

For the Years Ended December 31,

(in millions, except per share data) 2023 2022 2021

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Selling, general and administrative 366.8 318.7 323.4

Loss on divestiture of asbestos-related assets and liabilities 162.4 — —

Restructuring charges (gains), net 0.5 6.2 ( 3.7 )

Acquisition-related and integration charges — — 12.9

Operating profit 286.8 301.3 279.2

2 unchanged sentences

Interest expense ( 48.1 ) ( 41.9 ) ( 41.8 )

Gain on sale of business 232.5 — —

Related party interest expense ( 2.5 ) ( 14.4 ) ( 16.1 )

Miscellaneous income, net 2.5 3.1 4.7

Total other income (expense) 193.5 ( 26.4 ) ( 38.4 )

Total other expense, net ( 47.0 ) ( 53.0 ) ( 53.1 )

Income before income taxes 239.8 248.3 226.1

Provision for income taxes 51.5 43.4 48.1

Net income before allocation to noncontrolling interests 401.1 435.4 181.1

Noncontrolling interest in subsidiaries’ earnings — — 0.1

Net income attributable to common shareholders $ 188.3 $ 204.9 $ 178.0

5 unchanged sentences

Diluted 57.5 56.7 56.7

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the year ended December 31,

See Notes to Consolidated and Combined Financial Statements.

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31,

(in millions) 2023 2022 2021

Net income before allocation to noncontrolling interests $ 401.1 $ 435.4 $ 181.1

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

Net income $ 188.3 $ 204.9 $ 178.0

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

Currency translation adjustment 18.1 ( 69.2 ) ( 46.1 )

Changes in pension and postretirement plan assets and benefit obligation, net of tax ( 5.2 ) 10.0 7.3

Other comprehensive (loss) income, net of tax ( 63.3 ) 26.8 16.8

Comprehensive income before allocation to noncontrolling interests 337.8 462.2 197.9

Noncontrolling interests in comprehensive (loss) income ( 0.2 ) 0.6 ( 0.5 )

Other comprehensive income (loss), net of tax 12.9 ( 59.2 ) ( 38.8 )

Comprehensive income attributable to common shareholders $ 201.2 $ 145.7 $ 139.2

See Notes to Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS

See Notes to Consolidated and Combined Financial Statements.

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED BALANCE SHEETS

Balance as of December 31,

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Cash and cash equivalents $ 227.2 $ 230.7

Current insurance receivable - asbestos — 13.7

Accounts receivable, net 214.9 205.1

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Property, plant and equipment, net 261.2 261.6

Insurance receivable - asbestos — 60.0

Long-term deferred tax assets 2.7 6.3

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Accounts payable 106.5 109.6

Current asbestos liability — 62.3

Accrued liabilities 210.5 204.2

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Long-term deferred tax liability 104.5 109.5

Long-term asbestos liability — 549.8

Other liabilities 63.7 38.5

Total liabilities 1,165.4 1,345.6

Commitments and contingencies (Note 12)

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72,441,647 shares issued;

56,325,382 and 57,835,865 shares outstanding in 2022 and 2021, respectively

56,897,457 shares outstanding as of December 31, 2023

Capital surplus 1,728.1 —

Retained earnings 120.9 —

Crane net investment — 915.3

Accumulated other comprehensive loss ( 118.6 ) ( 131.5 )

Treasury stock;

16,101,007 and 14,590,274 treasury shares in 2022 and 2021, respectively

( 864.3 ) ( 691.1 )

Total shareholders’ equity 1,901.4 1,832.3

Noncontrolling interest 2.6 2.8

15,544,190 treasury shares as of December 31, 2023

Total equity 964.0 783.8

Total liabilities and equity $ 2,129.4 $ 2,129.4

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended December 31,

See Notes to Consolidated and Combined Financial Statements.

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

(in millions) 2023 2022 2021

Operating activities:

Net income before allocations to noncontrolling interests $ 401.1 $ 435.4 $ 181.1

Non-cash loss on divestiture of asbestos-related assets and liabilities 148.9 — —

Gain on sale of business ( 232.5 ) — —

Gain on sale of property ( 2.8 ) ( 18.5 ) —

Net income attributable to common shareholders $ 188.3 $ 204.9 $ 178.0

Adjustments to reconcile net income to net cash flows provided by operating activities:

Non-cash restructuring gains — — ( 3.7 )

Depreciation and amortization 77.6 78.7 81.8

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Deferred income taxes 7.6 ( 28.4 ) 8.2

Cash (used for) provided by operating working capital ( 2.2 ) 38.0 39.1

Defined benefit plans and postretirement contributions ( 21.8 ) ( 29.4 ) ( 28.4 )

Environmental payments, net of reimbursements ( 5.8 ) ( 5.8 ) ( 4.2 )

Asbestos related payments, net of insurance recoveries ( 29.3 ) ( 44.9 ) ( 31.1 )

Divestiture of asbestos-related assets and liabilities ( 550.0 ) — —

Cash provided by operating working capital — 39.3 6.1

Other ( 6.4 ) 2.5 ( 0.8 )

Total (used for) provided by operating activities $ ( 151.6 ) $ 498.5 $ 309.5

Total provided by operating activities $ 276.3 $ 306.0 $ 277.0

Investing activities:

Proceeds from disposition of capital assets $ 4.3 $ 23.6 $ 4.5

Proceeds from disposition of property $ — $ — $ 2.8

Capital expenditures ( 31.1 ) ( 21.3 ) ( 18.6 )

Proceeds from sale of business 318.1 — —

Purchase of marketable securities — ( 10.0 ) ( 90.0 )

Proceeds from sale of marketable securities — 40.0 60.0

Payment for acquisition - net of cash acquired — — ( 169.5 )

Total provided by (used for) investing activities $ 264.0 $ ( 0.3 ) $ ( 229.1 )

Total used for investing activities $ ( 31.1 ) $ ( 21.3 ) $ ( 15.8 )

Financing activities:

Dividends paid $ ( 23.7 ) $ — $ —

Reacquisition of shares on open market ( 203.7 ) ( 96.3 ) ( 70.0 )

Stock options exercised, net of shares reacquired 4.4 — —

Debt issuance costs ( 5.7 ) — —

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

Repayments of commercial paper with maturities greater than 90 days — ( 27.1 ) ( 296.7 )

Net repayments from issuance of commercial paper with maturities of 90 days or less — — ( 76.8 )

Repayment of long-term debt ( 300.0 ) — —

Proceeds from revolving credit facility 20.0 — —

Repayments of revolving credit facility — — ( 77.2 )

Repayment of revolving credit facility ( 20.0 ) — —

Proceeds from term loan 350.0 — —

Repayment of term loan ( 245.0 ) — —

Total provided by (used for) financing activities $ 106.0 $ ( 557.9 ) $ 55.1

For the year ended December 31,

(in millions) 2022 2021 2020

Net transfers to Crane ( 32.5 ) ( 135.0 ) ( 298.1 )

Total used for financing activities $ ( 252.5 ) $ ( 135.0 ) $ ( 298.1 )

Effect of exchange rates on cash and cash equivalents 3.8 ( 20.2 ) ( 7.0 )

Increase (decrease) in cash and cash equivalents 179.0 ( 72.4 ) 157.1

(Decrease) increase in cash and cash equivalents ( 3.5 ) 129.5 ( 43.9 )

Cash and cash equivalents at beginning of period 230.7 101.2 145.1

Cash and cash equivalents at end of period $ 227.2 $ 230.7 $ 101.2

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

Detail of cash provided by operating working capital

Accounts receivable $ ( 6.3 ) $ 0.3 $ ( 22.2 )

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Income taxes paid $ 46.0 $ 63.5 $ 25.3

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Unpaid capital expenditures $ 7.1 $ 3.1 $ 3.8

See Notes to Consolidated and Combined Financial Statements.

CRANE NXT, CO.

AND SUBSIDIARIES

CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY

(in millions, except share data) Common

4 unchanged sentences

Loss Treasury

Shareholders’

Equity Noncontrolling

Interest Total

Stock Crane Net Investment Total

BALANCE DECEMBER 31, 2020

Net income — — 181.0 — — 181.0 0.1 181.1

Cash dividends ($ 1.72 per share)

$ — $ — $ — $ ( 33.5 ) $ — $ 947.6 $ 914.1

Reacquisition on open market of 1,221,233 shares

— — — — ( 70.0 ) ( 70.0 ) — ( 70.0 )

Exercise of stock options, net of shares reacquired of 183,320

— — — — 8.9 8.9 — 8.9

Net income — — — — — 178.0 178.0

Net transfers to Crane — — — — — ( 298.1 ) ( 298.1 )

Stock-based compensation — — — — — 8.6 8.6

Impact from settlement of share-based awards, net of shares acquired — ( 7.2 ) — — 3.3 ( 3.9 ) — ( 3.9 )

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 7.3 — — 7.3

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BALANCE DECEMBER 31, 2021

Net income — — 435.4 — — 435.4 — 435.4

Cash dividends ($ 1.72 per share)

$ — $ — $ — $ ( 72.3 ) $ — $ 836.1 $ 763.8

Reacquisition on open market of 943,048 shares

— — — — ( 96.3 ) ( 96.3 ) — ( 96.3 )

Exercise of stock options, net of shares reacquired of 553,655

— — — — 16.5 16.5 — 16.5

Net income — — — — — 204.9 204.9

Net transfers to Crane — — — — — ( 135.0 ) ( 135.0 )

Stock-based compensation — — — — — 9.3 9.3

Impact from settlement of share-based awards, net of shares acquired — 8.3 — — ( 10.7 ) ( 2.4 ) — ( 2.4 )

Changes in pension and postretirement plan assets and benefit obligation, net of tax — — — 10.0 — — 10.0

1 unchanged sentence

BALANCE DECEMBER 31, 2022

$ — $ — $ — $ ( 131.5 ) $ — $ 915.3 $ 783.8

Net income — — 144.6 — — 43.7 188.3

1 unchanged sentence

— — ( 23.7 ) — — — ( 23.7 )

Reacquisition on open market of 1,959,069 shares

— — — — ( 203.7 ) ( 203.7 ) — ( 203.7 )

Dividend from Crane — — — — — 275.0 275.0

Net transfers to Crane — — — — — ( 285.2 ) ( 285.2 )

Reclassification of Crane Net Investment to Common Stock, Treasury Stock and Capital Surplus 72.4 1,726.8 — — ( 848.1 ) ( 951.1 ) —

Exercise of stock options, net of shares reacquired of 158,132 shares

1 unchanged sentence

Stock-based compensation — 6.5 — — — 2.3 8.8

Stock-based compensation reclassification a

— ( 0.3 ) — — — — ( 0.3 )

Impact from settlement of share-based awards, net of shares acquired — ( 4.9 ) — — 4.3 — ( 0.6 )

2 unchanged sentences

BALANCE DECEMBER 31, 2023

See Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

$ 72.4 $ 1,728.1 $ 120.9 $ ( 118.6 ) $ ( 838.8 ) $ — $ 964.0

(a) Reclassification of stock-based compensation due to modification resulting from equity award conversions.

See Note 7, “Stock-Based Compensation Plans” for additional information.

See Notes to Consolidated and Combined Financial Statements.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 1 – Nature of Operations and Significant Accounting Policies

Nature of Operations

We are a diversified manufacturer of highly engineered industrial products currently comprised of four reporting segments:

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

Our primary end markets include commercial and military aerospace, defense and space, chemical production, pharmaceutical production, water and wastewater, non-residential and municipal construction, energy, banknote design and production, payment automation solutions, along with a wide range of general industrial and certain consumer related end markets.

See Note 3, “Segment Information” for the relative size of these segments in relation to the total company (both net sales and total assets).

Holding Company Reorganization

On May 16, 2022, Crane Co., a Delaware corporation (“Crane Co.”), completed its previously announced reorganization merger pursuant to the Agreement and Plan of Merger, dated as of February 28, 2022 (the “Reorganization Agreement”), by and among Crane Co., Crane Holdings, Co., a Delaware corporation (“Crane Holdings”), and Crane Transaction Company, LLC, a Delaware limited liability company and, as of immediately prior to the consummation of such merger, a wholly-owned subsidiary of Crane Holdings (“Merger Sub”).

The Reorganization Agreement provided for the merger of Crane Co.

and Merger Sub, with Crane Co.

surviving the merger as a wholly-owned subsidiary of Crane Holdings (the “Reorganization Merger”).

Following the Reorganization Merger, on May 16, 2022, Crane Co.

converted from a Delaware corporation into a Delaware limited liability company named “Crane LLC” (such conversion, together with the Reorganization Merger, the “Reorganization”).

Following the Reorganization, substantially all of the assets of Crane LLC were distributed, assigned, transferred, conveyed and delivered to, and certain non-asbestos related liabilities of Crane LLC were assumed by, Crane Holdings.

On May 17, 2022, Crane LLC converted from a Delaware limited liability company to a Delaware corporation named “Crane Co.” Subsequently, on May 26, 2022, Crane Co.

filed a Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware, which became effective upon filing, pursuant to which the Crane Co.

officially changed its name from “Crane Co.” to “Redco Corporation”.

The “Crane Co.” name has been reserved for future use by Crane Holdings.

Divestiture of asbestos-related assets and liabilities

On August 12, 2022, Crane Holdings, Co., Crane Company, a wholly-owned subsidiary of Crane Holdings, Co., and Redco Corporation (“Redco”), then a wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related insurance assets, entered into a Stock Purchase Agreement (the “Redco Purchase Agreement”) with Spruce Lake Liability Management Holdco LLC (“Redco Buyer”), an unrelated third party and long-term liability management company specializing in the acquisition and management of legacy corporate liabilities whereby Crane Company transferred to Redco Buyer all of the issued and outstanding shares of Redco (the “Redco Sale”).

In connection with the Redco Sale, Crane Holdings, Co., on behalf of Crane Company, contributed approximately $ 550 million in cash to Redco, which was funded by a combination of short-term borrowings and cash on hand.

As a result of the Redco Sale, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets have been removed from Crane Holdings, Co.’s consolidated balance sheets effective August 12, 2022.

A loss on the divestiture of asbestos-related assets and liabilities of $ 162.4 million was recognized in the consolidated statements of operations for the year ended December 31, 2022.

Sale of Crane Supply

On April 8, 2022, the Company entered into an agreement to sell the Crane Supply business for CAD 380 million on a cash-free and debt-free basis.

Subsequent to net working capital and other closing adjustments, the sale closed on May 31, 2022 for CAD 402 million.

In August 2022, the Company received CAD 5 million related to a final working capital adjustment.

The Company recognized a total gain on sale of $ 232.5 million.

Pending Separation

On March 30, 2022, the Company announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies (the “Separation”).

The Separation is expected to occur through a tax-free distribution and is expected to be completed in April, 2023, subject to the satisfaction of customary conditions and final approval by Crane Holdings, Co.’s Board of Directors.

Termination of Agreement to Sell Engineered Materials

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

(“Verzatec”) for $ 360 million on a cash-free and debt-free basis.

In the second quarter of 2021, the assets and liabilities of the segment were classified as held for sale.

On May 26, 2022, Verzatec terminated the sale agreement and paid $ 7.5 million to the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company in termination fees, which is presented within Miscellaneous income on the Consolidated Statements of Operations.

As such, as of June 30, 2022 the Engineered Materials segment is no longer classified as assets held for sale and is presented herein as continuing operations for all periods presented.

Crane NXT, Co.

is a leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets.

We are comprised of two reporting segments:

Crane Payment Innovations (“CPI”) and Crane Currency.

Our primary end markets include central banks and a wide range of consumer related end markets including retail and gaming.

See Note 3, “Segment Results” for the relative size of these segments in relation to the total company (both net sales and total assets).

References herein to “Crane NXT,” “we,” “us” and “our” refer to Crane NXT, Co.

and its subsidiaries, including when Crane NXT, Co.

was named “Crane Holdings, Co.” unless the context implies otherwise.

References to the “Business” refer to our business, including prior to the Separation (as defined below) when it was a business of Crane Holdings, Co.

References herein to “Holdings” refer to Crane Holdings, Co.

and its subsidiaries prior to the consummation of the Separation unless the context implies otherwise.

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.

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.

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, 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 Hol dings.

See Note 13, “Fi nancing” and Note 2, “Related Parties" for additional information.

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

As a result of the Separation, net assets of $ 382.9 million were contributed to the Business and recorded on the Consolidated and Combined Statements of Changes in Equity through “Crane Net Investment.”

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 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, 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).

Separation and Distribution Agreement

The Separation and Distribution Agreement sets forth, among other things, the agreements between us and SpinCo regarding the principal transactions necessary to effect the Separation.

It also sets forth other agreements that govern certain aspects of our ongoing relationship with SpinCo after the completion of the Separation.

Transition Services Agreement

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 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

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

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 and services were substantially completed as of December 31, 2023.

Tax Matters Agreement

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.

Employee Matters Agreement

The Employee Matters Agreement, among other things, governs Crane NXT’s, SpinCo’s and their respective subsidiaries’ rights, responsibilities and obligations after the Separation with respect to the following matters:

(i) employees and former employees (and their respective dependents and beneficiaries) who are or were employed with Crane NXT, SpinCo or their respective subsidiaries, (ii) the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans, (iii) employee compensation plans and director compensation plans, including equity plans, and (iv) other human resources, employment and employee benefits matters.

Intellectual Property Matters Agreement

The Intellectual Property Matters Agreement, among other things, governs the continued ownership and use by Crane NXT and SpinCo of their respective trademarks and trade names that include or are comprised of the term “Crane” in their respective businesses.

Significant Accounting Policies

Accounting Principles.

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

The consolidated financial statements include the accounts of Crane Holdings, Co.

Our Consolidated and Combined Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and, therefore, reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the years presented.

All such adjustments are of a normal recurring nature.

The Consolidated and Combined Financial Statements include the accounts of Crane NXT, Co.

and our subsidiaries.

All intercompany balances and transactions have been eliminated upon consolidation.

As used in these notes, the terms "we," "us," "our," "Crane" and the "Company" mean Crane Holdings, Co.

and our subsidiaries unless the context specifically states or implies otherwise.

Basis of presentation.

Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year presentation.

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

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

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

The Consolidated and Combined 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.

Prior to the Separation, costs for certain functions and services performed by centralized Holdings organizations were directly charged to the Business based on specific identification when possible or reasonable allocation methods such as net sales, headcount, usage or other allocation methods.

The results of operations include allocations of costs for administrative functions and services performed on behalf of the Business by centralized groups within Holdings (see Note 2, “Related Parties” for a description of the allocation methodologies).

All charges and allocations for facilities, functions and services performed by Holdings have been deemed settled in cash by the Business to Holdings in the period in which the cost was recorded in the Consolidated and Combined Statements of Operations.

As more fully described in Note 9, “Income Taxes”, 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 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.

Prior to the Separation, Holdings used a centralized approach to cash management and financing its operations.

Accordingly, none of the cash of Holdings has been allocated to the Business in the Consolidated and Combined Financial Statements.

However, cash balances primarily associated with certain of our foreign entities that did not participate in Holdings’ cash management program have been included in the Consolidated and Combined Financial Statements.

Transactions between Holdings and the Business are deemed to have been settled immediately through “Crane Net Investment.” The net effect of the deemed settled transactions is reflected in the Consolidated and Combined Statements of Cash Flows as “Net transfers to Crane” within financing activities and in the Consolidated and Combined Balance Sheets as “Crane Net Investment.” Other

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

transactions, which have historically been cash-settled, are reflected in the Consolidated and Combined Balance Sheets within “Accounts receivable, net” and “Accounts payable.”

All intercompany accounts and transactions within the Business have been eliminated in the preparation of the Consolidated and Combined Financial Statements.

The Consolidated and Combined Financial Statements of the Business include assets and liabilities that have been determined to be specifically identifiable or otherwise attributable to the Business.

All allocations and estimates in the Consolidated and Combined Financial Statements are based on assumptions that management believes are reasonable.

However, for the periods prior to the Separation, the Consolidated and Combined Financial Statements included herein may not be indicative of the financial position, results of operations and cash flows of the Business in the future, or if the Business had been a separate, stand-alone entity during the periods presented.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

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Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary.

Estimates are used when accounting for such items as asset valuations, allowance for doubtful accounts, depreciation and amortization, impairment assessments, reserve for excess and obsolete inventory, reserve for warranty provision, restructuring provisions, employee benefits, taxes, environmental liability and contingencies.

Currency Translation.

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results of operations are translated at the monthly average rates of exchange prevailing during the year.

The related translation adjustments are included in accumulated other comprehensive income (loss) in a separate component of equity.

The related translation adjustments are included in accumulated other comprehensive loss in a separate component of equity.

Revenue Recognition.

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We elect to exclude from the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by us from a customer.

We primarily generate revenue through the manufacture and sale of engineered industrial products.

We primarily generate revenue through the manufacture and sale of technology solutions including advanced detection and sensing systems, software to authenticate and manage transactions and micro-optics materials technology.

Each product within a contract generally represents a separate performance obligation, as we do not provide a significant service of integrating or installing the products, the products do not customize each other, and the products can function independently of each other.

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When products are customized or products are sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, revenue is recognized over time because control is transferred continuously to customers, as the contract progresses.

government, revenue is recognized over time because control is transferred continuously to customers, as the contract progresses.

We exercise judgment to determine whether the products have an alternative use to us.

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When a contract with the U.S.

government or subcontract for the U.S.

government contains clauses indicating that the U.S.

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Under this method, we measure progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

method effectively reflects our progress toward completion, as this methodology includes any work-in-process amounts as part of the measure of progress.

Costs incurred represent work performed, which corresponds with, and thereby depicts, the transfer of control to the customer.

This method effectively reflects our progress toward completion, as this methodology includes any work-in-process amounts as part of the measure of progress.

Costs incurred represent work performed, which corresponds

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

with, and thereby depicts, the transfer of control to the customer.

Total revenue recognized and cost estimates are updated on a monthly basis.

In 2022, the Company recognized approximately $ 120 million in revenue over time related to contracts in progress as of December 31, 2022.

In 2023, the Company recognized approximately $ 211 million in revenue over time related to products.

When there are multiple performance obligations in a single contract, the total transaction price is allocated to each performance obligation based on their relative standalone selling prices.

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Revenue recognized from performance obligations satisfied in previous periods (for example, due to changes in the transaction price or estimates), was not material in any period.

Payment for products is due within a limited time period after shipment or delivery, and we generally do not offer extended payment terms.

Payment is typically due within 30-90 calendar days of the respective invoice dates.

Payment for most products is due within a limited time period after shipment or delivery, typically within 30-90 calendar days of the respective invoice dates.

Customers generally do not make large upfront payments.

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Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

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See Note 4, “Revenue” for further details.

Cost of Goods Sold.

Cost of goods sold includes the costs of inventory sold and the related purchase and distribution costs.

In addition to material, labor and direct overhead and inventoried cost, cost of goods sold include allocations of other expenses that are part of the production process, such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, amortization of production related intangible assets and depreciation expense.

Cost of Sales.

Cost of sales includes the costs of inventory sold and the related purchase and distribution costs.

In addition to material, labor and direct overhead and inventoried cost, cost of sales includes allocations of other expenses that are part of the production process, such as inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, amortization of production related intangible assets and depreciation expense.

We also include costs directly associated with products sold, such as warranty provisions.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses are recognized as incurred.

Such expenses include the costs of promoting and selling products and include such items as compensation, advertising, sales commissions and travel.

Selling, general and administrative expenses are recognized as incurred, or as allocated based on methodologies further discussed in Note 2, “Related Parties.” Such expenses include the costs of promoting and selling products and include such items as compensation, advertising, sales commissions and travel.

Also included are costs related to compensation for other operating activities such as executive office administrative and engineering functions, as well as general operating expenses such as office supplies, non-income taxes, insurance and office equipment rentals.

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Where, based on the weight of all available evidence, it is more likely than not that some amount of a deferred tax asset will not be realized, we establish a valuation allowance for the amount that, in management's judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.

The evidence we consider in reaching such conclusions includes, but is not limited to, (1) future reversals of existing taxable temporary differences, (2) future taxable income exclusive of reversing taxable temporary differences, (3) taxable income in prior carryback year(s) if carryback is permitted under the tax law, (4) cumulative losses in recent years, (5) a history of tax losses or credit carryforwards expiring unused, (6) a carryback or carryforward period that is so brief it limits realization of tax benefits,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and (7) a strong earnings history exclusive of the loss that created the carryforward and support showing that the loss is an aberration rather than a continuing condition.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

We account for unrecognized tax benefits in accordance with ASC 740, which prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

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The tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line of our Consolidated Statement of Operations, while accrued interest and penalties are included within the related tax liability line of our Consolidated Balance Sheets.

We recognize interest and penalties related to unrecognized tax benefits within the provision for income taxes line of our Consolidated and Combined Statements of Operations, while accrued interest and penalties are included within the related tax liability line of our Consolidated and Combined Balance Sheets.

Income taxes as presented herein, for periods prior to the Separation, attribute current and deferred income taxes of Holdings to the Business’ stand-alone financial statements in a manner that is systematic, rational and consistent with the asset and liability method prescribed by ASC 740.

Accordingly, the Business’ income tax provision was prepared following the separate return method.

The separate return method applies ASC 740 to the stand-alone financial statements of each member of the consolidated group as if the group members were separate taxpayers.

As a result, actual transactions included in the consolidated financial statements of Holdings may not be included in the separate Consolidated and Combined Financial Statements of the Business.

Similarly, the tax treatment of certain items reflected in the Consolidated and Combined Financial Statements of the Business may not be reflected in the consolidated financial statements and tax returns of Holdings.

Therefore, such items as net operating losses, credit carry forwards and valuation allowances may exist in the stand-alone financial statements that may or may not exist in Holdings’ consolidated financial statements.

As such, the income taxes of the Business as presented in the Consolidated and Combined Financial Statements may not be indicative of the income taxes that the Business will generate in the future.

Current obligations for income taxes in jurisdictions where the Business files a combined tax return with Holdings are deemed settled with Holdings and are reflected within “Net transfers to Crane” as a financing activity in the Consolidated and Combined Statements of Cash Flows.

Research and Development.

We conduct research and development activities for the purpose of developing new products and enhancing existing products.

Research and development costs are expensed as incurred.

See Note 5, “Research and Development” for further details.

Stock-Based Compensation.

We provide long-term incentive compensation through stock options, restricted share units, performance-based restricted share units and deferred stock units.

Prior to the Separation, Crane NXT employees and directors participated in Holdings’ equity incentive plans and received equity awards under those plans in respect of Holdings common shares.

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.

The Company recognizes stock-based compensation expense at the grant date based on the fair value of the award and recognizes the fair value on a straight-line basis over the vesting period, or as performance goals are achieved.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options, with model assumptions including dividend yield, expected volatility, the risk-free interest rate and the expected life of the awards.

See Note 7, “Stock-Based Compensation Plans” for further details.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Earnings Per Share.

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

Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units.

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

Diluted earnings per share gives effect to all potential dilutive common shares outstanding during the year.

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 and directors.

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

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

On April 3, 2023, 56.7 million shares of our common stock, par value $ 1.00 per share, were distributed to Holdings stockholders of record as of March 23, 2023, as part of the Separation.

This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Separation and such shares are treated as issued and outstanding for purposes of calculating historical earnings per share.

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 for the year ended December 31, 2023 was based on the weighted average number of common shares after the Separation.

(in millions, except per share data) For the year ended December 31, 2023 2022 2021

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The computation of diluted earnings per share excludes the effect of the potential exercise of stock options when the average market price of the common stock is lower than the exercise price of the related stock options.

During 2022, 2021 and 2020, the number of stock options excluded from the computation was 0.4 million, 1.2 million and 2.1 million, respectively.

During 2023, the number of stock options excluded from the computation was 0.4 million.

Cash and Cash Equivalents.

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As a result, the carrying amount of cash and cash equivalents approximates fair value.

The Business participated in Holdings’ centralized cash management and financing programs (see Note 2, “Related Parties” for additional information).

The cash reflected on the Consolidated and Combined Balance Sheets represents cash on hand at certain foreign entities that did not participate in the centralized cash management program and are specifically identifiable to the Business.

Accounts Receivable, Net.

Accounts receivable are carried at net realizable value.

The allowance for doubtful accounts was $ 14.1 million and $ 10.4 million as of December 31, 2022 and 2021, respectively.

The allowance for doubtful accounts activity was not material to our financial results for the years ended December 31, 2022 and 2021.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers and relatively small account balances within the majority of our customer base and their dispersion across different businesses.

The allowance for credit losses was $ 11.8 million and $ 6.1 million as of December 31, 2023 and 2022, respectively.

The allowance for credit losses activity was no t material to our financial results for the years ended December 31, 2023 and 2022.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers, the nature of our customers, their credit worthiness, their relatively small account balances within the majority of our customer base and their dispersion across different businesses.

We periodically evaluate the financial strength of our customers and believe that our credit risk exposure is limited.

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Inventories, net include the costs of material, labor and overhead and are stated at the lower of cost or net realizable value.

Domestic inventories are stated at either the lower of cost or net realizable value using the last-in, first-out (“LIFO”) method or the lower of cost or net realizable value using the first-in, first-out (“FIFO”) method.

Inventories held in foreign locations are primarily stated at the lower of cost or market using the FIFO method.

The LIFO method is not being used at our foreign locations as such a method is not allowable for tax purposes.

Changes in the levels of LIFO inventories have increased cost of sales by $ 8.4 million, $ 3.6 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020 respectively.

The portion of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

inventories costed using the LIFO method was 37.2 % and 30.1 % of consolidated inventories as of December 31, 2022, and 2021, respectively.

The cost for certain inventories in the U.S.

is determined using the last-in, first-out (“LIFO”) method and the first-in, first-out (“FIFO”) method is primarily used for all other inventories.

The portion of inventories costed using the LIFO method was 12.4 % and 12.2 % of consolidated and combined inventories as of December 31, 2023, and 2022, respectively.

If inventories that were valued using the LIFO method had been valued under the FIFO method, they would have been higher by $ 9.5 million and $ 14.8 million as of December 31, 2023 and 2022, respectively.

The reserve for excess and obsolete inventory was $ 99.3 million and $ 98.6 million as of December 31, 2022, and 2021, respectively.

The reserve for excess and obsolete inventory was $ 33.3 million

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

and $ 29.0 million as of December 31, 2023 and 2022, respectively.

The reserve for excess and obsolete inventory activity was no t material to our financial results for the years ended December 31, 2023 and 2022.

Valuation of Long-Lived Assets.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Examples of events or changes in circumstances could include, but are not limited to, a prolonged economic downturn, current period operating or cash flow losses combined with a history of losses or a forecast of continuing losses associated with the use of an asset or asset group, or a current expectation that an asset or asset group will be sold or disposed of before the end of its previously estimated useful life.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the long-lived asset (or asset group), as well as specific appraisal in certain instances.

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If the future undiscounted cash flows are less than the carrying value, then the long-lived asset is considered impaired and a loss is recognized based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments which impact these assessments relate to the expected useful lives of long-lived assets and our ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of long-lived assets, there is risk that the carrying value of our long-lived assets may require adjustment in future periods.

For the years ended December 31, 2023, 2022 and 2021, there were no impairment charges identified.

Property, Plant and Equipment, net.

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Property, plant and equipment, net $ 261.2 $ 261.6

Property, plant and equipment is stated at cost and depreciation is calculated by the straight-line method over the estimated useful lives of the respective assets, which range from 10 to 25 years for buildings and improvements and three to 10 years for machinery and equipment.

Depreciation expense was $ 39.6 million, $ 42.2 million and $ 44.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Our business acquisitions have typically resulted in the recognition of goodwill and other intangible assets.

We follow the provisions under ASC Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”) as it relates to the accounting for goodwill in the Consolidated Financial Statements.

These provisions require that we, on at least an annual basis, evaluate the fair value of the reporting units to which goodwill is assigned and attributed and compare that fair value to the carrying value of the reporting unit to determine if an impairment has occurred.

We perform our annual impairment testing during the fourth quarter.

We follow the provisions under ASC Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”) and assess the carrying value of goodwill annually during the fourth quarter.

Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a potential impairment.

We believe that there have been no other events or circumstances which would more likely than not reduce the fair value of our reporting units below its carrying value.

We determine the fair value of each reporting unit for our goodwill impairment testing.

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 December 31, 2022, we had six reporting units.

When performing our annual impairment assessment, we compare the fair value of each of our reporting units to our respective carrying value.

Goodwill is considered to be potentially impaired when the net book value of the reporting unit exceeds its estimated fair value.

Fair values are established primarily by discounting estimated future cash flows at an estimated cost of capital which varies for each reporting unit and which, as of our most recent annual impairment assessment, ranged between 9.5 % and 11.5 % (a weighted average of 10.8 %), reflecting the respective inherent business risk of each of the reporting units tested.

This methodology for valuing our reporting units (commonly referred to as the Income Method) has not changed since the adoption of the provisions under ASC 350.

As of December 31, 2023, we had two reporting units.

The fair value of each reporting unit is determined using a combination of the income approach, using discounted cash flows, and the market approach using comparable public company multiples.

Assumptions are reviewed to ensure that the income approach and the market approach do not result in significantly different fair value calculations.

Based on the results of our most recent annual impairment test in the fourth quarter of 2023, both reporting unit fair values were significantly higher than their carrying values.

No impairment charges have been required during 2023, 2022 or 2021.

The determination of discounted cash flows is based on the businesses’ strategic plans and long-range planning forecasts, which change from year to year.

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Profit margin assumptions are projected by each reporting unit based on the current cost structure and anticipated net cost increases/reductions.

There are inherent uncertainties related to these assumptions, including changes in market conditions, and management judgment is necessary in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

applying them to the analysis of goodwill impairment.

In addition to the foregoing, for each reporting unit, market multiples are used to corroborate discounted cash flow results where fair value is estimated based on earnings multiples determined by available public information of comparable businesses.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of our reporting units, it is possible a material change could occur.

If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may then be determined to be overstated and a charge would need to be taken against net earnings.

No impairment charges have been required during 2022, 2021 or 2020.

There are inherent uncertainties related to these assumptions, including changes in market conditions, and management judgment is necessary in applying them to the analysis of impairment.

The estimated cost of capital used in the discounted cash flow analysis varies for each reporting unit and ranged between 11.0 % and 12.0 % (a weighted average of 11.4 %), at our most recent annual goodwill impairment assessment.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Changes to goodwill are as follows:

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

(in millions) Crane Payment Innovations Crane Currency Total

Balance as of December 31, 2021 $ 645.4 $ 215.2 $ 860.6

Adjustments to purchase price allocations — ( 0.1 ) — — $ ( 0.1 )

Currency translation ( 23.0 ) ( 1.0 ) ( 24.0 )

Balance as of December 31, 2022 $ 622.4 $ 214.2 $ 836.6

Disposal on sale of business — ( 22.3 ) — — $ ( 22.3 )

Currency translation 4.3 0.3 4.6

Balance as of December 31, 2023 $ 626.7 $ 214.5 $ 841.2

For the year ended December 31, 2022, adjustments within the Process Flow Technologies segment of $ 22.3 million relate to the disposition of the Crane Supply business.

For the year ended December 31, 2021, adjustments within the Process Flow Technologies segment of $ 0.1 million represent the finalization of the purchase price allocation for the acquisition of CIRCOR International, Inc.’s Instrumentation & Sampling Business (“I&S”).

Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment.

Intangibles with indefinite useful lives, consist of trademarks and tradenames.

If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value.

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

In addition to annual testing for impairment of indefinite-lived intangible assets, we review all of our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability is based upon projections of anticipated future undiscounted cash flows associated with the use and eventual disposal of the definite-lived intangible asset (or asset group), as well as specific appraisal in certain instances.

Reviews occur at the lowest level for which identifiable cash flows are largely independent of cash flows associated with other long-lived assets or asset groups and include estimated future revenues, gross profit margins, operating profit margins and capital expenditures which are based on the businesses’ strategic plans and long-range planning forecasts, which change from year to year.

The revenue growth rates included in the forecasts represent our best estimates based on current and forecasted market conditions, and the profit margin assumptions are based on the current cost structure and anticipated net cost increases or reductions.

There are inherent uncertainties related to these assumptions, including changes in market conditions, and management’s judgment in applying them to the analysis.

If the future undiscounted cash flows are less than the carrying value, then the definite-lived intangible asset is considered impaired and a charge would be taken against net earnings based on the amount by which the carrying amount exceeds the estimated fair value.

Judgments that we make which impact these assessments relate to the expected useful lives of definite-lived assets and its ability to realize any undiscounted cash flows in excess of the carrying amounts of such assets, and are affected primarily by changes in the expected use of the assets, changes in technology or development of alternative assets, changes in economic conditions, changes in operating performance and changes in expected future cash flows.

Since judgment is involved in determining the recoverable amount of definite-lived intangible assets, there is risk that the carrying value of our definite-lived intangible assets may require adjustment in future periods.

Historical results to date have generally approximated expected cash flows for the identifiable cash flow generating level.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, we had $ 416.6 million of net intangible assets, of which $ 67.3 million were intangibles with indefinite useful lives, consisting of trade names.

As of December 31, 2021, we had $ 467.1 million of net intangible assets, of which $ 70.6 million were intangibles with indefinite useful lives, consisting of trade names.

In addition to an annual assessment for impairment of indefinite-lived intangible assets, we review all of our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

No impairment charges have been required during 2023, 2022 or 2021.

As of December 31, 2023, we had $ 308.9 million of net intangible assets, of which $ 45.5 million were intangibles with indefinite useful lives included within intellectual property rights.

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 included within intellectual property rights.

Changes to intangible assets are as follows:

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Balance at beginning of period, net of accumulated amortization $ 344.9 $ 388.5 $ 433.3

Additions — — 52.5

Amortization expense ( 35.9 ) ( 36.0 ) ( 37.2 )

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Balance at end of period, net of accumulated amortization $ 308.9 $ 344.9 $ 388.5

For the year ended December 31, 2020, additions to intangible assets represent the preliminary purchase price allocation related to the January 2020 acquisition of I&S.

A summary of intangible assets follows:

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Customer relationships and backlog 18.8 504.4 269.5 234.9 502.9 242.0 260.9

Drawings 40.0 11.1 10.7 0.4 11.1 10.6 0.5

Other 10.0 99.8 73.0 26.8 98.7 62.7 36.0

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2029 and after $ 110.1

Crane Net Investment.

Holdings’ net investment in the Business is presented as “Crane net investment” on the Consolidated and Combined Balance Sheets.

The Consolidated and Combined Statements of Changes in Equity include net cash transfers between Holdings and the Business as well as related party receivables and payables between the Business and other Holdings affiliates.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Accumulated Other Comprehensive Loss.

The tables below provide the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on the Consolidated Balance Sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tables below provide the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on the Consolidated and Combined Balance Sheets.

(in millions) Defined Benefit Pension and Other Postretirement Items Currency Translation Adjustment Total (a)

Balance as of December 31, 2020 $ ( 8.3 ) $ ( 25.2 ) $ ( 33.5 )

Other comprehensive (loss) income before reclassifications ( 67.4 ) 70.9 3.5

Amounts reclassified from accumulated other comprehensive loss 13.8 — 13.8

Net period other comprehensive (loss) income ( 53.6 ) 70.9 17.3

Balance as of December 31, 2020 ( 397.9 ) ( 68.5 ) ( 466.4 )

Other comprehensive (loss) income before reclassifications 78.0 ( 69.8 ) 8.2

Other comprehensive income (loss) before reclassifications 7.5 ( 46.1 ) ( 38.6 )

Amounts reclassified from accumulated other comprehensive loss ( 0.2 ) — ( 0.2 )

Net period other comprehensive (loss) income 96.0 ( 69.8 ) 26.2

Net period other comprehensive income (loss) 7.3 ( 46.1 ) ( 38.8 )

Balance as of December 31, 2021 ( 1.0 ) ( 71.3 ) ( 72.3 )

3 unchanged sentences

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

(a) Net of tax benefit of $ 106.6 million , $ 117.9 million and $ 148.2 million for 2022, 2021, and 2020, respectively.

Other comprehensive (loss) income before reclassifications ( 3.2 ) 18.1 14.9

Amounts reclassified from accumulated other comprehensive income (loss) ( 2.0 ) — ( 2.0 )

Net period other comprehensive (loss) income ( 5.2 ) 18.1 12.9

Balance as of December 31, 2023 $ 3.8 $ ( 122.4 ) $ ( 118.6 )

Net of tax (detriment) benefit of $( 1.5 ) million, $( 2.1 ) million and $ 0.8 million for December 31, 2023, 2022, and 2021, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2023, 2022 and 2021.

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

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

(in millions) Amount Reclassified from Accumulated Other Comprehensive Loss

5 unchanged sentences

Prior service costs ( 1.1 ) ( 1.1 ) ( 1.1 )

Net gain ( 0.7 ) — —

Total before tax $ ( 2.5 ) $ ( 1.2 ) $ ( 0.3 )

1 unchanged sentence

Total reclassifications for the period $ ( 2.0 ) $ ( 0.9 ) $ ( 0.2 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

The Company considered the applicability and impact of all Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the Company's Consolidated Statement of Operations, Balance Sheets and Cash Flows.

Note 2 – Acquisitions

Acquisitions are accounted for in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”).

Accordingly, we make an initial allocation of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed liabilities.

We obtain this information during due diligence and through other sources.

In the months after closing, as we obtain additional information about these assets and liabilities, including through tangible and intangible asset appraisals, we are able to refine estimates of fair value and more accurately allocate the purchase price.

Only items identified as of the acquisition date are considered for subsequent adjustment to the purchase price allocation.

We will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

In order to allocate the consideration transferred for our acquisitions, the fair values of all identifiable assets and liabilities must be established.

For accounting and financial reporting purposes, fair value is defined under ASC Topic 820, “Fair Value Measurement and Disclosure” as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability.

Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants.

Use of different estimates and judgments could yield different results.

Instrumentation & Sampling Business Acquisition

On January 31, 2020, we completed the acquisition of I&S for $ 172.3 million on a cash-free and debt-free basis, subject to a later adjustment reflecting I&S' net working capital, cash, the assumption of certain debt-like items, and I&S' transaction expenses.

We funded the acquisition through short-term borrowings consisting of $ 100 million of commercial paper and $ 67 million from our revolving credit facility, and cash on hand.

In August 2020, we received $ 3.1 million related to the final working capital adjustment which resulted in net cash paid of $ 169.2 million.

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 Process Flow Technologies segment.

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

Goodwill from this acquisition is not deductible for tax purposes.

Allocation of Consideration Transferred to Net Assets Acquired

The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S.

The fair value of certain assets and liabilities has been completed as required by ASC 805.

Net assets acquired (in millions)

Total current assets $ 21.0

Property, plant and equipment 11.0

Other assets 6.0

Intangible assets 52.5

Goodwill 106.0

Total assets acquired $ 196.5

Total current liabilities $ 8.1

Other liabilities 19.2

Total assumed liabilities $ 27.3

Net assets acquired $ 169.2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:

Intangible Assets (dollars in millions)

Intangible Fair Value Weighted Average Life

Trademarks/trade names $ 2.6 13

Customer relationships 49.0 14

Backlog 0.9 1

Total acquired intangible assets $ 52.5

The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach.

This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset.

Therefore, a portion of I&S’ earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership.

The trade names are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 13 years.

The fair values of the customer relationships and backlog intangible assets were determined by using an income approach which is a commonly accepted valuation approach.

Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows.

These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured.

Both the amount and the duration of the cash flows are considered from a market participant perspective.

Our estimates of market participant net cash flows considered historical and projected pricing, operational performance including market participant synergies, aftermarket retention, product life cycles, material and labor pricing, and other relevant customer, contractual and market factors.

Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are expected to decline over time.

The attrition-adjusted future cash flows are then discounted to present value using an appropriate discount rate.

The customer relationship asset is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 14 years.

Supplemental Pro Forma Data

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 for the period.

Acquisition-Related Costs

Acquisition-related costs are being expensed as incurred.

For the year ended December 31, 2020, we recorded $ 12.9 million of integration and transaction costs.

Acquisition-related costs are recorded within “Acquisition-related and integration charges” in our Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which intends to improve reportable segment disclosure requirements.

The new standard includes new requirements to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within the reported segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported segment's profit or loss to assess performance and allocate resources.

The standard is effective for all public entities for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted.

The Company is currently evaluating the potential impact of this standard on its Consolidated and Combined Financial Statements and Disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures which intends to improve the transparency of income tax disclosures.

The new standard requires public entities to provide greater disaggregation in their rate reconciliation, including new requirements to present reconciling items on a gross basis within specified categories, to disclose both percentages and dollar amounts, and to disaggregate individual reconciling items by

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

jurisdiction and nature when the effect of the items meets a quantitative threshold.

The guidance also includes new requirements to provide users of the financial statements with better information on future cash flow prospects.

The standard is effective for all public entities for annual periods beginning after December 15, 2024 on a prospective basis, with a retrospective option, and early adoption permitted for annual financial statements that have not yet been issued.

The Company is currently evaluating the potential impact of this standard on its Consolidated and Combined Financial Statements and Disclosures.

The Company considered the applicability and impact of other Accounting Standards Updates issued by the Financial Accounting Standards Board (FASB) and determined them to be either not applicable or are not expected to have a material impact on the Company's Consolidated and Combined Statements of Operations, Balance Sheets and Cash Flows.

Note 2 - Related Parties

Prior to the Separation, the Business was managed and operated in the normal course of business with other affiliates of Holdings.

Accordingly, certain shared costs were allocated to the Business and are reflected as expenses in the Consolidated and Combined Financial Statements.

Allocated Centralized Costs

The Consolidated and Combined Financial Statements were prepared on a stand-alone basis and were derived from the consolidated financial statements and accounting records of Holdings for the periods prior to the Separation.

Prior to the Separation, Holdings incurred corporate costs for services provided to the Business as well as other Holdings businesses.

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 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 were $ 13.5 million, $ 31.8 million and $ 28.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

These costs are included in “Selling, general and administrative” in the Consolidated and Combined 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 periods prior to the Separation.

The amounts that would have been or will be incurred on a stand-alone basis could differ from the amounts allocated due to economies of scale, difference in management judgment, a requirement for more or fewer employees or other factors.

Management does not believe, however, that it is practicable to estimate what these expenses would have been had the Business operated as an independent entity, including any expenses associated with obtaining any of these services from unaffiliated entities.

In addition, the future results of operations, financial position and cash flows could differ materially from the historical results presented herein.

Separation Costs

In connection with the Separation, we have incurred transaction related expenses of $ 20.9 million for the year ended December 31, 2023 recorded in “Selling, general and administrative” in the Consolidated and Combined Statements of Operations.

Separation costs primarily consist of professional service fees.

There were no allocated transaction-related expenses in connection with the Separation for the years ended December 31, 2022 and 2021.

Cash Management and Financing.

Prior to the Separation, the Business participated in Holdings’ centralized cash management and daily cash sweeps.

Disbursements were made through centralized accounts payable systems which were operated by Holdings.

Cash receipts were transferred to centralized accounts, which were also maintained by Holdings.

As cash was received and disbursed by Holdings, it was accounted for by the Business through “Crane Net Investment.” Historically, Holdings had centrally managed and swept cash for most domestic and certain European entities.

However, certain legal entities did not participate in Holdings’ centralized cash management program for a variety of reasons.

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 Consolidated and Combined Balance Sheets.

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 Consolidated and Combined 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 Consolidated and Combined Balance Sheets in the historical periods presented when the

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

related party transactions were not settled in cash.

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 $ 2.5 million, $ 14.4 million and $ 16.1 million for the years ended December 31, 2023, 2022 and 2021, respectively, which are included in the Business’ results as “Related party interest expense” in the Consolidated and Combined 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 Consolidated and Combined Statements of Cash Flows.

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 Consolidated and Combined Balance Sheets as of December 31, 2022 in the amounts of $ 0.1 million and $ 1.7 million, respectively.

After the Separation, SpinCo and its subsidiaries were identified as related parties.

As of December 31, 2023, we have net outstanding receivables with SpinCo and its subsidiaries of $ 0.3 million related to the transition services agreement and $ 4.5 million related to indemnification under the tax matters agreement.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 3 – Segment Information

In accordance with ASC Topic 280, “Segment Reporting,” for purposes of segment performance measurement, we do not allocate to the business segments items that are of a non-operating nature, including charges which occur from time to time related to our asbestos liability and our legacy environmental liabilities, as such items are not related to current business activities;

In accordance with ASC Topic 280, “Segment Reporting,” for purposes of segment performance measurement, we do not allocate to the business segments items that are of a non-operating nature;

or corporate organizational and functional expenses of a governance nature.

“Corporate expenses-before asbestos and environmental charges” consist of corporate office expenses including, compensation, benefits, occupancy, depreciation, and other administrative costs.

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

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

We account for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

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

We currently have four reporting segments:

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

A brief description of each of our current segments is as follows:

Aerospace & Electronics

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

Its brands have decades of proven experience, and in many cases invented the critical technologies in their respective markets.

The business designs and delivers proven systems, reliable components, and flexible power solutions that excel in tough and mission-critical environments.

Products and services are organized into six integrated solutions:

Sensing Components & Systems, Electrical Power Solutions, Fluid Management Solutions, Landing & Control Systems, and Microwave Solutions.

Process Flow Technologies

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

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

Process Valves and Related Products include on/off valves and related products for critical and demanding applications in the chemical, oil & gas, power, and general industrial end markets globally.

Commercial Valves includes the manufacturing and distribution of valves and related products for the non-residential construction, general industrial, and to a lesser extent, municipal markets.

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

Payment & Merchandising Technologies

The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (“CPI”) and Crane Currency.

We currently have two reporting segments:

Crane Payment Innovations and Crane Currency.

Crane Payment Innovations

CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions.

CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions.

Crane Currency provides advance security solutions based on proprietary micro-optic technology for the global banknote industry.

Engineered Materials

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Key research and development and manufacturing facilities are located in the United States, the United Kingdom, Mexico, Japan, and Germany, with additional sales offices across the world.

Crane Currency

Crane Currency provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products.

Facilities are located in the United States, Sweden and Malta.

Financial information by reportable segment is set forth below:

(in millions) December 31, 2023 2022 2021

Aerospace & Electronics $ 667.3 $ 638.3 $ 650.7

Process Flow Technologies 1,109.4 1,196.6 1,005.8

Payment & Merchandising Technologies 1,339.9 1,345.1 1,104.8

Engineered Materials 258.3 228.0 175.6

Crane Payment Innovations $ 886.4 $ 874.3 $ 805.7

Crane Currency 504.9 465.6 539.4

Total net sales $ 1,391.3 $ 1,339.9 $ 1,345.1

Operating profit:

Aerospace & Electronics $ 120.3 $ 110.0 $ 100.7

Process Flow Technologies 168.2 182.5 97.7

Payment & Merchandising Technologies 333.1 307.5 100.6

Engineered Materials 32.6 26.9 22.7

Operating profit and Income before income taxes:

Crane Payment Innovations $ 242.8 $ 217.1 $ 164.5

Crane Currency 116.3 117.3 145.1

Corporate ( 72.3 ) ( 33.1 ) ( 30.4 )

1 unchanged sentence

$ 286.8 $ 301.3 $ 279.2

Interest income $ 1.1 $ 0.2 $ 0.1

Interest expense ( 48.1 ) ( 41.9 ) ( 41.8 )

Related party interest expense ( 2.5 ) ( 14.4 ) ( 16.1 )

Miscellaneous income, net 2.5 3.1 4.7

Income before income taxes $ 239.8 $ 248.3 $ 226.1

Capital expenditures:

Aerospace & Electronics $ 9.3 $ 14.1 $ 9.8

Process Flow Technologies 23.9 18.8 13.7

Payment & Merchandising Technologies 21.3 18.6 9.3

Engineered Materials 3.8 2.2 1.2

Crane Payment Innovations $ 7.6 $ 5.0 $ 4.5

Crane Currency 25.9 16.3 14.1

Corporate 1.6 — —

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Depreciation and amortization:

Aerospace & Electronics $ 14.1 $ 14.7 $ 14.2

Process Flow Technologies 19.5 22.0 21.6

Payment & Merchandising Technologies 78.2 81.3 85.9

Engineered Materials 5.8 1.6 3.7

Crane Payment Innovations $ 31.2 $ 32.9 $ 34.5

Crane Currency 44.2 45.3 46.8

Corporate 2.2 0.5 0.5

Total depreciation and amortization $ 77.6 $ 78.7 $ 81.8

(a) For the year ended December 31, 2022, operating profit includes a loss on divestiture of asbestos-related assets and liabilities of $ 162.4 million and net restructuring charges of $ 10.4 million.

For the year ended December 31, 2021, operating profit included a restructuring gain of $ 16.9 million.

For the year ended December 31, 2020, operating profit included acquisition-related and integration charges of $ 12.9 million and net restructuring charges of $ 32.3 million.

See Note 15, “Restructuring Charges” for discussion of the restructuring charges.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2023, 2022 and 2021, operating profit includes net restructuring charges (gains) of $ 0.5 million, $ 6.2 million, and $( 3.7 ) million respectively.

See Note 15, “Restructuring” for discussion of the restructuring charges.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Net sales by geographic region:

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Net sales (a)

United States $ 1,990.4 $ 1,858.1 $ 1,862.7

Canada 183.3 293.6 162.9

United Kingdom 131.9 140.9 270.9

Continental Europe 475.8 411.2 480.1

Other international 593.5 704.2 160.3

North America $ 787.1 $ 826.9 $ 791.3

Western Europe 196.3 187.8 139.7

Rest of the World 407.9 325.2 414.1

Total net sales $ 1,391.3 $ 1,339.9 $ 1,345.1

(a) Net sales by geographic region are based on the destination of the sale.

Net sales by geographic region are based on the destination of the sale.

Balance sheet items by reportable segment is set forth below:

(in millions) December 31, 2023 2022

Aerospace & Electronics $ 202.3 $ 202.5

Process Flow Technologies 317.3 349.4

Payment & Merchandising Technologies 836.6 860.6

Engineered Materials 171.3 171.3

Crane Payment Innovations $ 626.7 $ 622.4

Crane Currency 214.5 214.2

Total goodwill $ 841.2 $ 836.6

Aerospace & Electronics $ 663.3 $ 604.7

Process Flow Technologies 1,064.7 1,240.4

Payment & Merchandising Technologies 2,125.9 2,096.5

Engineered Materials 218.6 220.5

Crane Payment Innovations $ 1,279.1 $ 1,266.1

Crane Currency 814.4 863.3

Corporate 35.9 —

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Long-lived assets (a)

United States $ 310.3 $ 324.4

Canada 0.8 18.2

Europe 213.4 231.3

Other international 66.3 62.8

Corporate 11.6 15.6

North America $ 159.7 $ 139.2

Western Europe 134.7 142.9

Rest of the World 14.6 13.6

Total long-lived assets $ 309.0 $ 295.7

(a) Long-lived assets, net by geographic region are based on the location of the business unit.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-lived assets, net by geographic region are based on the location of the business unit and consist of property, plant and equipment and operating lease assets.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 4 - Revenue

2 unchanged sentences

(in millions) December 31, 2023 2022 2021

Aerospace & Electronics

Commercial Original Equipment $ 250.5 $ 229.4 $ 226.4

Military Original Equipment 231.2 239.7 258.7

Commercial Aftermarket Products 129.3 104.5 93.0

Military Aftermarket Products 56.3 64.7 72.6

Total Aerospace & Electronics $ 667.3 $ 638.3 $ 650.7

Process Flow Technologies

Process Valves and Related Products $ 749.8 $ 717.1 $ 631.6

Commercial Valves 232.2 374.2 286.3

Pumps and Systems 127.4 105.3 87.9

Total Process Flow Technologies $ 1,109.4 $ 1,196.6 $ 1,005.8

Payment & Merchandising Technologies

Payment Acceptance and Dispensing Products

$ 874.3 $ 805.7 $ 670.8

Banknotes and Security Products 465.6 539.4 434.0

Total Payment & Merchandising Technologies $ 1,339.9 $ 1,345.1 $ 1,104.8

Engineered Materials

FRP- Recreational Vehicles $ 111.9 $ 102.5 $ 68.9

FRP- Building Products 112.5 94.9 83.1

FRP- Transportation 33.9 30.6 23.6

Total Engineered Materials $ 258.3 $ 228.0 $ 175.6

Crane Payment Innovations

Products $ 758.7 $ 752.2 $ 692.2

Services 127.7 122.1 113.5

Total Crane Payment Innovations $ 886.4 $ 874.3 $ 805.7

Crane Currency Products $ 504.9 $ 465.6 $ 539.4

Total Net Sales $ 1,391.3 $ 1,339.9 $ 1,345.1

2 unchanged sentences

As of December 31, 2023, backlog was $ 459.8 million.

We expect to recognize approximately 90 % of our remaining performance obligations as revenue in 2023, an additional 7 % by 2024 and the balance thereafter.

We expect to recognize approximately 85 % of our remaining performance obligations as revenue in 2024, 9 % in 2025 and the balance thereafter.

Contract Assets and Contract Liabilities

Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S.

government or indirectly to the U.S.

government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

government, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer.

Contract assets are assessed for impairment and recorded at their net realizable value.

1 unchanged sentence

Revenue related to contract liabilities is recognized when control is transferred to the customer.

We report contract assets, which are included within “Other current assets” in our Consolidated Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” on our Consolidated Balance Sheets, on a contract-by-contract net basis at the end of each reporting period.

Net contract assets and contract liabilities consisted of the following:

We report contract assets, which are included within “Other current assets” in our Consolidated and Combined Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” in our Consolidated and Combined Balance Sheets, on a contract-by-contract net basis at the end of each reporting period.

Net contract assets and contract liabilities were as follows:

(in millions) December 31, 2023 2022

2 unchanged sentences

During 2023 we recognized revenue of $ 87.8 million related to contract liabilities as of December 31, 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The business had one individually significant customer within the Crane Currency segment with net sales of $ 213.1 million, $ 231.9 million and $ 242.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Note 5 – Research and Development

Research and development costs are expensed when incurred and are included in “Selling, general and administrative” in our Consolidated Statements of Operations.

Research and development costs are expensed when incurred and are included in “Selling, general and administrative” in our Consolidated and Combined Statements of Operations.

(in millions) December 31, 2023 2022 2021

Research and Development Costs $ 42.8 $ 33.9 $ 33.2

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 6 – Pension and Postretirement Benefits

In the United States, we sponsor a defined benefit pension plan that covers approximately 12 % of all U.S.

Effective January 1, 2013, pension eligible non-union employees no longer earn future benefits in the domestic defined benefit pension plan.

The benefits are based on years of service and compensation on a final average pay basis, except for certain hourly employees where benefits are fixed per year of service.

Charges to expense are based upon costs computed by an independent actuary.

Contributions are intended to provide for future benefits earned to date.

Additionally, a number of our non-U.S.

subsidiaries sponsor defined benefit pension plans that cover approximately 12 % of all non-U.S.

A number of our non-U.S.

subsidiaries sponsor defined benefit pension plans that provide ongoing benefits for approximately 8 % of all non-U.S.

employees as of December 31, 2023.

The benefits are typically based upon years of service and compensation.

Most of these plans are funded by company contributions to pension funds, which are held for the sole benefit of plan participants and beneficiaries.

In December 2022, we settled the pension plan for the salaried non-bargaining employees of Crane Canada Co.

and recognized a loss of $ 7.0 million, net of tax.

Excess plan assets have been reclassified to current receivables and will be recognized upon final approval from regulatory authorities which is expected in 2023.

We estimate that the Company will receive a distribution of approximately $ 43 million after distributions to plan participants.

Additionally, in the United States, we sponsor a defined benefit pension plan that covers less than 1 % of U.S.

employees as of December 31, 2023.

The benefits are based on years of service and compensation.

Charges to expense are based upon costs computed by an independent actuary.

The plan is funded on a pay-as-you-go basis.

Postretirement Plans

Postretirement health care and life insurance benefits are provided for certain employees hired before January 1, 1990, who meet minimum age and service requirements.

We also have postretirement medical and Medicare supplement that cover substantially all former full-time U.S.

employees of Crane Currency.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the projected benefit obligations, fair value of plan assets and funded status is as follows:

Postretirement health care benefits are provided for certain employees hired before July 1, 2013, who meet minimum age and service requirements.

A summary of the projected benefit obligations, fair value of plan assets and funded status for the plans is as follows:

Pension Benefits Postretirement Benefits

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Plan participants’ contributions 0.4 0.4 — —

Amendments 0.7 ( 0.7 ) — —

Actuarial (gain) loss ( 291.2 ) ( 64.8 ) ( 7.3 ) ( 0.2 )

Actuarial loss (gain) 7.4 ( 24.3 ) ( 2.9 ) ( 6.4 )

Settlements ( 3.7 ) ( 2.2 ) — —

Curtailments ( 1.0 ) 0.5 — —

Benefits paid ( 4.1 ) ( 3.0 ) ( 1.6 ) ( 1.4 )

13 unchanged sentences

Funded status $ 5.9 $ 11.5 $ ( 12.7 ) $ ( 16.3 )

In the U.S., 2022 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

In the U.S., 2023 actuarial losses in the projected benefit obligation were primarily the result of a decrease in the discount rate.

Other sources of gains or losses such as plan experience, updated census data and minor adjustments to actuarial assumptions generated combined losses of less than 1 % of expected year end obligations.

In the Non-U.S.

countries, 2022 actuarial gains in the projected benefit obligation were primarily the result of increases in discount rates.

Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation, mortality table updates and minor adjustments to other actuarial assumptions generated combined losses of approximately 3 % of expected year end obligations.

In the U.S., 2021 actuarial gains in the projected benefit obligation were primarily the result of an increase in the discount rate.

countries, 2023 actuarial losses in the projected benefit obligation were primarily the result of decreases in discount rates.

In the U.S., 2022, there was no allocated benefit obligation.

In the non-U.S.

countries, 2022 actuarial gains in the projected benefit obligation were primarily the result of increases in discount rates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amounts recognized on our Consolidated Balance Sheets consist of:

Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation and minor adjustments to other actuarial assumptions generated combined gains of 2 % of expected year end obligations.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Amounts recognized on our Consolidated and Combined Balance Sheets consist of:

Pension Benefits Postretirement Benefits

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Other assets $ 13.0 $ 14.8 $ — $ —

Current liabilities ( 1.6 ) ( 1.5 ) ( 2.2 ) ( 2.5 )

Accrued liabilities ( 0.1 ) ( 0.1 ) ( 1.3 ) ( 1.8 )

Accrued pension and postretirement benefits ( 7.0 ) ( 3.2 ) ( 11.4 ) ( 14.5 )

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Total recognized in accumulated other comprehensive loss $ 7.4 $ ( 0.1 ) $ ( 8.8 ) $ ( 7.7 )

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the U.S.

plans, are as follows:

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets are as follows:

Pension Obligations/Assets

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Fair value of plan assets $ — $ — $ 83.5 79.2 83.5 $ 79.2

Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:

Information for pension plans with benefit obligation in excess of plan assets is as follows:

(in millions) December 31, 2023 2022

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Accumulated benefit obligation $ 45.9 $ 3.0

Fair value of plan assets $ 404.5 $ 525.2

Components of net periodic (benefit) cost are as follows:

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Amortization of net loss (gain) — 0.6 1.5 ( 0.7 ) — —

Recognized curtailment (gain) loss ( 1.0 ) ( 1.3 ) ( 2.3 ) — — —

Settlement loss 12.1 1.4 1.7 — — —

Recognized curtailment gain ( 0.1 ) — ( 2.2 ) — — —

Settlement (gain) loss ( 0.3 ) — 0.1 — — —

Net periodic (benefit) cost $ ( 0.3 ) $ 0.1 $ ( 0.9 ) $ ( 0.9 ) $ ( 0.4 ) $ ( 0.3 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

The weighted average assumptions used to determine benefit obligations are as follows:

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For the year ended December 31, 2023 2022 2021 2023 2022 2021

Discount rate 5.43 % 2.89 % 2.62 % 5.40 % 2.70 % 2.30 %

Discount rate 4.02 % N/A N/A 5.00 % 5.40 % 2.70 %

Rate of compensation increase N/A N/A N/A N/A N/A N/A

Interest credit rate 3.62 % 1.47 % 0.93 % N/A N/A N/A

Interest credit rate 4.02 % N/A N/A N/A N/A N/A

Discount rate 2.57 % 3.17 % 1.02 % N/A N/A N/A

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For the year ended December 31, 2023 2022 2021 2023 2022 2021

Discount rate 2.89 % 2.62 % 3.34 % 2.70 % 2.30 % 3.20 %

Expected rate of return on plan assets 6.50 % 6.50 % 7.25 % N/A N/A N/A

Discount rate 5.43 % N/A N/A 5.40 % 2.70 % 2.30 %

Expected rate of return on plan assets N/A N/A N/A N/A N/A N/A

Rate of compensation increase N/A N/A N/A N/A N/A N/A

Interest credit rate 1.47 % 0.93 % 2.83 % N/A N/A N/A

Interest credit rate 3.62 % N/A N/A N/A N/A N/A

Discount rate 3.17 % 1.02 % 0.68 % N/A N/A N/A

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The discount rates used by us for valuing pension liabilities are based on a review of high-quality corporate bond yields with maturities approximating the remaining life of the projected benefit obligations.

plan, the 6.50 % expected rate of return on assets assumption for 2022 reflected a long-term target comprised of an asset allocation range of 25 %- 75 % equity securities, 15 %- 35 % fixed income securities, 10 %- 35 % alternative assets and 0 %- 10 % cash and cash equivalents.

As of December 31, 2022, the actual asset allocation for the U.S.

plan was 64.3 % equity securities, 22.1 % fixed income securities, 11.4 % alternative assets and 2.1 % cash and cash equivalents.

For the non-U.S.

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Year that the rate reaches the ultimate trend rate 2035 2033

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Assumed health care cost trend rates have a significant effect on the amounts reported for our health care plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our pension plan target allocations and weighted-average asset allocations by asset category are as follows:

Our pension plan target allocations and weighted-average asset allocations by asset category are as follows, along with the actual allocation related to the Dedicated Plans:

Target Allocation Actual Allocation

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Independent investment consultants are retained to assist in executing the plans’ investment strategies.

A number of factors are evaluated in determining if an investment strategy will be implemented in our pension trusts.

Several factors are evaluated in determining if an investment strategy will be implemented in our pension trusts.

These factors include, but are not limited to, investment style, investment risk, investment manager performance and costs.

We periodically review investment managers and their performance in relation to our plans’ investment objectives.

The primary investment objective of our various pension trusts is to maximize the value of plan assets, focusing on capital preservation, current income and long-term growth of capital and income.

The plans’ assets are typically invested in a broad range of equity securities, fixed income securities, alternative assets and cash instruments.

The primary investment objective of our various plan assets is to ensure that there are sufficient assets to pay benefits when they are due while mitigating associated risk and minimizing employer contributions.

The plans’ assets are typically invested in a broad range of equity securities, fixed income securities, insurance contracts, alternative assets and cash instruments.

Equity securities include investments in large, mid, and small-capitalization companies located in both developed countries and emerging markets around the world.

Fixed income securities include government bonds of various countries, corporate bonds that are primarily investment-grade, and mortgage-backed securities.

Alternative assets include investments in real estate and hedge funds employing a wide variety of strategies.

In 2021, equity securities included Crane Holdings, Co.

common stock, which represented 4 %of plan assets as of December 31, 2021.

There were no holdings of Crane Holdings, Co.

common stock in 2022.

Alternative assets include investments in real estate, insurance contracts and hedge funds employing a wide variety of strategies.

The fair value of our pension plan assets as of December 31, 2023, by asset category, are as follows:

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Cash Equivalents and Money Markets $ 0.5 $ — $ — $ — $ 0.5

Common Stocks

Actively Managed U.S.

Equities 31.8 — — — 31.8

Commingled and Mutual Funds

Equity Funds — — — 12.3 12.3

Equity Funds 74.3 — — 47.8 122.1

Fixed Income, Government and Corporate 88.9 — — — 88.9

Registered Investment Company 23.3 — — — 23.3

Collective Trust — — 19.4 20.7 40.1

Fixed Income, Government and Corporate — — — 22.4 22.4

International Balanced Funds — — — 1.8 1.8

Property Funds 21.7 — — — 21.7

Alternative Investments

Insurance / Annuity Contract(s) — 8.2 — — 8.2

Hedge Funds and LDI — — — 60.1 60.1

International Property Funds — — — 31.8 31.8

Total Fair Value $ 0.5 $ 8.2 $ 19.4 $ 55.4 83.5

(a) Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

In 2023, the pension plan's asset classified as Level 3 constitutes an insurance contract valued annually on an actuarial basis.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

The fair value of our pension plan assets as of December 31, 2022, by asset category, are as follows:

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Cash Equivalents and Money Markets $ 1.0 $ — $ — $ — $ 1.0

Common Stocks

Actively Managed U.S.

Equities 112.8 — — — 112.8

Commingled and Mutual Funds

Equity Funds — — — 10.0 10.0

Equity Funds 93.7 — — 139.3 233.0

Fixed Income, Government and Corporate 116.2 — — — 116.2

Registered Investment Company 34.0 — — — 34.0

Collective Trust — — 16.5 18.8 35.3

Fixed Income, Government and Corporate — — — 21.3 21.3

International Balanced Funds — — — 2.1 2.1

Property Funds 29.0 — — — 29.0

Alternative Investments

Insurance / Annuity Contract(s) — 10.8 — — 10.8

Hedge Funds and LDI — — — 64.0 64.0

International Property Funds — — — 0.8 0.8

Total Fair Value $ 1.0 $ 10.8 $ 16.5 $ 50.9 $ 79.2

(a) Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

Investments are measured at fair value using the net asset value per share practical expedient, and therefore, are not classified in the fair value hierarchy.

In 2022, the pension plan's asset classified as Level 3 constitutes an insurance contract valued annually on an actuarial basis.

We expect, based on current actuarial calculations, to contribute cash of approximately $ 2.0 million to our defined benefit pension plans during 2024.

Cash contributions in subsequent years will depend on a number of factors including the investment performance of plan assets.

Cash contributions in subsequent years will depend on several factors including the investment performance of plan assets for funded plans.

Estimated Future Benefit Payments

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2024 $ 3.6 $ 1.3

2024 52.0 2.2

2025 53.7 2.1

2026 53.7 1.9

2027 55.2 1.8

2029 to 2033 20.6 4.9

Total payments $ 38.3 $ 10.9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Executive Retirement Plan

We also have a non-qualified Supplemental Executive Retirement Plan (“SERP”).

The SERP, which is not funded, is intended to provide retirement benefits for certain executive officers who were formerly employees of Crane Currency.

The SERP, which is not funded, is intended to provide retirement benefits for certain executive officers who were formerly employees of Crane Currency prior to the acquisition of Crane Currency in 2018.

Benefit amounts are based upon years of service and compensation of the participating employees.

We recorded minimal pre-tax settlement gain in 2023.

We recorded a pre-tax settlement loss of $ 0.1 million in 2022.

There were no pre-tax settlement gains or losses recorded in 2021.

Accrued SERP benefits, which were recorded in Accrued liabilities and Accrued pension and postretirement benefits in the Consolidated Balance Sheets, were $ 2.2 million and $ 3.7 million as of December 31, 2022 and 2021, respectively.

Employer contributions made to the SERP, which were recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations, were $ 1.0 million, $ 0.2 million and $ 0.2 million in 2022, 2021 and 2020, respectively.

Accrued SERP benefits, which were recorded in Accrued liabilities and Accrued pension and postretirement benefits in the Consolidated and Combined Balance Sheets, were $ 1.7 million and $ 2.2 million as of December 31, 2023 and 2022, respectively.

Employer contributions made to the SERP were $ 0.7 million, $ 1.0 million and $ 0.2 million in 2023, 2022 and 2021, respectively.

Defined Contribution Plans

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We made non-matching contributions to these plans of $ 5.5 million, $ 5.1 million and $ 4.9 million in 2023, 2022 and 2021, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 7 – Stock-Based Compensation Plans

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 Consolidated and Combined 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.

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.

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 liability recorded upon Separation.

The amount of the liability was $ 1.9 million as of December 31, 2023.

At December 31, 2023, we had stock-based compensation awards outstanding under the following shareholder-approved plans:

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Options are granted under the Stock Incentive Plan to officers and other key employees and directors at an exercise price equal to the closing price on the date of grant.

Unless otherwise determined by the Compensation Committee which administers the plan, options become exercisable at a rate of 25 % after the first year, 50 % after the second year, 75 % after the third year and 100 % after the fourth year from the date of grant.

Unless otherwise determined by the Compensation Committee which administers the plan, options vest in four installments of 25 % per year over four years beginning on the first anniversary of the grant date.

All options granted to directors and options granted to officers and employees after 2014 expire 10 years after the date of grant.

We determine the fair value of each grant using the Black-Scholes option pricing model.

The weighted-average assumptions for grants made during the years ended December 31, 2022, 2021 and 2020 are as follows:

Prior to the Separation, Holdings determined the fair value of each grant using the Black-Scholes option pricing model.

The weighted-average assumptions for grants made by Holdings during the years ended December 31, 2023, 2022 and 2021 are as follows:

2023 2022 2021

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Expected lives in years 7.7 7.2 5.2

Expected dividend yield is based on our dividend rate.

Expected dividend yield is based on Holdings’ dividend rate.

Expected stock volatility was determined based upon the historical volatility for the four-year period preceding the date of grant.

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The expected lives of the awards represent the period of time that options granted are expected to be outstanding.

Activity in our stock option plans for the year ended December 31, 2022 were as follows:

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Activity in Crane NXT’s stock option plans for the year ended December 31, 2023 were as follows:

Option Activity Number of

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Exercise Price Weighted

Life (Years) Aggregate Intrinsic Value (in millions) (a)

Options outstanding as of January 1, 2023 — $ —

Granted 115 101.72

Converted in Distribution (b)

Exercised ( 49 ) 28.11

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Options exercisable as of December 31, 2023 230 $ 26.81 4.97 $ 6.9

Included in our share-based compensation was expense recognized for our stock option awards of $ 5.1 million, $ 6.2 million and $ 6.6 million in 2022, 2021 and 2020, respectively.

The weighted-average fair value of options granted during 2022, 2021 and 2020 was $ 32.51 , $ 20.82 and $ 15.18 , respectively.

The total fair value of shares vested during 2022, 2021 and 2020 was $ 5.6 million, $ 6.3 million and $ 6.2 million, respectively.

The total intrinsic value of options exercised during 2022, 2021 and 2020 was $ 11.8 million, $ 36.4 million and $ 4.1 million, respectively.

The aggregate intrinsic value of exercisable options was $ 26.5 million, $ 33.9 million and $ 29.5 million

as of December 31, 2022, 2021 and 2020, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The total cash received from these option exercises during 2022, 2021 and 2020 was $ 22.8 million, $ 26.4 million and $ 8.9 million, respectively.

(a) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for in the money options at December 31, 2023.

(b) Excludes 611,932 of options issued to SpinCo employees.

Included in our stock-based compensation was expense recognized for our stock option awards of $ 4.8 million for the year ended December 31, 2023.

For the years ended December 31, 2022 and 2021, $ 1.9 million and $ 2.0 million, respectively, were allocated to the Company.

The total net cash received from these option exercises during 2023 was $ 4.4 million and is reflected in the Consolidated and Combined Statement of Cash Flows as “Stock options exercised, net of shares reacquired” within financing activities.

The total cash received from option exercises during 2022 and 2021 was $ 1.6 million and $ 1.5 million, respectively, and is reflected in the Consolidated and Combined Statements of Cash Flows as “Net transfers to Crane” within financing activities.

The tax benefit realized for the tax deductions from these option exercises was $ 0.4 million, $ 0.3 million and $ 1.8 million as of December 31, 2023, 2022 and 2021, respectively.

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Restricted Share Units and Performance-Based Restricted Share Units

Restricted share units vest at a rate of 25 % after the first year, 50 % after the second year, 75 % after the third year and 100 % after the fourth year from the date of grant and are subject to forfeiture restrictions which lapse over time.

The vesting of performance-based restricted share units is determined in three years based on relative total shareholder return for Crane Holdings, Co.

compared to the S&P Midcap 400 Capital Goods Group, with payout potential ranging from 0 % to 200 % but capped at 100 % if our three year total shareholder return is negative.

Included in our share-based compensation was expense recognized for our restricted share unit and performance-based restricted share unit awards of $ 19.1 million, $ 18.7 million and $ 15.7 million in 2022, 2021 and 2020, respectively.

The tax benefit (detriment) for the vesting of the restricted share units was $ 1.2 million, $( 0.1 ) million and $( 0.1 ) million as of December 31, 2022, 2021 and 2020, respectively.

Restricted share units vest in four installments of 25 % per year over four years beginning on the first anniversary of the grant date and are subject to forfeiture restrictions which lapse over time.

The vesting of performance-based restricted share units is determined based on relative total shareholder return for Crane NXT, Co.

compared to the S&P Midcap 400 Capital Goods Group over a three year period, with payout potential ranging from 0 % to 200 % but capped at 100 % if our three year total shareholder return is negative.

Included in our stock-based compensation was expense recognized for our restricted share unit and performance-based restricted share unit awards of $ 5.5 million.

For the years ended December 31, 2022 and 2021, $ 7.4 million and $ 6.6 million, respectively, were allocated to the Company.

The tax benefit for the vesting of the restricted share units was $ 0.5 million, $ 0.5 million and $ 0.1 million as of December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 10.2 million of total future compensation cost related to restricted share unit and performance-based restricted share unit awards, to be recognized over a weighted-average period of 2.08 years.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Changes in our restricted share units for the year ended December 31, 2023 were as follows:

2 unchanged sentences

Restricted share units as of January 1, 2023 — $ —

Restricted share units converted in Distribution (a)

Restricted share units granted 36 49.24

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Restricted share units as of December 31, 2023 412 $ 40.18

(a) Excludes 190,900 of restricted shares units issued to SpinCo employees.

Note 8 - Leases

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Therefore, these options generally do not impact the lease term or the determination or classification of the right-of-use asset and lease liability.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the third quarter of 2017, we entered a seven-year lease for a used airplane which includes a maximum residual value guarantee of $ 11.1 million if the fair value of the airplane is less than $ 14.4 million at the end of the lease term.

We do not believe it is probable that any amount will be owed under this guarantee.

Therefore, no amount related to the residual value guarantee is included in the lease payments used to measure the right-of-use asset and lease liability.

We have not entered any other leases where a residual value guarantee is provided to the lessor.

We do not enter arrangements where restrictions or covenants are imposed by the lessor that, for example, relate to incurring additional financial obligations.

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The rate implicit in the lease is generally unknown, as we generally operate in the capacity of the lessee.

Our Consolidated Balance Sheet includes the following related to leases:

Our Consolidated and Combined Balance Sheets include the following related to leases:

(in millions) December 31, Classification 2023 2022

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The components of lease cost were as follows:

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(in millions) December 31, 2023 2022 2021

4 unchanged sentences

December 31, 2023 2022

Weighted-average remaining lease term - operating leases 11.4 9.4

Weighted-average remaining lease term (in years) - operating leases 16.3 17.9

Weighted-average discount rate - operating leases 5.0 % 4.5 %

9 unchanged sentences

Present value of lease liabilities reported $ 49.8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 9 – Income Taxes

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Total deferred ( 2.1 ) ( 28.4 ) 8.2

Total provision for income taxes * $ 161.9 $ 67.4 $ 43.4

* Included in the above amounts are excess tax benefits from share-based compensation of $ 3.0 million $ 5.5 million and $ 0.6 million in 2022, 2021 and 2020, respectively, which were reflected as reductions in our provision for income taxes in 2022, 2021 and 2020.

Total provision for income taxes (a)

$ 51.5 $ 43.4 $ 48.1

(a) Included in the above amounts are excess tax benefits from share-based compensation of $ 0.9 million, $ 0.8 million and $ 1.9 million in 2023, 2022 and 2021, respectively, which were reflected as reductions in our provision for income taxes in 2023, 2022 and 2021.

A reconciliation of the statutory U.S.

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deduction for foreign - derived intangible income ( 0.8 ) % ( 1.0 ) % ( 0.2 ) %

Deferred tax asset related to the sale of a subsidiary 3.7 % ( 4.1 ) % — %

Nondeductible loss due to Asbestos Divestiture 6.4 % — % — %

Other 1.0 % ( 1.0 ) % ( 1.1 ) %

Effective tax rate 21.5 % 17.5 % 21.2 %

The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon by over 140 member jurisdictions including the United States.

Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions.

We are currently assessing the impact of this minimum tax on our business.

As of December 31, 2023, we have made the following determinations with regard to our non-U.S.

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Amount of earnings $ 179.0 $ 148.5

Associated tax NA * $ 15.3

* Determination of U.S.

Associated tax N/A (a)

(a) Determination of U.S.

income taxes and non-U.S.

withholding taxes due upon repatriation of this $ 179.0 million of earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Tax Related to Comprehensive Income

During 2022, 2021 and 2020, tax provision (benefit) of $ 12.7 million, $ 29.9 million and $( 13.5 ) million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other comprehensive loss.

During 2023, 2022 and 2021, tax provision of $ 0.5 million, $ 2.8 million and $ 0.7 million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other comprehensive loss.

Deferred Taxes and Valuation Allowances

The components of deferred tax assets and liabilities included in our Consolidated Balance Sheets are as follows:

The components of deferred tax assets and liabilities included in our Consolidated and Combined Balance Sheets are as follows:

(in millions) December 31, 2023 2022

Deferred tax assets:

Asbestos-related liabilities $ — $ 138.9

Tax loss and credit carryforwards $ 48.4 $ 23.7

Inventories 8.5 9.1

Deferred tax asset related to the sale of a subsidiary — 20.6

Capitalized Research and Development 9.0 6.8

Pension and Post Retirement Benefits 8.4 24.1

Accrued Bonuses and Stock Based Compensation 1.1 1.8

Pension and Post Retirement Benefits 2.4 1.6

Other 12.5 11.5

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Deferred tax liabilities:

Basis difference in fixed assets $ ( 39.3 ) $ ( 47.4 )

Basis difference in intangible assets $ ( 108.8 ) $ ( 119.1 )

Deferred Tax on Non-U.S.

Unremitted Earnings ( 15.3 ) ( 14.3 )

Basis difference in fixed assets ( 28.2 ) ( 19.1 )

Other ( 0.3 ) ( 0.2 )

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Net deferred tax asset (liability) $ ( 101.8 ) $ ( 103.2 )

Our total valuation allowance as of December 31, 2023 and 2022 was $ 46.4 million and $ 19.3 million, respectively.

The change in valuation allowance primarily resulted from the transfer of state net operating losses and associated valuation allowances from SpinCo to the Company as a result of the Separation.

As of December 31, 2023, we had U.S.

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As a result, we recorded a valuation allowance against these deferred tax assets.

We also determined that it is more likely than not that a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

portion of the benefit related to U.S.

We also determined that it is more likely than not that a portion of the benefit related to U.S.

state and non-U.S.

deferred tax assets other than tax loss and credit carryforwards will not be realized.

Accordingly, as of December 31, 2022 and 2021, a valuation allowance of $ 8.3 million and $ 35.1 million, respectively, was established against these U.S.

Accordingly, as of December 31, 2023 and 2022, a valuation allowance of $ 0.0 million and $ 6.0 million, respectively, was

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

established against these U.S.

state and non-U.S.

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Reduction as a result of a lapse of the statute of limitations ( 5.2 ) ( 3.1 ) ( 0.5 )

Other 13.9 — —

Balance of liability as of December 31, $ 16.5 $ 7.6 $ 10.3

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The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes.

As of December 31, 2023, the Company has recorded a gross unrecognized tax benefit of $ 13.9 million due to the Separation from SpinCo which is included in the above table as “Other.” This reflects SpinCo’s share of gross unrecognized tax benefit for pre-Separation periods when SpinCo’s operations were included in the Company’s consolidated tax returns.

The Company has also recorded an indemnification receivable of $ 7.1 million from SpinCo per the terms of the Tax Matters Agreement described in Note 1, “Nature of Operations and Significant Accounting Policies.”

We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense.

During the years ended December 31, 2022, 2021 and 2020, we recognized interest and penalty (income)/ expense of $( 0.1 ) million, $( 2.6 ) million and $ 0.5 million, respectively, in our Consolidated Statements of Operations.

As of December 31, 2022 and 2021, we had accrued $ 4.8 million and $ 4.9 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets.

During the years ended December 31, 2023, 2022 and 2021, we recognized interest and penalty (income) of $( 0.1 ) million, $( 0.4 ) million and $( 2.5 ) million, respectively, in our Consolidated and Combined Statements of Operations.

As of December 31, 2023 and 2022, we had accrued $ 2.8 million and $ 1.2 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated and Combined Balance Sheets.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $ 9.4 million due to settlements of income tax examinations, the expiration of statutes of limitations or other resolution of uncertainties.

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tax authorities.

With few exceptions, the years for which we filed returns that are open to examination are as follows:

With few exceptions, the years open to examinations are as follows:

Jurisdiction Year

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state and local 2017 - 2022

Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2016 through 2019), Canada (2013 through 2018) and Luxembourg (2017 through 2018).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Currently, we and our subsidiaries are under examination in various jurisdictions.

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

As of December 31, 2023, we had an accrued income tax liability of $ 12.8 million included in “U.S.

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

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 10 – Accrued Liabilities

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Employee related expenses $ 62.3 $ 56.3

Warranty 7.4 8.6

Current lease liabilities 19.0 22.7

Contract liabilities 92.5 93.6

Current lease liabilities 7.2 7.4

Accrued interest 6.3 6.5

Warranty 5.6 4.4

Other 36.6 36.0

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We accrue warranty liabilities when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Warranty provision is included in "Cost of sales" in our Consolidated Statements of Operations.

Warranty provision is included in "Cost of sales" in our Consolidated and Combined Statements of Operations.

Note 11 – Other Liabilities

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(in millions) December 31, 2023 2022

Environmental $ 17.6 $ 25.8

Long-term lease liabilities $ 42.6 $ 29.0

Accrued taxes 19.3 8.1

Other 1.8 1.4

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Note 12 - Commitments and Contingencies

Asbestos Liability

On August 12, 2022, Crane Holdings, Co., Crane Company, a wholly-owned subsidiary of Crane Holdings, Co., and Redco, then a wholly-owned subsidiary of Crane Company that held liabilities including asbestos liabilities and related insurance assets, entered into the Redco Purchase Agreement with Redco Buyer, an unrelated third party and long-term liability management company specializing in the acquisition and management of legacy corporate liabilities, whereby Crane Company transferred to Redco Buyer all of the issued and outstanding shares of Redco.

Concurrent with the completion of the Redco Sale, Redco Buyer contributed $ 83 million in cash to Redco.

Pursuant to the terms of the Redco Purchase Agreement, Crane Company and Redco Buyer will each indemnify the other for breaches of representations and warranties, breaches of covenants and obligations and certain liabilities, subject to the terms of the Redco Purchase Agreement.

While indemnification by each of Crane Company and Redco Buyer to the other party for breach of representations and warranties is capped at $ 83 million, in each case, based on the terms and subject to certain limitations as set forth in the Redco Purchase Agreement, liability of each of Crane Company and Redco Buyer for breaches of covenants and obligations and for indemnified liabilities is generally uncapped.

Such covenants and obligations include that Redco has agreed to indemnify Crane Company and its affiliates for all claims arising out of asbestos liabilities, and Crane Company has agreed to indemnify Redco and its affiliates for all other historical liabilities of Redco, which include certain potential environmental liabilities.

Crane Holdings, Co.

has guaranteed the full payment and performance of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

Upon consummation of the previously announced separation transaction pursuant to which, among other things, all outstanding shares of Crane Company will be distributed to Crane Holdings, Co.’s stockholders, Crane Holdings, Co.

will be released from its guarantee of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

As a result of the Redco Sale, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets of Redco have been removed from Crane Holdings, Co.’s consolidated balance sheets effective August 12, 2022 and the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company no longer has any obligation with respect to pending and future asbestos claims.

As such, Redco has been deconsolidated from our 2022 financial results, as we no longer maintain control of the entity.

Therefore, for the year ended December 31, 2022, all asbestos obligations and liabilities, related insurance assets and associated deferred tax assets of Redco are no longer reported on the consolidated balance sheet.

The Company recorded a loss on the divestiture of asbestos-related assets and liabilities of $ 162.4 million in the third quarter of 2022, including transaction expenses of $ 13.5 million.

The following is a summary of the loss on divestiture of asbestos-related assets and liabilities:

(in millions)

Cash $ ( 550.0 )

Current insurance receivable ( 13.8 )

Long-term insurance receivable ( 49.4 )

Deferred tax asset ( 107.9 )

Current asbestos liability 62.5

Long-term asbestos liability 509.7

Loss on divestiture of asbestos-related assets and liabilities, before transaction costs ( 148.9 )

Transaction costs ( 13.5 )

Loss on divestiture of asbestos-related assets and liabilities $ ( 162.4 )

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the years ended December 31, 2022, 2021 and 2020 totaled $ 35.8 million, $ 55.2 million and $ 50.9 million, respectively.

Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the years ended December 31, 2022, 2021 and 2020 totaled $ 29.3 million, $ 44.9 million and $ 31.1 million, respectively.

Detailed below are the comparable amounts for the periods indicated.

(in millions)

For the year ended December 31, 2022 2021 2020

Settlement / indemnity costs incurred (a)

$ 29.4 $ 40.6 $ 35.3

Defense costs incurred (a)

6.4 14.6 15.6

Total costs incurred $ 35.8 $ 55.2 $ 50.9

Settlement / indemnity payments $ 33.8 $ 42.6 $ 24.7

Defense payments 6.1 15.4 16.7

Insurance receipts ( 10.6 ) ( 13.1 ) ( 10.3 )

Pre-tax cash payments, net $ 29.3 $ 44.9 $ 31.1

(a) Before insurance recoveries and tax effects.

Other Contingencies

Environmental Matters

For environmental matters, we record a liability for estimated remediation costs when it is probable that we will be responsible for such costs and they can be reasonably estimated.

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

The environmental remediation liability as of December 31, 2022 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.

Pursuant to the terms of the Redco Purchase Agreement (referenced above), Crane Company and Redco Buyer will each indemnify the other for breaches of representations and warranties, breaches of covenants and obligations and certain liabilities, subject to the terms of the Redco Purchase Agreement.

Such covenants and obligations include that Crane Company has agreed to indemnify Redco and its affiliates for all other historical liabilities of Redco, which include certain potential environmental liabilities.

Crane Holdings, Co.

has guaranteed the full payment and performance of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

Upon consummation of the previously announced

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

separation transaction pursuant to which, among other things, all outstanding shares of Crane Company will be distributed to Crane Holdings, Co.’s stockholders, Crane Holdings, Co.

will be released from its guarantee of Crane Company’s indemnification obligations under the Redco Purchase Agreement.

Prior to the effective date of the Redco Sale, the U.S.

Department of Justice agreed that Crane Holdings, Co.

and ultimately Crane Company following the above-referenced separation transaction, will be primarily liable for the Goodyear Site.

The New Jersey Department of Environmental Protection agreed to transfer the liability of the Roseland Site to Crane Holdings, Co., and a further transfer of this environmental liability to Crane Company upon effectiveness of the separation transaction is expected.

The potential liability for the Crab Orchard Site referenced below remains a direct obligation of Redco.

As noted above, however, Crane Company, and Crane Holdings, Co.

(as guarantor until the time of the separation transaction), have agreed to indemnify Redco Buyer against the Goodyear, Roseland, and Crab Orchard environmental liabilities.

Thus, references below to “we”, and “us” refer to Crane Holdings, Co.

in its capacity as the primarily responsible party for the Goodyear and Roseland Sites, and as indemnitor to the Redco Buyer on the Crab Orchard Site.

Goodyear Site

The Goodyear Site was operated by Unidynamics/Phoenix, Inc.

(“UPI”), which became an indirect subsidiary in 1985 when Crane Co.

(n/k/a Redco) acquired UPI’s parent company, UniDynamics Corporation.

UPI is now an indirect subsidiary of Crane Holdings, Co.

and will become an indirect subsidiary of Crane Company following the separation transaction.

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

Government at the Goodyear Site from 1962 to 1993, under contracts with the U.S.

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 conduct certain remedial actions, which UPI has done.

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

On July 26, 2006, we entered a consent decree with the EPA with respect to the Goodyear Site providing for, among other things, a work plan for further investigation and remediation activities (inclusive of a supplemental remediation investigation and feasibility study).

During the third quarter of 2014, the EPA issued a Record of Decision (“ROD”) amendment permitting, among other things, additional source area remediation resulting in us recording a charge of $ 49.0 million, extending the accrued costs through 2022.

Following the 2014 ROD amendment, we continued our remediation activities and explored an alternative strategy to accelerate remediation of the site.

During the fourth quarter of 2019, we received conceptual agreement from the EPA on our alternative remediation strategy which is expected to further reduce the contaminant plume.

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 $ 24.8 million and $ 32.3 million as of December 31, 2022 and 2021, respectively and as described below, a portion is reimbursable by the U.S.

The current portion of the total estimated liability was $ 7.7 million and $ 7.1 million as of December 31, 2022 and 2021, respectively, 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.

On July 31, 2006, we entered into a consent decree with the U.S.

Department of Justice on behalf of the Department of Defense and the Department of Energy pursuant to which, among other things, the U.S.

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

As of December 31, 2022 and 2021, we recorded a receivable of $ 4.8 million and $ 7.3 million, respectively, for the expected reimbursements from the U.S.

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

The receivable is reduced as reimbursements and other payments from the U.S.

Government are received.

Other Environmental Matters

Roseland, NJ Site

The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary in 1985 when Crane Co.

(n/k/a Redco) 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.

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 in certain buildings, all in accordance with the New Jersey Department of Environmental Protection guidelines and directives.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Marion, IL Site

(n/k/a Redco) has been identified as a potentially responsible party (“PRP”) with respect to environmental contamination at the Crab Orchard National Wildlife Refuge Superfund Site (the “Crab Orchard Site”).

The Crab Orchard Site is located near Marion, Illinois, and consists of approximately 55,000 acres.

Beginning in 1941, the United States used the Crab Orchard Site for the production of ordnance and other related products for use in World War II.

In 1947, about half of the Crab Orchard Site was leased to a variety of industrial tenants whose activities (which continue to this day) included manufacturing ordnance and explosives.

Unidynamics Corporation formerly leased portions of the Crab Orchard Site and conducted manufacturing operations at the Crab Orchard Site from 1952 until 1964.

General Dynamics Ordnance and Tactical Systems, Inc.

(“GD-OTS”) is in the process of conducting a remedial investigation and feasibility study for a portion of the Crab Orchard Site (the “AUS-OU”), which includes an area where we maintained operations, pursuant to an Administrative Order on Consent.

A remedial investigation report was approved in February 2015, and work on the feasibility study is underway.

It is unclear when the final feasibility study will be completed, or when a final Record of Decision may be issued.

As noted above, we have agreed to indemnify Redco Buyer against the Crab Orchard environmental liabilities, and accordingly we act as Redco’s agent with respect to such liabilities.

GD-OTS asked Crane Co.

(n/k/a Redco) to participate in a voluntary, multi-party mediation exercise with respect to response costs that GD-OTS has incurred or will incur with respect to the AUS-OU, and Crane Co.

(n/k/a Redco), the U.S.

Government, and other PRPs entered into a non-binding mediation agreement in 2015.

We have stepped into Redco’s position as a participant in the mediation.

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

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

We, as indemnitor, have also agreed to pay a modest percentage of future RI-FS costs and the United States’ claimed past response costs relative to the first-phase areas, a sum that has proven to be and we expect to continue to be, in the aggregate, an immaterial amount.

We understand that GD-OTS has also reached agreements with the U.S.

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

Negotiations between GD-OTS, the U.S.

Government and remaining participants are underway with respect to resolution of the U.S.

Government’s liability for, and contribution claims with respect to, the remaining areas of the site, including those portions of the Crab Orchard Site where Redco’s predecessor conducted manufacturing and research activities.

The participants have reached agreement in principle on a framework for resolving the U.S.

Government’s share of response costs, subject to consummation of a mutually-agreeable consent decree, but we at present cannot predict whether or when these negotiations will result in a definitive agreement, or when any determination of the ultimate allocable shares of GD-OTS and U.S.

Government response costs for which we may be liable 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.

Insurers with contractual coverage obligations for this site have been notified of this potential liability and have been providing defense and indemnity coverage, subject to reservations of rights.

Other Proceedings

We regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters.

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If there is a reasonable possibility that a loss or additional loss may have been incurred for such matters, we disclose the estimate of the amount of loss or range of loss, disclose that the amount is immaterial, or disclose that an estimate of loss cannot be made, as applicable.

We believe that as of December 31, 2022 2021 and 2020, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters, and that adequate provision has been made in our financial statements for the potential impact of all such matters.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We believe that as of December 31, 2023, 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 Consolidated and Combined Financial Statements for the potential impact of all such matters.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Note 13 – Financing

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(in millions) December 31, 2023 2022

364 -Day Credit Agreement

4.45 % notes due December 2023

Total short-term borrowings $ 699.3 $ —

Term Facility $ 4.6 $ —

4.45 % notes due December 2023

Total short-term borrowings (a)

$ 4.6 $ 299.7

Term Facility $ 98.5 $ —

6.55 % notes due November 2036

1 unchanged sentence

Other deferred financing costs associated with credit facilities ( 3.4 ) —

Total long-term debt $ 543.7 $ 842.4

Debt discounts and debt issuance costs totaled $ 5.6 million and $ 5.7 million as of December 31, 2022 and 2021, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

364-Day Credit Agreement - On August 11, 2022, the Company entered a new senior unsecured 364 -day credit facility (the “ 364 -Day Credit Agreement”) under which it borrowed term loans denominated in U.S.

dollars (the “Term Loans”) in an aggregate principal amount of $ 400 million.

Interest on the Term Loans accrues at a rate per annum equal to, at the Company’s option, (a) a base rate (determined in a customary manner), plus a margin of 0.25 % or 0.50 % that is determined based upon the ratings by S&P and Moody’s of the Company’s senior unsecured long-term debt (the “Index Debt Rating”) or (b) an adjusted Term SOFR (determined in a customary manner) for an interest period to be selected by the Company, plus a margin of 1.25 % or 1.50 % that is determined based upon the Index Debt Rating.

The 364 -Day Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type.

Commercial paper program - On July 28, 2021, we increased the size of the commercial paper program (“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.

We may issue short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

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.

The notes rank at least pari passu with all of our other unsecured and unsubordinated indebtedness.

As of December 31, 2022 and 2021, there was no outstanding borrowings, respectively.

Total long-term debt (a)

$ 640.3 $ 545.1

(a ) Debt discounts and debt issuance costs totaled $ 10.1 million and $ 5.6 million as of December 31, 2023 and 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 - In December 2013, we issued 10 year notes having an aggregate principal amount of $ 300 million.

The notes are unsecured, senior obligations that mature on December 15, 2023 and bear interest at 4.45 % per annum, payable semi-annually on June 15 and December 15 of each year.

The notes are unsecured, senior obligations that matured on December 15, 2023 and bear interest at 4.45 % per annum, payable semi-annually on June 15 and December 15 of each year.

The notes have no sinking fund requirement, but may be redeemed, in whole or part, at our option.

5 unchanged sentences

The indentures contain certain restrictions, including a limitation that restricts our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness, enter into certain sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

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, 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.

During the year ended December 31, 2023, we repaid $ 245.0 million 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.

Borrowings under the Term Facility are prepayable without premium or penalty, subject to customary reimbursement of breakage costs.

Interest on loans advanced under the Credit Agreement accrues, at our option, at a rate per annum equal to (1) adjusted term Secured Overnight Financing Rate (SOFR) plus a credit spread adjustment of 0.10 % for the applicable interest period plus a margin ranging from 1.50 % to 2.25 % or (2) a base rate plus a margin ranging from 0.50 % to 1.25 %, in each case, with such margin determined based on the lower of the ratings of our senior, unsecured long-term debt (the “Ratings”) and our total net leverage ratio.

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 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

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

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.

6.55 % notes due November 2036 - In November 2006, we issued 30 year notes having an aggregate principal amount of $ 200 million.

The notes are unsecured, senior obligations of us that mature on November 15, 2036 and bear interest at 6.55 % per annum, payable semi-annually on May 15 and November 15 of each year.

The notes have no sinking fund requirement, but may be redeemed, in whole or in part, at the option of us.

The notes have no sinking fund requirement, but may be redeemed, in whole or in part, at our option.

These notes do not contain any material debt covenants or cross default provisions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

repurchase them, in whole or in part, for 101 % of the principal amount plus accrued and unpaid interest.

If there is a change in control of the Company, and if as a consequence, the notes are rated below investment grade by both Moody’s Investors Service and Standard & Poor’s, then holders of the notes may require us to repurchase them, in whole or in part, for 101 % of the principal amount plus accrued and unpaid interest.

Debt issuance costs are deferred and included in long-term debt and are amortized as a component of interest expense over the term of the notes.

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Other - As of December 31, 2022, we had open standby letters of credit of $ 66.8 million issued pursuant to a $ 170.3 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.

As of December 31, 2021, we had open standby letters of credit of $ 49.5 million issued pursuant to a $ 162.7 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.

Revolving Credit Facility - On July 28, 2021, we entered into a $ 650 million, 5 -year Revolving Credit Agreement (the “2021 Facility”), which replaced the $ 550 million revolving credit facility that we had entered into in December 2017.

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.

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

As of December 31, 2022 and 2021, there were no outstanding borrowings.

Other – As of December 31, 2023, we had open standby letters of credit on our behalf of $ 69.7 million issued pursuant to a $ 190.7 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.

As of December 31, 2022, we had open standby letters of credit on our behalf of $ 57.1 million issued pursuant to a $ 153.2 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.

As of December 31, 2023, our total debt to total capitalization ratio was 40.1 %, computed as follows:

(in millions)

Short-term borrowings $ 4.6

Long-term debt 640.3

Total debt $ 644.9

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Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability.

The standards also establish a fair value

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standards also establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standards describe three levels of inputs that may be used to measure fair value:

1 unchanged sentence

Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.

Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models with inputs that are generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models with inputs that are

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data.

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Valuation Technique

The carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable, commercial paper and accounts payable approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.

The carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding.

We are exposed to certain risks related to our ongoing business operations, including market risks related to fluctuation in currency exchange.

1 unchanged sentence

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

Foreign exchange contracts not designated as hedging instruments had a notional value of $ 89.7 million and $ 3.0 million as of December 31, 2022 and 2021, respectively.

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

We had no such hedging instruments as of December 31, 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.

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 Consolidated Balance Sheets and were $ 5.9 million and $ 0.0 million as of the years ended December 31, 2022 and 2021, respectively.

Such derivative liability amounts are recorded within “Accrued liabilities” on our Consolidated Balance Sheets and there were no derivative liabilities for the years ended December 31, 2022 and 2021, respectively.

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

We had no such derivative receivables as of December 31, 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.

The fair value of available-for-sale securities was $ 0.4 million and $ 1.6 million as of December 31, 2022 and 2021, respectively.

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

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 Consolidated and Combined Balance Sheets.

We had no such fair value of available-for-sale securities as of December 31, 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 long-term debt is measured using Level 2 inputs and was $ 469.5 million and $ 753.1 million as of December 31, 2023 and 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 15 – Restructuring

2022 Repositioning - In the fourth quarter of 2022, in response to economic uncertainty, we initiated modest workforce reductions of approximately 300 employees, or about 3 % of our global workforce.

We expect to complete the program in the fourth quarter of 2023.

We recorded a charge of $ 14.4 million for the year ended December 31, 2022.

2020 Repositioning - In the second quarter of 2020, we initiated actions in response to the adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition.

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 in the U.S.

with foreign jurisdictions extending through the end of 2026.

We recorded a charge of $ 0.5 million and $ 6.2 million for the years ended December 31, 2023 and 2022, respectively.

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

2020 Restructuring - In the second quarter of 2020, we initiated actions in response to the adverse economic impact of COVID-19 pandemic and integration actions related to the Cummins-Allison acquisition.

These actions include workforce reductions of approximately 600 employees, or about 15 % of our global workforce, and the exiting of two leased office facilities and one leased warehouse facility.

We have completed this program and do not expect to incur additional restructuring charges.

We recorded restructuring gain of $ 3.7 million for the year ended December 31, 2021.

We recorded a charge of $ 32.1 million for the year ended December 31, 2020.

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.

These actions, taken together, included workforce reductions of approximately 180 employees, or less than 1 % of our global workforce.

We expect to complete the program in the fourth quarter of 2023.

We recorded a gain of $ 4.0 million in 2022.

We recorded charges of $ 0.1 million and $ 6.1 million for the years ended December 31, 2021 and 2020, respectively.

2017 Repositioning - In the fourth quarter of 2017, we initiated broad-based repositioning actions designed to improve profitability.

We completed the program in 2022.

2017 Restructuring - In the fourth quarter of 2017, we initiated broad-based restructuring actions designed to improve profitability.

These actions included headcount reductions of approximately 70 employees, or about 2 % of our global workforce, and select facility consolidations in North America and Europe.

1 unchanged sentence

In 2021, we recorded a gain on sale of real estate related to these actions.

We completed the program and do not expect to incur additional restructuring charges.

We recorded a restructuring gain of $ 13.3 million and $ 6.2 million for the years ended December 31, 2021 and 2020 respectively.

Other Restructuring - In the second quarter of 2020, we recorded other restructuring costs within our Payment & Merchandising Technologies segment.

We do not expect to incur additional restructuring charges.

We completed the program in the first quarter of 2022.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Restructuring Charges (Gains), Net

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

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

(in millions) For the year ended December 31, 2023 2022 2021

Aerospace & Electronics

$ 1.5 $ — $ 6.5

Process Flow Technologies 2.3 ( 13.2 ) 6.1

Payment & Merchandising Technologies 6.2 ( 3.7 ) 19.1

Engineering Materials 0.4 — 0.6

Crane Payment Innovations $ 0.5 $ 6.2 $ ( 0.9 )

Crane Currency — — ( 2.8 )

Total restructuring charges (gains), net $ 0.5 $ 6.2 $ ( 3.7 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our restructuring charges (gains) by program, cost type and segment for the years ended December 31, 2022, 2021 and 2020:

December 31, 2022 December 31, 2021 December 31, 2020

The following table summarizes our restructuring charges (gains), net by program, cost type and segment for the years ended December 31, 2023, 2022 and 2021:

For the years ended December 31, 2023 2022 2021

(in millions) Severance Other Total Severance Other Total Severance Other Total

Aerospace & Electronics $ 1.5 $ — $ 1.5 $ — $ — $ — $ — $ — $ —

Process Flow Technologies 6.3 $ — 6.3 — — — — — —

Payment & Merchandising Technologies 5.7 $ 0.5 6.2 — — — — — —

Engineered Materials 0.4 $ — 0.4 — — — — — —

2022 Repositioning 13.9 0.5 14.4 —

Aerospace & Electronics $ — $ — $ — $ — $ — $ — $ 6.5 $ — $ 6.5

Process Flow Technologies — — — ( 0.1 ) (a)

— ( 0.1 ) 3.8 — 3.8

Payment & Merchandising Technologies — — — ( 0.8 ) (a)

( 2.8 ) ( 3.6 ) 16.6 4.6 (b)

Engineered Materials — — — — — — 0.6 — 0.6

2020 Repositioning — — — ( 0.9 ) (a)

Crane Payment Innovations $ 0.1 $ 0.4 $ 0.5 $ 5.7 $ 0.5 $ 6.2 $ — $ — $ —

2022 Restructuring 0.1 0.4 0.5 5.7

0.5 6.2 — — —

Process Flow Technologies $ ( 1.2 ) (a)

$ ( 2.8 ) (c)

Crane Payment Innovations $ — $ — $ — $ — $ — $ — $ ( 0.8 ) (a)

$ — $ ( 0.8 )

2019 Repositioning ( 1.2 ) (a)

Crane Currency — — — — — — — ( 2.8 ) ( 2.8 )

2020 Restructuring — — — — — — ( 0.8 ) (a)

( 2.8 ) ( 3.6 )

Process Flow Technologies $ — $ — $ — $ ( 0.4 ) (a)

$ ( 12.7 ) (c)

Crane Payment Innovations $ — $ — $ — $ — $ — $ — $ ( 0.2 ) (a)

$ — $ ( 0.2 )

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

— ( 0.2 ) ( 0.9 ) ( 1.5 ) (c)

2017 Repositioning — — — ( 0.6 ) (a)

( 13.3 ) ( 4.7 ) ( 1.5 ) (c)

Payment & Merchandising Technologies $ — $ — $ — $ — $ — $ — $ 0.3 $ — $ 0.3

Other Restructuring — — — — — — 0.3 — 0.3

2017 Restructuring — — — — — — ( 0.2 ) (a)

Total $ 0.1 $ 0.4 $ 0.5 $ 5.7 $ 0.5 $ 6.2 $ ( 1.0 ) $ ( 2.8 ) $ ( 3.8 )

(a) Reflects changes in estimates for increases and decreases in costs related to our restructuring programs.

(b) Primarily reflects non-cash charges related to the impairment of ROU assets and leasehold improvements associated with the exit of the three leased facilities in 2020.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the cumulative restructuring costs incurred through December 31, 2022.

We do not expect to incur additional facility consolidation costs to complete these actions as of December 31, 2022.

Cumulative Restructuring Costs

The following table summarizes the cumulative restructuring charges incurred through December 31, 2023.

Cumulative Restructuring Charges

(in millions) Severance Other Total

Aerospace & Electronics $ 1.5 $ — $ 1.5

Process Flow Technologies 6.3 — 6.3

Payment & Merchandising Technologies 5.7 0.5 6.2

Engineered Materials 0.4 — 0.4

2022 Repositioning 13.9 0.5 14.4

Aerospace & Electronics $ 6.5 $ — $ 6.5

Process Flow Technologies 3.7 — 3.7

Payment & Merchandising Technologies 15.8 1.8 17.6

Engineered Materials 0.6 — 0.6

2020 Repositioning 26.6 1.8 28.4

Process Flow Technologies 14.9 ( 2.8 ) 12.1

2019 Repositioning 14.9 ( 2.8 ) 12.1

Aerospace & Electronics 1.3 ( 1.4 ) ( 0.1 )

Process Flow Technologies 13.1 ( 12.7 ) 0.4

Payment & Merchandising Technologies 11.5 0.7 12.2

2017 Repositioning $ 25.9 $ ( 13.4 ) $ 12.5

Crane Payment Innovations $ 5.8 $ 0.9 $ 6.7

2022 Restructuring $ 5.8 $ 0.9 $ 6.7

Crane Payment Innovations $ 15.8 $ 0.7 $ 16.5

Crane Currency — 1.1 1.1

2020 Restructuring $ 15.8 $ 1.8 $ 17.6

Crane Payment Innovations $ 11.4 $ 0.3 $ 11.7

Crane Currency 0.1 0.4 0.5

2017 Restructuring $ 11.5 $ 0.7 $ 12.2

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

Restructuring Liability

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

(in millions) 2022 Repositioning 2020 Repositioning 2019 Repositioning 2017 Repositioning Total

Balance as of December 31, 2020 (c)

$ — $ 4.2 $ 16.0 $ 4.7 $ 24.9

— — 0.1 — 0.1

Adjustments (b)

(in millions) 2022 Restructuring 2020 Restructuring 2017 Restructuring Total

Balance as of December 31, 2021 (b)

$ — $ — $ 0.1 $ 0.1

Utilization ( 0.2 ) — ( 0.1 ) ( 0.3 )

Balance as of December 31, 2021 (c)

$ — $ — $ 11.5 $ 0.7 $ 12.2

Charges (Gain) (a)

Balance as of December 31, 2022 (b)

$ 6.0 $ — $ — $ 6.0

Adjustments (b)

Utilization ( 5.9 ) — — ( 5.9 )

Balance as of December 31, 2022 (c)

Balance as of December 31, 2023 (b)

$ 0.6 $ — $ — $ 0.6

(a) Included within “Restructuring charges (gains), net” in the Consolidated Statements of Operations

(b) Included within “Restructuring charges (gains), net” in the Consolidated Statements of Operations and reflects changes in estimates for increases and decreases in costs

(a) Included within “Restructuring charges (gains), net” in the Consolidated and Combined Statements of Operations.

(b) Included within Accrued Liabilities in the Consolidated and Combined Balance Sheets.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data