Title of each class Trading Symbol Name of each exchange on which registered Common Stock, par value $1.00 CR New York Stock Exchange | --- | --- | |----------------------------------------------------------------------------|------------------------------------------| | | | | Delaware | 88-2846451 | | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES ...

Crane Company (NYSE:CR) Q3 2023 Earnings Conference Call October 24, 2023 10:00 AM ET Company Participants Jason Feldman - Vice President, Treasury & Investor Relations Max Mitchell - President & Chief Executive Officer Rich Maue - Executive Vice President & Chief Financial Officer Conference Call Participants Scott Deuschle - Deutsche Bank Damian Karas - UBS Matt Summerville - D.A. Davidson Nathan Jones - Stifel Operator Greetings. Welcome to Crane Company's Third Quarter 2023 Earnings Call. At this time, ...

FORWARD-LOOKING STATEMENTS – DISCLAIMER Readers should carefully review Crane's financial statements and the notes thereto, as well as the section entitled "Risk Factors" in Item 1A of Crane's Annual Report on Form 10-K for the year ended December 31, 2022 and the other documents Crane and its subsidiaries file from time to time with the SEC. Readers should also carefully review the "Risk Factors" section of the information statement filed as an exhibit to Crane's registration statement on Form 10. These fi ...

| --- | --- | |----------------------------------------------------------------------------|------------------------------------------| | | | | Delaware | 88-2846451 | | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | OR Securities registered pursuant to Section 12(b) of the Act: | --- | |---------------------------| | | | Accelerated filer | | Smaller reporting company | | Emerging growth company | | | Crane Company Table of Contents Item 1. Financial ...

Financial Data and Key Metrics Changes - The company reported a core sales growth of 5% and a 30% increase in adjusted operating profit, with adjusted EPS of $1.10, leading to a revised EPS guidance range of $3.80 to $4.10 [12][46][68] - Adjusted free cash flow for the second quarter was $60 million, consistent with normal seasonality, and the balance sheet continues to strengthen [26][71] - Adjusted operating margins increased to 15.1%, up 60 basis points from prior guidance, reflecting strong pricing and productivity gains [46][68] Business Line Data and Key Metrics Changes - Aerospace & Electronics segment sales increased 17% to $189 million, with segment margins rising 270 basis points to 20.2% due to strong leverage on higher volumes [23] - Process Flow Technologies reported sales of $263 million, a decrease of 11%, but core growth was solid at 4%, with adjusted operating margins increasing 440 basis points to 20% [43] - Engineered Materials sales decreased 21% to $57 million, but adjusted operating profit margins increased to 16.6% [45] Market Data and Key Metrics Changes - The backlog for Aerospace & Electronics increased by 26% to $675 million, driven by strong demand despite supply chain constraints [23] - Core FX-neutral backlog increased by 1%, while core FX-neutral orders decreased by 5%, indicating modest slowing in some markets [24] - The wastewater market continues to show strong momentum, with a 20% year-over-year growth expected for the chopper pump product [19] Company Strategy and Development Direction - The company aims for a long-term core sales growth rate of 4% to 6%, with a focus on resilient and durable businesses [21] - Strategic investments in high-power and bidirectional conversion are expected to secure positions in next-generation applications, including military vehicles [15][36] - The company is actively pursuing acquisition opportunities in both aerospace and process flow technologies, with enterprise values ranging from $75 million to $200 million [40][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in demand trends despite ongoing supply chain challenges, anticipating a longer upcycle due to aging fleets and strong aftermarket demand [14][32] - The company expects continued strong performance in 2023, driven by strong execution and a structural shift towards higher-margin products [25][32] - Management noted that while some markets are experiencing slowing demand, particularly in European chemicals, the overall outlook remains positive [74] Other Important Information - The company has a strong balance sheet with total debt of $262 million and cash of $219 million, providing significant financial flexibility for future capital deployment [71] - The company is committed to maintaining price discipline despite market fluctuations, with expectations for prices to remain stable [57][135] Q&A Session Summary Question: Can you provide more detail on the end market conditions, particularly in the four focus areas? - Management noted that MRO activity is solid, with customers maintaining lean inventory levels, which should not significantly impact demand [48] Question: How is the aerospace supply chain supporting higher production rates? - Management indicated that while the supply chain has improved, constraints still exist, but they are optimistic about the backlog growth [50][52] Question: What is the outlook for pricing in the context of supply chain constraints? - Management expects prices to remain sticky, with a favorable price-cost relationship continuing into the second half of the year [57][94] Question: How do you view the recent deal activity in the industry? - Management believes that recent transactions may provide more opportunities for them, as they are actively looking for strategic acquisitions [97][143] Question: What is the expected impact of market conditions on pricing and aftermarket resilience? - Management stated that aftermarket sales would be stronger if unconstrained, but they do not foresee significant risks related to inventory corrections [150][151]

Crane Holdings, Co. (NYSE:CR) Q1 2023 Earnings Conference Call May 11, 2023 10:00 AM ET Company Participants Jason Feldman - Vice President, Investor Relations Max Mitchell - President and Chief Executive Officer Rich Maue - Senior Vice President and Chief Financial Officer Conference Call Participants Damian Karas - UBS Matt Summerville - D.A. Davidson Adam Farley - Stifel Operator Greetings and welcome to the Crane Holdings Company First Quarter 2022 Earnings Call. At this time, all participants are in a ...

CRANE CRANE Q1 2023 FORWARD-LOOKING STATEMENTS – DISCLAIMER Words such as "anticipate(s)," "expect(s)," "intend(s)," "believe(s)," "plan(s)," "may," "will," "would," "could," "should," "seek(s)," and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those proj ...

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) Unaudited condensed consolidated financial statements and management's analysis for Crane Holdings, Co. and Crane Company [Item 1: Financial Statements](index=4&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements for Crane Holdings, Co. and supplemental combined statements for Crane Company - On April 3, 2023, Crane Holdings, Co. separated into two independent companies, spinning off its Aerospace & Electronics, Process Flow Technologies, and Engineered Materials segments into a new entity named Crane Company, with Crane Holdings, Co. subsequently renamed Crane NXT, Co[39](index=39&type=chunk) - For accounting purposes, this is treated as a "reverse spin-off," where Crane Company is considered the accounting successor to Crane Holdings, Co., and the historical financial statements of Crane Holdings, Co. are presented as the primary financial statements of Crane Company[459](index=459&type=chunk)[226](index=226&type=chunk) [Crane Holdings, Co. Condensed Consolidated Financial Statements](index=4&type=section&id=Crane%20Holdings%2C%20Co.%20Condensed%20Consolidated%20Financial%20Statements) Consolidated financial statements for Crane Holdings, Co. for Q1 2023, detailing key financial performance and position metrics Q1 2023 Consolidated Statement of Operations Highlights | Metric | Q1 2023 ($ millions) | Q1 2022 ($ millions) | | :--- | :--- | :--- | | Net Sales | $842.9 | $871.5 | | Operating Profit | $152.2 | $147.0 | | Net Income | $105.7 | $105.0 | | Diluted EPS | $1.84 | $1.81 | Consolidated Balance Sheet Highlights | Metric | March 31, 2023 ($ millions) | Dec 31, 2022 ($ millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $510.2 | $657.6 | | Total Current Assets | $1,695.8 | $1,751.9 | | Goodwill | $1,530.9 | $1,527.5 | | Total Assets | $4,336.0 | $4,390.2 | | Total Liabilities | $2,318.3 | $2,486.2 | | Total Equity | $2,017.7 | $1,904.0 | Consolidated Cash Flow Highlights | Metric | Q1 2023 ($ millions) | Q1 2022 ($ millions) | | :--- | :--- | :--- | | Cash used for operating activities | ($70.8) | ($55.5) | | Cash used for investing activities | ($12.8) | ($13.0) | | Cash used for financing activities | ($67.8) | ($97.8) | | Decrease in cash | ($147.4) | ($171.4) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details the basis of presentation, segment performance, revenue disaggregation, and key events like the Redco Sale and new financing Q1 2023 Segment Performance | Segment | Net Sales ($ millions) | Operating Profit ($ millions) | | :--- | :--- | :--- | | Aerospace & Electronics | $180.1 | $37.7 | | Process Flow Technologies | $271.4 | $63.3 | | Payment & Merchandising Technologies | $329.1 | $79.4 | | Engineered Materials | $62.3 | $11.4 | - Total backlog (remaining performance obligations) was **$1,580.5 million** as of March 31, 2023, with **84%** expected to be recognized as revenue in 2023[94](index=94&type=chunk) - As a result of the Redco Sale in August 2022, all asbestos obligations and related assets were removed from the company's balance sheet, and the company no longer has obligations for pending and future asbestos claims[119](index=119&type=chunk) - In March 2023, the company entered into a new senior secured credit agreement, including a **$500 million** revolving facility and a **$350 million** term loan facility, to support the post-Separation entity[123](index=123&type=chunk) [Crane Company Supplemental Condensed Combined Financial Statements](index=29&type=section&id=Crane%20Company%20Supplemental%20Condensed%20Combined%20Financial%20Statements) Supplemental combined financial statements for Crane Company in Q1 2023, detailing key financial performance and position metrics Q1 2023 Combined Statement of Operations Highlights | Metric | Q1 2023 ($ millions) | Q1 2022 ($ millions) | | :--- | :--- | :--- | | Net Sales | $513.8 | $538.9 | | Operating Profit | $86.3 | $70.2 | | Net Income | $61.8 | $54.1 | Combined Balance Sheet Highlights | Metric | March 31, 2023 ($ millions) | Dec 31, 2022 ($ millions) | | :--- | :--- | :--- | | Total Assets | $2,231.7 | $2,265.2 | | Total Liabilities | $668.8 | $1,123.5 | | Total Crane net investment | $1,562.9 | $1,141.7 | - The financial statements include allocated corporate costs from the parent company, Crane, amounting to **$25.8 million** in Q1 2023 and **$19.6 million** in Q1 2022[442](index=442&type=chunk)[4](index=4&type=chunk) [Notes to Condensed Combined Financial Statements](index=36&type=section&id=Notes%20to%20Condensed%20Combined%20Financial%20Statements) Details the stand-alone basis of presentation, allocation of centralized costs, segment results, and specific contingencies for Crane Company Q1 2023 Combined Segment Performance | Segment | Net Sales ($ millions) | Operating Profit ($ millions) | | :--- | :--- | :--- | | Aerospace & Electronics | $180.1 | $37.7 | | Process Flow Technologies | $271.4 | $63.3 | | Engineered Materials | $62.3 | $11.4 | - Total backlog for the combined business was **$1,024.4 million** as of March 31, 2023[208](index=208&type=chunk) - The business is responsible for environmental remediation liabilities, notably at the Goodyear, Arizona site, for which it has an estimated gross liability of **$23.7 million** as of March 31, 2023[10](index=10&type=chunk)[448](index=448&type=chunk) - A one-time cash dividend of **$275 million** was declared and paid to the parent, Crane Holdings, Co., on April 3, 2023, prior to the Separation[296](index=296&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's analysis of financial condition and results of operations for Crane Holdings, Co. and Crane Company for Q1 2023 [MD&A of Crane Holdings, Co.](index=56&type=section&id=MD%26A%20of%20Crane%20Holdings%2C%20Co.) Management discusses Q1 2023 consolidated results for Crane Holdings, Co., highlighting sales trends, operating profit changes, and key drivers - Q1 2023 sales decreased by **$28.6 million (3.3%)** year-over-year, driven by the divestiture of Crane Supply and negative foreign currency effects, partially offset by a **$54.2 million (6.2%)** increase in core sales[324](index=324&type=chunk)[302](index=302&type=chunk) - Operating profit increased by **$5.2 million (3.5%)** to **$152.2 million**, mainly due to higher pricing net of inflation and productivity gains totaling **$43.9 million**[303](index=303&type=chunk) - Aerospace & Electronics sales grew **14.6%** to **$180.1 million**, driven by strong demand in both commercial and military markets[358](index=358&type=chunk)[306](index=306&type=chunk) - Process Flow Technologies sales decreased **12.8%** to **$271.4 million**, largely due to the Crane Supply divestiture, but saw core sales growth of **9.7%**[333](index=333&type=chunk) [MD&A of Crane Company (Supplemental)](index=65&type=section&id=MD%26A%20of%20Crane%20Company%20(Supplemental)) This supplemental MD&A for Crane Company highlights Q1 2023 sales trends, operating profit changes, and key performance drivers - Q1 2023 combined sales decreased by **$25.1 million (4.7%)** year-over-year, with the divestiture of Crane Supply being the primary driver, partially offset by an **8.4%** increase in core sales[403](index=403&type=chunk)[375](index=375&type=chunk) - Operating profit for the combined businesses increased by **$16.1 million (22.9%)** to **$86.3 million**, reflecting strong pricing and productivity gains of **$27.1 million**[404](index=404&type=chunk) - Cash used for operating activities decreased slightly to **$71.6 million** in Q1 2023 from **$74.3 million** in Q1 2022, due to higher adjusted net income and lower asbestos-related payments[389](index=389&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk disclosures have occurred since the Annual Report on Form 10-K for December 31, 2022 - There have been no material changes in market risk since the last Annual Report on Form 10-K[394](index=394&type=chunk) [Item 4. Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[395](index=395&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, its internal controls[418](index=418&type=chunk) [Part II - Other Information](index=75&type=section&id=Part%20II%20-%20Other%20Information) This section covers legal proceedings, risk factors, and a list of exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 10, "Commitments and Contingencies," in the financial statements - Information regarding legal proceedings is incorporated by reference from Note 10 of the financial statements[422](index=422&type=chunk) [Item 1A. Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are referenced from the Annual Report on Form 10-K for December 31, 2022, with no material changes noted - Risk factor information is referenced from the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[397](index=397&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including key agreements related to the company's separation and executive certifications - Key exhibits filed include the Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, and Employee Matters Agreement related to the spin-off from Crane Holdings, Co[400](index=400&type=chunk)

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Crane Company, a diversified manufacturer across three segments (A&E, PFT, EM), is undergoing a spin-off from Crane Holdings, Co - Crane Company operates through three primary segments: Aerospace & Electronics (A&E), Process Flow Technologies (PFT), and Engineered Materials (EM), serving markets like aerospace, defense, process industries, and construction[34](index=34&type=chunk) - A plan was authorized in March 2022 to spin-off the A&E, PFT, and EM segments from Crane Holdings, Co. into the new, publicly-traded Crane Company, with an expected completion date of April 3, 2023[33](index=33&type=chunk)[38](index=38&type=chunk) Aerospace & Electronics 2022 Sales Mix | Market/Customer | Percentage of Sales | | :--- | :--- | | Commercial Market | 57% | | Military Market | 43% | | Original Equipment Manufacturers (OEMs) | 72% | | Aftermarket Customers | 28% | - The Process Flow Technologies segment provides highly engineered fluid handling equipment and is comprised of three main businesses: Process Valves and Related Products, Pumps and Systems, and Commercial Valves[44](index=44&type=chunk)[50](index=50&type=chunk) - The Engineered Materials segment manufactures fiberglass-reinforced plastic (FRP) panels, primarily for recreational vehicles (RVs), commercial buildings, and industrial applications[47](index=47&type=chunk) - As of December 31, 2022, the company employed approximately **7,000 people worldwide**, with about **4,000 in the United States**[57](index=57&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including macroeconomic conditions, supply chain disruptions, segment-specific dependencies, and challenges related to the planned spin-off - General business risks include adverse effects from global economic conditions, supply chain disruptions, raw material price volatility, and the cyclical nature of key end markets like aerospace and construction[65](index=65&type=chunk)[66](index=66&type=chunk)[345](index=345&type=chunk) - The Aerospace & Electronics segment's performance is highly dependent on commercial air traffic levels, airline profitability, and government defense spending, which can be volatile[379](index=379&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk) - The Process Flow Technologies segment's demand is tied to customers' capital investment and maintenance expenditures, influenced by global economic growth and commodity prices[403](index=403&type=chunk)[382](index=382&type=chunk) - Spin-off risks include not achieving expected benefits, incurring significant one-time costs, and challenges operating as a standalone public company with new requirements[404](index=404&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) - The company may be subject to contingent liabilities of Crane NXT post-spin-off, and the distribution may not qualify for intended tax-free treatment, leading to significant tax liabilities[410](index=410&type=chunk)[412](index=412&type=chunk) [Item 1B. Unresolved Staff Comments](index=26&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the U.S. Securities and Exchange Commission staff - There are **no unresolved staff comments**[290](index=290&type=chunk)[445](index=445&type=chunk) [Item 2. Properties](index=27&type=section&id=Item%202.%20Properties) The company summarizes its principal owned and leased manufacturing and non-manufacturing facilities globally as of December 31, 2022 Summary of Principal Facilities (Owned) | Segment | United States (sq. ft.) | Europe (sq. ft.) | Other Int'l (sq. ft.) | | :--- | :--- | :--- | :--- | | **Manufacturing** | | | | | Aerospace & Electronics | 731,575 | - | - | | Process Flow Technologies | 698,573 | 753,616 | 509,925 | | Engineered Materials | 644,333 | - | - | Summary of Principal Facilities (Leased) | Segment | United States (sq. ft.) | Europe (sq. ft.) | Other Int'l (sq. ft.) | | :--- | :--- | :--- | :--- | | **Manufacturing** | | | | | Aerospace & Electronics | - | 19,418 | 63,653 | | Process Flow Technologies | 97,220 | 822,573 | 111,594 | [Item 3. Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 12, 'Commitments and Contingencies,' in the Consolidated Financial Statements - Information regarding legal proceedings is incorporated by reference from Note 12 of the Consolidated Financial Statements[463](index=463&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[448](index=448&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Crane Company's common stock began 'when issued' trading on the NYSE under 'CR' in March 2023, with anticipated quarterly dividends subject to Board discretion - The company's common stock is approved for trading on the NYSE under the symbol **'CR'**, with 'when issued' trading starting **March 29, 2023**[312](index=312&type=chunk) - While the company anticipates paying quarterly dividends post-distribution, the timing and amount are at the sole discretion of its Board of Directors and are not guaranteed[449](index=449&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance and condition, presenting historical consolidated results for Crane Holdings, Co. and supplemental 'carve-out' results for Crane Company [MD&A of Crane Holdings, Co.](index=31&type=section&id=MD%26A%20of%20Crane%20Holdings%2C%20Co.) This section analyzes Crane Holdings, Co.'s historical consolidated financial results, noting a 2022 decrease in net sales and operating profit due to asbestos-related divestiture losses Crane Holdings, Co. Consolidated Financial Highlights | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Net Sales** | $3,374.9M | $3,408.0M | $2,936.9M | | **Operating Profit** | $369.5M | $529.2M | $262.9M | | **Net Income** | $401.1M | $435.4M | $181.0M | | **Diluted EPS** | $7.01 | $7.36 | $3.08 | - The **2022 operating profit** was significantly impacted by a **$162.4 million loss** on the divestiture of asbestos-related assets and liabilities[478](index=478&type=chunk)[498](index=498&type=chunk) - The company recognized a **gain of $232.5 million** in 2022 from the sale of its Crane Supply business[479](index=479&type=chunk) - As of December 31, 2022, the total debt to total capitalization ratio for Crane Holdings, Co. was **39.5%**[71](index=71&type=chunk)[585](index=585&type=chunk) [MD&A of Crane Company (Supplemental)](index=53&type=section&id=MD%26A%20of%20Crane%20Company%20%28Supplemental%29) This supplemental section presents Crane Company's 'carve-out' financial results, showing a 2022 decrease in net sales and operating profit, impacted by corporate expense allocations and new credit facilities Crane Company (Supplemental) Financial Highlights | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Net Sales** | $2,035.0M | $2,062.9M | $1,833.8M | | **Operating Profit** | $68.2M | $250.6M | $184.7M | | **Net Income** | $199.8M | $234.4M | $166.0M | - The financial statements are prepared on a 'carve-out' basis and include corporate expense allocations from Crane Holdings, Co. amounting to **$90.4 million in 2022**, **$62.2 million in 2021**, and **$37.6 million in 2020**[109](index=109&type=chunk)[244](index=244&type=chunk) - In March 2023, Crane Company entered into a new credit agreement providing for a **$500 million revolving credit facility** and a **$300 million term loan facility** to support its operations as a standalone company[111](index=111&type=chunk)[188](index=188&type=chunk) - On a supplemental basis, Crane Company's total debt to capitalization ratio was **25.9%** as of December 31, 2022[204](index=204&type=chunk)[225](index=225&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company discloses market risk exposure from interest rate and foreign currency fluctuations, with sensitivity analysis showing potential impacts on interest expense and net earnings - A hypothetical **1% increase** in prevailing interest rates would increase the company's variable rate interest expense by approximately **$4.0 million annually**[251](index=251&type=chunk)[376](index=376&type=chunk) - A **10% change** in foreign currency exchange rates would have impacted **2022 net earnings by approximately $15.2 million**, with primary exposure to the British pound, euro, and Canadian dollar[232](index=232&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=71&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents complete audited financial statements for Crane Holdings, Co. (Consolidated) and Crane Company (Supplemental Combined), including auditor reports and detailed notes for fiscal years 2020-2022 Crane Holdings, Co. Consolidated Balance Sheet Data (in millions) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $1,751.9 | $1,543.1 | | **Total Assets** | $4,390.2 | $4,486.6 | | **Total Current Liabilities** | $1,488.2 | $789.3 | | **Total Liabilities** | $2,486.2 | $2,651.5 | | **Total Equity** | $1,904.0 | $1,835.1 | Crane Company Supplemental Combined Balance Sheet Data (in millions) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $1,130.4 | $1,050.3 | | **Total Assets** | $2,265.2 | $2,501.2 | | **Total Current Liabilities** | $845.8 | $511.2 | | **Total Liabilities** | $1,123.5 | $1,417.7 | | **Total Crane Net Investment** | $1,141.7 | $1,083.5 | - The independent auditor, Deloitte & Touche LLP, identified revenue recognized over time for U.S. government contracts as a critical audit matter due to the significant judgments required by management to estimate margins[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) [Item 9A. Controls and Procedures](index=165&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2022, with no material changes to internal control over financial reporting during the year - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the fiscal year[736](index=736&type=chunk) - No changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were identified during the year[911](index=911&type=chunk) [Item 9B. Other Information](index=168&type=section&id=Item%209B.%20Other%20Information) The company reports no other information to disclose under this item - None[917](index=917&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=169&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section outlines the expected executive officers and Board of Directors for Crane Company post-spin-off, detailing its corporate governance structure and committee roles - The executive leadership team for the new Crane Company is identified, with **Max H. Mitchell as President & CEO** and **Richard A. Maue as EVP & CFO**[1251](index=1251&type=chunk)[1262](index=1262&type=chunk) - The post-spin-off Board of Directors will have four standing committees: Audit, Management Organization and Compensation, Nominating and Governance, and Executive[1215](index=1215&type=chunk) - The Board of Directors has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees to promote honest and ethical conduct and compliance with laws[1280](index=1280&type=chunk) [Item 11. Executive Compensation](index=178&type=section&id=Item%2011.%20Executive%20Compensation) This section details the performance-based executive compensation for Named Executive Officers, including base salary, annual cash incentives, and long-term equity awards, with 2022 payouts and future structures outlined - The executive compensation program is designed to be performance-based, with annual incentives tied to EPS and free cash flow, and long-term incentives linked to relative Total Shareholder Return (TSR)[1298](index=1298&type=chunk)[1314](index=1314&type=chunk) 2022 Annual Incentive Bonus Payouts | Named Executive Officer | Target Bonus (% of Salary) | Payout (%) | Bonus Paid ($) | | :--- | :--- | :--- | :--- | | M. H. Mitchell | 120% | 133.3% | 1,919,520 | | R. A. Maue | 80% | 133.3% | 767,644 | | A. M. D'Iorio | 70% | 133.3% | 489,913 | | A. Alcala | 70% | 154.6% | 542,611 | | T. Polmanteer | 70% | 133.3% | 407,578 | - Long-term incentive awards for NEOs in 2022 were allocated among Performance-Based Restricted Share Units (PRSUs), stock options, and Time-Based Restricted Share Units (TRSUs)[1329](index=1329&type=chunk)[1346](index=1346&type=chunk) - The company maintains stock ownership guidelines for executives, requiring the CEO to hold stock valued at **6 times base salary** and the CFO to hold **5 times base salary**[1378](index=1378&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=204&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section discloses anticipated beneficial ownership of Crane Company's common stock post-spin-off, identifying major institutional holders and the expected ownership of directors and executive officers Anticipated Beneficial Owners of More Than 5% | Owner | Anticipated Ownership (%) | | :--- | :--- | | The Crane Fund | 13.7% | | FMR LLC | 10.5% | | The Vanguard Group | 8.3% | | BlackRock, Inc. | 7.1% | - The directors and executive officers as a group are expected to beneficially own approximately **1.92%** of the company's common stock upon distribution[1193](index=1193&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=207&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section details key agreements governing the post-separation relationship between Crane Company and Crane NXT, including those for asset allocation, transition services, tax matters, employee benefits, and intellectual property - The Separation and Distribution Agreement will govern the transfer of assets and assumption of liabilities, primarily allocating A&E, PFT, and EM businesses to Crane Company[1452](index=1452&type=chunk)[1469](index=1469&type=chunk) - A Transition Services Agreement will be in place for up to **18 months**, under which Crane Company and Crane NXT will provide each other with services such as IT, finance, and HR to ensure an orderly separation[1200](index=1200&type=chunk)[1456](index=1456&type=chunk) - A Tax Matters Agreement will allocate tax liabilities and benefits, with each company generally responsible for taxes related to its respective business operations[1202](index=1202&type=chunk)[1474](index=1474&type=chunk) - An Employee Matters Agreement will address the allocation of employee liabilities, benefit plans, and the adjustment of outstanding equity awards to preserve their value post-spin-off[1204](index=1204&type=chunk)[1478](index=1478&type=chunk) [Item 14. Principal Accountant Fees and Services](index=214&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section discloses fees billed by Deloitte & Touche LLP for 2021 and 2022, noting a significant increase in audit fees in 2022 primarily due to spin-off related carve-out audits Principal Accountant Fees (in thousands) | Fee Category | 2022 | 2021 | | :--- | :--- | :--- | | Audit Fees | $10,019 | $5,540 | | Audit-Related Fees | $275 | $224 | | Tax Fees | $596 | $863 | | All Other Fees | $3 | $3 | | **Total** | **$10,893** | **$6,630** | - The significant increase in audit fees in 2022 was primarily due to services related to the spin-off, including multi-year carve-out audits of both Crane Company and Crane NXT[1226](index=1226&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=215&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including key legal documents governing the spin-off and future operations - This section lists all financial statements and exhibits filed with the 10-K, including key legal documents governing the spin-off and future operations[1489](index=1489&type=chunk)[1227](index=1227&type=chunk) [Item 16. Form 10-K Summary](index=217&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[1235](index=1235&type=chunk)

Crane Holdings, Co. (NYSE:CR) Q4 2022 Earnings Conference Call January 24, 2023 10:00 AM ET Company Participants Jason Feldman - Vice President, Investor Relations Max Mitchell - President and Chief Executive Officer Aaron Saak - President and Chief Executive Officer, Crane NXT Rich Maue - Senior Vice President and Chief Financial Officer Conference Call Participants Matt Summerville - D.A. Davidson Damian Karas - UBS Kristine Liwag - Morgan Stanley Nathan Jones - Stifel Operator Greetings and welcome to th ...