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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2020
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________ .
Commission file number 1-1657
CRANE CO. 
(Exact name of Registrant as specified in its charter)
Delaware   13-1952290
State of or other jurisdiction of incorporation or organization:
(I.R.S. Employer identification No.)
100 First Stamford Place Stamford CT 06902
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (203) 363-7300
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $1.00 CR New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes    ☒        No     ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act
Yes    ☐       No    ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes    ☒        No     ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes    ☒        No     ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer,”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act).:
(check one):
Large accelerated filer   ☒ Accelerated filer   ☐
Non-accelerated filer   ☐ Smaller reporting company   ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    ☐         No    ☒
Based on the closing stock price of $59.46 on June 30, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting common equity held by nonaffiliates of the registrant was 2,904,172,315
The number of shares outstanding of the registrant’s common stock, par value $1.00, was 58,164,560 at January 31, 2021.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2020


Index
 
         Page
Part I
Item 1.     
Page 2
Item 1A.     
Page 7
Item 1B.     
Page 14
Item 2.     
Page 15
Item 3.     
Page 16
Item 4.     
Page 16
Part II
Item 5.     
Page 17
Item 6.     
Page 18
Item 7.     
Page 19
Item 7A.     
Page 36
Item 8.     
Page 37
Item 9.     
Page 89
Item 9A.     
Page 89
Item 9B.     
Page 91
Part III
Item 10.     
Page 91
Item 11.     
Page 91
Item 12.     
Page 91
Item 13.     
Page 91
Item 14.     
Page 91
Part IV
Item 15.     
Page 92
Item 16. Form 10-K Summary
Page 93
Page 94




FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains information about Crane Co., some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as: “believes,” “contemplates,” “expects,” “may,” “will,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms.
We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. These statements should be considered in conjunction with the discussion in Part I, the information set forth under Item 1A, “Risk Factors” and with the discussion of the business included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

•The impact of the COVID-19 pandemic which is expected to continue to have an adverse impact on our operations and financial performance, as well as on the operations and financial performance of many of the customers and suppliers in industries that we serve;
•The effect of changes in economic conditions in the markets in which we operate, including financial market conditions, end markets for our products, fluctuations in raw material prices and the financial condition of our customers and suppliers;
•Economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States;
•Competitive pressures, including the need for technology improvement, successful new product development and introduction and any inability to pass increased costs of raw materials to customers;
•Our ability to successfully integrate acquisitions and to realize synergies and opportunities for growth and innovation;
•Our ability to successfully value acquisitions;
•Our ongoing need to attract and retain highly qualified personnel and key management;
•The ability of the U.S. government to terminate our government contracts;
•Our ability to predict the timing and award of substantial contracts in our banknote business;
•The impact of commercial air traffic levels which are affected by a different array of factors including general economic conditions and global corporate travel spending, terrorism or pandemic health concerns;
•A reduction in congressional appropriations that affect defense spending;
•The outcomes of legal proceedings, claims and contract disputes;
•Adverse effects on our business and results of operations, as a whole, as a result of increases in asbestos claims or the cost of defending and settling such claims;
•Adverse effects as a result of further increases in environmental remediation activities, costs and related claims;
•Investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and
•Adverse effects of changes in tax, environmental and other laws and regulations in the United States and other countries in which we operate.


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Part I
Reference herein to “Crane,” “we,” “us” and “our” refer to Crane Co. and our subsidiaries unless the context specifically states or implies otherwise. Amounts in the following discussion are presented in millions, except employee, square feet, number of properties, share and per share data, or unless otherwise stated.

Item 1. Business
General
We are a diversified manufacturer of highly engineered industrial products comprised of four segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Our primary end markets include process industries (chemical production, oil & gas, power, and general industrial), non-residential and municipal construction, payment automation solutions, banknote design and production, aerospace, defense and space, along with a wide range of general industrial and certain consumer related end markets.
We have been committed to the highest standards of business conduct since inception in 1855 when our founder, R.T. Crane, resolved “to conduct my business in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just toward employees; and to put my whole mind upon the business.”
Our strategy is to grow earnings and cash flow by focusing on the manufacturing of highly engineered industrial products for specific markets where our scale is a relative advantage, and where we can compete based on our proprietary and differentiated technology, our deep vertical expertise, and our responsiveness to unique and diverse customer needs. We continuously evaluate our portfolio, pursue acquisitions that complement our existing businesses and selectively divest businesses where appropriate. We strive to foster a performance-based culture focused on productivity and continuous improvement, to attract and retain a committed management team whose interests are directly aligned with those of our shareholders, and to maintain a focused, efficient corporate structure.
We operate a comprehensive set of business processes, philosophies and operational excellence tools to drive continuous improvement throughout our businesses (collectively, the Crane Business System). Beginning with a core value of integrity, we incorporate “Voice of the Customer” teachings (specific processes designed to capture our customers’ requirements) and a broad range of tools into a disciplined strategy deployment process to continuously improve safety, quality, delivery, cost and growth.  An embedded intellectual capital development process helps ensure that we attract, develop, promote and retain talent to drive continuity and repeatable results.
Reportable Segments
For additional information on recent business developments and other information about us and our business, you should refer to the information set forth under the captions, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Part II, Item 7 of this report, as well as in Part II, Item 8 under Note 3, “Segment Information,” in the Notes to Consolidated Financial Statements for sales, operating profit and assets employed by each segment.
Fluid Handling
The Fluid Handling 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 manufactures on/off isolation valves, instrumentation and controls, and related products for critical and demanding applications in the chemical, oil & gas, power and general industrial end markets globally. Products are sold under the trade names Crane, Saunders, Jenkins, Pacific, Xomox, Krombach, DEPA, ELRO, REVO, Flowseal, Centerline, Resistoflex, Duochek, Barksdale, Dynalco, Westlock, WTA, HOKE and DOPAK. Manufacturing locations, along with sales and service centers, are located across the North America, Europe, the Middle East, Asia and Australia.

Commercial Valves is engaged primarily in the manufacturing of valves and related products for the non-residential construction, general industrial, and municipal markets, and the distribution of pipe, valves and fittings (PVF) for the non-residential construction market. The primary geographies served by the manufacturing operations are the United Kingdom, the Middle East and continental Europe, and the PVF distribution business is focused exclusively on Canada. Brands include Stockham, Wask, Viking Johnson, IAT, Hattersley, NABIC, Sperryn, Wade, and Crane Supply. Manufacturing facilities are located in the United Kingdom and China, with additional sales offices in continental Europe and the Middle East; distribution facilities are located throughout Canada.
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Pumps and Systems manufactures pumps and related products for water and wastewater applications in the industrial, municipal, commercial and military markets, primarily in the United States. Products are sold under the trade names Deming, Weinman, Burks and Barnes. Facilities are located in the United States and Canada.
On January 31, 2020, we completed the acquisition of CIRCOR International, Inc.’s Instrumentation & Sampling Business (“I&S”) for $172 million on a cash-free and debt-free basis, subject to a later adjustment. I&S designs, engineers and manufactures a broad range of critical fluid control instrumentation and sampling solutions used in severe service environments. Facilities are located in the United States and the Netherlands. I&S has been integrated into our Process Valves and Related Products business.
Payment & Merchandising Technologies
The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (“CPI”) and Crane Currency.
CPI provides high technology payment acceptance and dispensing products to original equipment manufacturers, and for certain vertical markets, it also provides currency handling and processing systems, complete cash and cashless payment and merchandising solutions, equipment service solutions, and fully connected managed service solutions. Facilities are located in the United States, the United Kingdom, Mexico, Japan, Switzerland, Germany and the Ukraine, with additional sales offices across the world.
In the third quarter of 2020, we completed an internal merger to consolidate the Crane Merchandising Systems (“CMS”) business into the vending vertical within the CPI business. This internal merger will enable improved coordination and collaboration while delivering increasingly integrated connectivity solutions to our customers.
Crane Currency is a supplier of banknotes and highly engineered banknote security features. A pioneer in advanced micro-optics technology, Crane Currency provides a wide range of engaging visual effects in features that increase the level of security and public trust in banknotes. Crane Currency offers uniquely designed banknotes, substrate (paper) and printing capabilities for over 50 central banks around the world, with facilities located in the United States, Sweden and Malta.
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. The commercial market and military market accounted for 49% and 51%, respectively, of total segment sales in 2020. Sales to original equipment manufacturers ("OEM") and aftermarket customers were 75% and 25%, respectively, in 2020.
Crane Aerospace & Electronics has strong brands which have been supplying products to these end markets for several decades. Brands include Hydro-Aire, ELDEC, Lear Romec, P.L. Porter, Keltec, Interpoint, Signal Technology, Merrimac Industries, and Polyflon.
Products include a wide range of custom designed, highly engineered products used in landing systems, sensing and utility systems, fluid management, seat actuation, power and microelectronic applications, and microwave systems.
Our products are sold directly to aircraft manufacturers, commercial Tier 1 integrators (companies which make products specifically for an aircraft manufacturer), defense and space prime contractors, airlines, government agencies including the U.S. Department of Defense, foreign allied defense organizations, aircraft seat manufacturers, and aircraft maintenance, repair and overhaul organizations.
Facilities are located in the United States, Taiwan, and France.
Engineered Materials
The Engineered Materials segment manufactures fiberglass-reinforced plastic ("FRP") panels and coils, primarily for use in the manufacturing of recreational vehicles ("RVs"), and in commercial and industrial buildings applications, with some additional applications including trailers and other transportation-related products. Engineered Materials sells the majority of its products directly to RV, trailer, and truck manufacturers, and it uses distributors and retailers to serve the commercial and industrial construction markets. Manufacturing facilities are located in the United States.
Other Matters Relating to Our Business as a Whole
Competitive Conditions
Our businesses participate in markets that are highly competitive. Because of the diversity of products manufactured and sold, our businesses typically have a different set of competitors in each geographic area and end market in which they participate. Accordingly, it is not possible to estimate the number of competitors, or precise market share; however, we
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believe that we are a principal competitor in most of our markets. Our primary basis of competition is providing high quality products, with technological differentiation, at competitive prices, with superior customer service and timely delivery.
Our products are sold into primary end markets which include process industries (chemical production, oil & gas, power, and general industrial), non-residential and municipal construction, payment automation solutions, banknote design and production, aerospace, defense and space, along with a wide range of general industrial and certain consumer related end markets. As such, our revenues depend on numerous unpredictable factors, including changes in market demand, general economic conditions, customer capital spending, timing and amount of contract awards and credit availability. Since our products are sold in such a wide variety of markets, we do not believe that we can reliably quantify or predict the potential effects of changes in any of the aforementioned factors.
Our engineering and product development activities are focused on improving existing products, customizing existing products for particular customer requirements, as well as the development of new products. We own numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property, no one of which is of such importance that termination would materially affect our business. From time to time, however, we do engage in litigation to protect our intellectual property.
Raw Materials
Our manufacturing operations employ a wide variety of raw materials, including steel, copper, cast iron, electronic components, aluminum, plastics, cotton, flax and various petroleum-based products. We purchase raw materials from a large number of independent sources around the world. Although market forces have at times caused increases in the costs of steel, copper and petroleum-based products, there have been no raw materials shortages that have had a material adverse impact on our business, and we believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs. For a further discussion of risks related to raw materials; please refer to Item 1A. “Risk Factors.”
Seasonal Nature of Business
In aggregate, our business does not experience significant seasonality.
Government Contracts
We have agreements relating to the sale of products to government entities, primarily involving products in our Aerospace & Electronics and Payment & Merchandising Technologies segments and, to a lesser extent, our Fluid Handling segment. As a result, we are subject to various statutes and regulations that apply to companies doing business with the government. The laws and regulations governing government contracts differ from those governing private contracts. For example, some government contracts require disclosure of cost and pricing data and impose certain sourcing conditions that are not applicable to private contracts. Our failure to comply with these laws could result in suspension of these contracts, criminal or civil sanctions, administrative penalties and fines or suspension or debarment from government contracting or subcontracting for a period of time. For a further discussion of risks related to compliance with government contracting requirements; please refer to Item 1A. “Risk Factors.”
Environmental Compliance and Climate Change
We are regulated by federal, state and international environmental laws governing our use, transport and disposal of substances and control of emissions. Our manufacturing facilities generally do not produce significant volumes or quantities of byproducts that would be considered hazardous waste or otherwise harmful to the environment if not properly handled or maintained. Accordingly, continued compliance with these existing laws has not had a material impact on our capital expenditures or earnings.
However, we occasionally engage in environmental remediation activities as required by federal and state laws. In addition, we may be exposed to other environmental costs including participation in the characterization and remediation of federal Superfund sites, or analogous state sites. When it is reasonably probable we will pay remediation costs at a site, and those costs can be reasonably estimated, we accrue a liability for such future costs with a related charge against our earnings. For further discussion of environmental related risks; please refer to Item 1A. “Risk Factors.” For further discussion of our environmental matters; please refer to Part II, Item 8 under Note 12, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements.
Human Capital Resources
To remain a leading manufacturer of highly engineered industrial products, it is important that we continue to attract, develop, and retain exceptional talent across our global enterprise.
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At December 31, 2020, we employed approximately 11,000 persons worldwide, of which substantially all were full time employees. In the United States, we employed approximately 5,800 people across 97 locations. At December 31, 2020, approximately 4% of our U.S. employees were represented by a union under a collective bargaining agreement. Employees based in some foreign countries may, from time to time, be represented by works councils or unions or subject to collective bargaining agreements. We consider our relations with our employees to be good.
To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our associates. We are committed to an inclusive and high-performance culture at all levels of the organization, based on trust and respect. The Company has a diverse global workforce located in 32 countries, spanning six continents.
We are further committed to developing our associates personally and professionally by leveraging a structured and disciplined Intellectual Capital (IC) process. This regular IC cadence includes constructive reviews and various talent and leadership development initiatives conducted by the executive management team and provided throughout an associate’s career.
The manufacture and production of our products requires the use of a variety of tools, equipment, materials, and supplies. At Crane, we are strongly committed to the health and safety of our associates and strive to continuously adhere to global regulatory safety requirements and to reduce the incidence and severity of job-related injuries. We utilize strict compliance protocols, training programs, effective risk management practices, and sound science in our operations to minimize risk to our associates.
During 2020, in response to the COVID-19 pandemic, we implemented additional health and safety protocols and new procedures across all of our global offices, manufacturing and distribution facilities to ensure the safety and well-being of our associates. These protocols included proper hygiene, social distancing, mask use and temperature screenings and other health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.
For a discussion of risks related to employee relations, please refer to Item 1A. “Risk Factors.”
Available Information
We file annual, quarterly and current reports and amendments to these reports, proxy statements and other information with the U.S. Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers, like us, that file electronically with the SEC. The address of the SEC’s website is www.sec.gov.
We also make our filings available free of charge through our Internet website, as soon as reasonably practicable after filing such material electronically with, or furnishing such material, to the SEC. Also posted on our website are our Corporate Governance Guidelines, Standards for Director Independence, Crane Co. Code of Ethics and the charters and a brief description of each of the Audit Committee, the Management Organization and Compensation Committee and the Nominating and Governance Committee. These items are available in the “Investors – Corporate Governance” section of our website at www.craneco.com. The content of our website is not part of this report.

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Executive Officers of the Registrant
Name Position Business Experience Age Executive
Officer Since
Max H. Mitchell President and Chief Executive Officer President, Chief Executive Officer and Director since 2014. President and Chief Operating Officer from 2013 through 2014. Executive Vice President and Chief Operating Officer from 2011 to 2013. 57 2004
Alejandro Alcala Senior Vice President Senior Vice President Fluid Handling and operations in China, India and the Middle East & Africa since March 2020. President, Crane ChemPharma & Energy from 2014 to March 2020. President, Crane Pumps & Systems from 2013 to 2014. 46 2020
Christina Cristiano Vice President, Controller and Principal Accounting Officer Vice President, Controller and Principal Accounting Officer since May 2019. Vice President, Controller of Global Accounting and Statutory Reporting of Thomson Reuters from 2011 to May 2019. 48 2019
Anthony M. D'Iorio Senior Vice President, General
Counsel and Secretary 		Senior Vice President since February 2021. Vice President, General Counsel and Secretary since February 2018. Deputy General Counsel from 2013 through February 2018. Assistant General Counsel from 2005 through 2013. 57 2018
Kurt Gallo Senior Vice President Senior Vice President, Payment & Merchandising Technologies and Engineered Materials since April 2019. President, Crane Payment Solutions since 2012 and its successor, Crane Payment Innovation since 2014. 56 2019
James A. Lavish Vice President, People & Performance Vice President, People and Performance since February 2020. Vice President, CBS, People & Performance from January 2016 through January 2020. Vice President, Crane Business System from 2013 through January 2016. President, Crane Pumps & Systems from 2008 to 2013. 54 2016
Richard A. Maue Senior Vice President and
Chief Financial Officer 		Senior Vice President since January 2019. Chief Financial Officer since 2013. Principal Accounting Officer from 2007 through May 2019. Vice President - Finance from 2013 through January 2019. 50 2007
Kristian R. Salovaara Vice President of Business Development and Strategy Vice President of Business Development and Strategy since 2014. Vice President, Business Development from 2011 to 2014. 60 2011
Edward S. Switter Vice President, Treasurer and Tax Vice President, Treasurer and Tax since September 2016. Vice President, Tax from 2011 through September 2016. 46 2011

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Item 1A. Risk Factors
Our business, financial condition, results of operations and cash flows may be affected by a number of factors including, but not limited to those set forth below. This discussion should be considered in conjunction with the discussion under the caption “Forward-Looking Information” preceding Part I, the information set forth under Item 1, “Business” and with the discussion of the business included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These risks comprise the material risks of which we are aware. If any of the events or developments described below or elsewhere in this Annual Report on Form 10-K, or in any documents that we subsequently file publicly were to occur, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Risks Relating to COVID-19
Our financial condition and results of operations are expected to continue to be adversely affected by the coronavirus pandemic.
The novel strain of the coronavirus (“COVID-19”) pandemic is expected to continue to have an adverse impact on our operations and financial performance, as well as on the operations and financial performance of many of the customers and suppliers in industries that we serve. It is very difficult to predict the extent of the impact which the pandemic will have on our business operations, financial performance, results of operations, and financial position. We believe our operations and financial performance will continue to be negatively impacted by the COVID-19 pandemic which has caused a global slowdown of economic activity (including a decrease in demand for a broad variety of goods and services), disruptions in global supply chains and significant volatility and disruption of financial markets. Because the severity, magnitude and duration of the COVID-19 pandemic and its economic consequences remain uncertain and rapidly changing, it is difficult to predict the extent of the pandemic’s impact on our operations and financial performance. Further, the ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control, including, but not limited to, governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic (including shutdown orders, border closings, restrictions on travel and transport and workforce pressures); the impact of the pandemic and actions taken in response on global and regional economies, travel, and economic activity; general economic uncertainty in key global markets and financial market volatility; global economic conditions and levels of economic growth; commodity prices such as oil and gas, and the pace of recovery when the COVID-19 pandemic subsides. We continue to expect lower demand and volume for products and services, supply chain disruptions, delays of deliveries and other factors related directly and indirectly to the COVID-19 pandemic. To the extent global vaccination programs do not achieve intended results and a longer period of economic and global supply chain and related disruption continues, the more adverse the impact will be on our business operations, financial performance and results of operations. As the impact of the COVID-19 pandemic on the economy and our operations evolves, we will continue to assess our liquidity needs. A prolonged or worsening worldwide disruption could materially affect our future access to our sources of liquidity, particularly our cash flows from operations and access to credit markets, which could impact our financial condition, capitalization, and capital investments. Additionally, a prolonged period of generating lower cash flows from operations could adversely affect our financial condition and the achievement of our strategic objectives. Conditions in the financial and credit markets may also limit the availability of funding or increase the cost of funding, which could adversely affect our business, financial position and results of operations.
Risks Relating to Our Business
Macroeconomic fluctuations may harm our business, results of operations and stock price.
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, levels of consumer and business confidence, commodity prices, exchange rates, levels of government spending and deficits, political conditions, and other challenges that could affect the global economy. These economic and geopolitical conditions could affect businesses such as ours in a number of ways. Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations or refinance maturing debt balances at economically favorable interest rates. In addition, restrictions on credit availability could adversely affect the ability of our customers to obtain financing for significant purchases and could result in decreases in or cancellation of orders for our products and services as well as impact the ability of our customers to make payments. Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy. See “Specific Risks Related to Our Business Segments.”
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We are subject to numerous lawsuits for asbestos-related personal injury, and costs associated with these lawsuits may adversely affect our financial condition, results of operations and cash flows.
We are subject to numerous lawsuits for asbestos-related personal injury. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims. Our estimate of the future expense of these claims is derived from assumptions with respect to future claims, settlement and defense costs which are based on experience during the last few years and which may not prove reliable as predictors. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial or on appeal. A legislative solution or a structured settlement transaction could also change the estimated liability. These uncertainties may result in our incurring future charges or increases to income to adjust the carrying value of recorded liabilities and assets, particularly if the number of claims and settlements and defense costs escalates or if legislation or another alternative solution is implemented; however, we are currently unable to predict such future events. The resolution of these claims may take many years, and the effect our financial condition, results of operations and cash flows in any given period from a revision to these estimates could be material.
As of December 31, 2020, we were one of a number of defendants in cases involving 29,138 pending claims filed in various state and federal courts that allege injury or death as a result of exposure to asbestos. See Part II, Item 8 under Note 12, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements for additional information on:
•Our pending claims;
•Our historical settlement and defense costs for asbestos claims;
•The liability we have recorded in our financial statements for pending and reasonably anticipated asbestos claims through 2059;
•The asset we have recorded in our financial statements related to our estimated insurance coverage for asbestos claims; and
•Uncertainties related to our net asbestos liability.
In the fourth quarter of 2019, we updated the estimate of our asbestos liability and recorded a pre-tax charge of $229 million, net of insurance recoveries ($181 million after tax). Our updated liability estimate is for pending and reasonably anticipated asbestos claims through the generally accepted end point of such claims in 2059. Due to uncertainties in the tort system, as well as uncertainties inherent in the estimation process, future reviews may result in adjustments to our total asbestos-related liability. The aggregate liability was $670 million as of December 31, 2020.
Information systems and technology networks failures and breaches in data security, personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information, or a violation of our privacy and security policies with respect to such information, could adversely affect us.
We are dependent on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and, in the normal course of our business, we collect and retain certain types of personally identifiable and other information pertaining to our customers, stockholders and employees. The legal, regulatory and contractual environment surrounding information security and privacy is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around the world. A theft, loss, fraudulent use or misuse of customer, stockholder, employee or our proprietary data by cybercrime or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could adversely impact our reputation and could result in costs, fines, litigation or regulatory action against us. Security breaches can create system disruptions and shutdowns that could result in disruptions to our operations. We cannot be certain that advances in criminal capabilities, new vulnerabilities or other developments will not compromise or breach the security solutions protecting our information technology, networks and systems. A failure of or cyber-attack on our information systems technology or those of our partners, vendors, supplier could adversely affect our ability to process orders, maintain proper levels of inventory, collect accounts receivable and pay expenses; all of which could have an adverse effect on our results of operations, financial condition and cash flows. Failure to effectively prevent, detect and recover from security breaches, including attacks on information technology and infrastructure by hackers; viruses; breaches due to employee error or actions; or other disruptions could seriously harm our operations as well as the operations of our customers and suppliers. Such serious harm can involve, among other things, misuse of our assets, business disruptions, loss of data, unauthorized access to trade secrets and confidential business information, unauthorized access to personal information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, reputational harm, loss of sales,
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remediation and increased insurance costs, and interference with regulatory compliance. We have experienced and expect to continue to experience some of these types of cybersecurity threats and incidents, which could be material in the future.
Demand for our products is variable and subject to factors beyond our control, which could result in unanticipated events significantly impacting our results of operations.
A substantial portion of our sales is concentrated in industries that are cyclical in nature or subject to market conditions which may cause customer demand for our products to be volatile. Reductions in demand by these industries would reduce the sales and profitability of the affected business segments.
•Our Fluid Handling segment is dependent on global economic conditions, customer capital spending and commodity prices. Deterioration in any of these economic factors could result in sales and profits falling below our current outlook.
•Our Payment & Merchandising Technologies segment could be affected by sustained weakness in certain geographic markets or certain end markets such as gaming, retail or banking, as well as low employment levels, office occupancy rates and factors affecting vending operator profitability such as higher fuel, food and equipment financing costs; results could also be impacted by unforeseen advances in payment processing technologies. In addition, our results in this segment are subject to significant variability due to the timing and size of contract awards by central banks for banknote production and actual order rates, particularly with the U.S. government.
•In our Aerospace & Electronics segment, a significant decline in demand for air travel, or a decline in airline profitability generally, could result in reduced orders for aircraft and could also cause airlines to reduce their purchases of repair parts from our businesses. In addition, our Aerospace & Electronics segment could also be impacted to the extent that our major aircraft manufacturing customers encounter problems which impact their production rates and, correspondingly, reduce purchases of our products (for example, the grounding of the 737 MAX and associated suspension of 737 MAX production announced by Boeing in December 2019 reduced our sales and operating profit in 2020), or if pricing pressure from aircraft customers caused the manufacturers to press their suppliers to lower prices and/or extend payment terms; in addition, demand for military and defense products is dependent upon government spending in certain areas which can vary year to year.
•In our Engineered Materials segment, sales and profits could be affected by declines in demand for RVs, building materials or truck trailers; results could also be impacted by unforeseen changes in capacity or price increases related to certain raw materials, in particular, resin.
Our operations expose us to the risk of environmental liabilities, costs, litigation and violations that could adversely affect our financial condition, results of operations, cash flows and reputation.
Our operations are subject to extensive environmental and health and safety laws and regulations in the jurisdictions in which they operate, which impose limitations on the discharge of pollutants into the ground, air and water and establish standards for the generation, treatment, use, storage and disposal of solid and hazardous wastes. We must also comply with various health and safety regulations in the U.S. and abroad in connection with our operations. The costs of compliance with these regulations results in ongoing costs that may increase over time. Failure to comply with any of these laws could result in civil and criminal liability, substantial monetary and non-monetary penalties and damage to our reputation. In addition, we cannot provide assurance that our costs related to remedial efforts or alleged environmental damage associated with past or current waste disposal practices or other hazardous materials handling practices will not exceed our estimates or adversely affect our financial condition, results of operations and cash flows. For example, during the fourth quarter of 2019, we received conceptual agreement from the Environmental Protection Agency on an alternative remediation strategy which is expected to further reduce the contaminant plume at the former manufacturing site in Goodyear, Arizona. Accordingly, 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 $39.8 million as of December 31, 2020.
Our businesses are subject to extensive governmental regulation; failure to comply with those regulations could adversely affect our financial condition, results of operations, cash flows and reputation.
We are required to comply with various import and export control laws, which may affect our transactions with certain customers, particularly in our Aerospace & Electronics, Fluid Handling and Payment & Merchandising Technology segments, as discussed more fully under “Specific Risks Relating to Our Business Segments.” In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services and technologies, and in other circumstances we may be required to obtain an export license before exporting the controlled item. A failure to comply with these requirements might result in suspension of these contracts and suspension or debarment from government contracting or subcontracting. For example, compliance with regulations related to the sourcing of conflict-free minerals mined from the democratic Republic of Congo and adjoining countries could limit the pool of suppliers who can provide conflict-free minerals
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to us, and as a result, may cause us to incur additional expenses and may create challenges for us to obtain conflict-free minerals at competitive prices. In addition, we are subject to the Foreign Corrupt Practices Act, which prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business, or securing any improper advantage. We are also subject to the anti-bribery laws of other jurisdictions. Failure to comply with any of these and similar regulations could result in civil and criminal liability, monetary and non-monetary penalties, fines, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation.
We conduct a substantial portion of our business outside the U.S. and face risks inherent in non-domestic operations.
Net sales and assets related to our operations outside the U.S. were 37% of our consolidated amounts in 2020. We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future. These operations and transactions are subject to the risks associated with conducting business internationally, including, but not limited to:
•changes in the U.S. government's approach to trade policy, including in some cases renegotiating and terminating certain existing bilateral or multi-lateral trade agreements. The U.S. government has also initiated tariffs on certain foreign goods from a variety of countries and regions, most notably China, and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods in other countries. In response, many of these foreign governments have imposed retaliatory tariffs on goods that their countries import from the U.S. Changes in U.S. trade policy have and may continue to result in one or more foreign governments adopting responsive trade policies that make it more difficult or costly for us to do business in or import our products from those countries. The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows;
•the risks of fluctuations in foreign currency exchange rates, primarily the euro, the British pound, the Canadian dollar and the Japanese yen, could adversely affect our reported results, primarily in our Fluid Handling and Payment & Merchandising Technologies segments, as amounts earned in other countries are translated into U.S. dollars for reporting purposes; and
•economic and political instability in the countries and regions in which we operate. This includes, for example, the uncertainty surrounding the United Kingdom’s exit from the European Union (Brexit) on January 31, 2020, including the effects of the Trade and Cooperation Agreement between the European Union, the European Atomic Energy Community and the United Kingdom signed on December 30, 2020. The political and economic instability created by Brexit has caused and may continue to cause volatility in global stock markets, currency exchange rate fluctuations and global economic uncertainty, which could adversely affect customer demand, our relationships with customers and suppliers, our business and financial statements.
Our ability to source parts and raw materials from our suppliers could be disrupted or delayed in our supply chain which could adversely affect our results of operations.
Our operations require significant amounts of necessary parts and raw materials. We deploy a continuous, company-wide process to source our parts and raw materials from fewer suppliers, and to obtain parts from suppliers in low-cost countries where possible. If we are unable to source these parts or raw materials, our operations may be disrupted, or we could experience a delay or halt in certain of our manufacturing operations. We believe that our supply management and production practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices. Nonetheless, reduced availability or interruption in supplies, whether resulting from more stringent regulatory requirements; supplier financial condition; increases in duties and tariff costs; disruptions in transportation; an outbreak of a severe public health pandemic, such as the COVID-19 pandemic; severe weather; the occurrence or threat of wars or other conflicts, could have an adverse effect on our financial condition, results of operations and cash flows.
We may be unable to identify or to complete acquisitions, or to successfully integrate the businesses we acquire.
We have evaluated, and expect to continue to evaluate, a wide array of potential acquisition transactions. Our acquisition program attempts to address the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities, systems of internal control and potential profitability of acquisition candidates, as well as other challenges such as retaining the employees and integrating the operations of the businesses we acquire. Integrating acquired operations, such as our 2020 acquisition of I&S or 2019 acquisition of Cummins-Allison, involves significant risks and uncertainties, including:
•Maintenance of uniform standards, controls, policies and procedures;
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•Unplanned expenses associated with the integration efforts;
•Inability to achieve planned facility repositioning savings or related efficiencies from recent and ongoing investments; and
•Unidentified issues not discovered in the due diligence process, including legal contingencies.
There can be no assurance that suitable acquisition opportunities will be available in the future, that we will continue to acquire businesses or that any business acquired will be integrated successfully or prove profitable, which could adversely impact our growth rate. Our ability to achieve our growth goals depends in part upon our ability to identify and successfully acquire and integrate companies and businesses at appropriate prices and realize anticipated cost savings.
Our future results of operations and financial condition could be adversely impacted by intangible asset impairment charges.
As of December 31, 2020, we had goodwill and other intangible assets, net of accumulated amortization, of $2,129 million, which represented approximately 46% of our total assets. Our goodwill is subject to an impairment test on an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired. Any excess goodwill resulting from the impairment test must be written off in the period of determination. Intangible assets (other than goodwill) are generally amortized over the useful life of such assets. In addition, from time to time, we may acquire or make an investment in a business that will require us to record goodwill based on the purchase price and the value of the acquired assets. We may subsequently experience unforeseen issues with such business that adversely affect the anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the recorded goodwill and intangible assets for such business. Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have an adverse effect on our financial condition and results of operations.
Our business could be harmed if we are unable to protect our intellectual property.
We rely on a combination of trade secrets, patents, trademarks, copyrights and confidentiality procedures to protect our products and technology. Existing trade secret, patent, trademark and copyright laws offer only limited protection. Our patents could be invalidated or circumvented. In addition, others may develop substantially equivalent, or superseding proprietary technology, or competitors may offer equivalent non-infringing products in competition with our products, thereby substantially reducing the value of our proprietary rights. The laws of some foreign countries in which our products are or may be manufactured or sold may not protect our products or intellectual property rights to the same extent as do the laws of the U.S. We cannot assure that the steps we take to protect our intellectual property will be adequate to prevent misappropriation of our technology. We could incur significant and/or unexpected costs in our efforts to successfully avoid, manage, defend and litigate intellectual property matters. Our inability to protect our intellectual property could have an adverse effect on our financial condition, results of operations and cash flows.
The prices of our raw materials could fluctuate dramatically, which may adversely affect our profitability.
The costs of certain raw materials that are critical to our profitability can be volatile which can have a significant impact on our profitability. The costs in our business segments are affected by fluctuations in the price of metals such as steel and copper as well as other raw materials such as resin, cotton, and flax. While we have taken actions aimed at securing an adequate supply of raw materials at prices which are favorable to us, if the prices of critical raw materials increase, our operating costs could be adversely affected.
We compete with other manufacturing businesses for key human resources in the countries in which we operate, and we may not be able to retain our key personnel or hire and retain additional personnel needed for us to sustain and grow our business as planned.
Certain of our business segments and corporate offices are dependent upon highly qualified personnel, and we generally are dependent upon the continued efforts of key management employees. While we believe we have a robust intellectual capital process, we may have difficulty retaining such personnel or locating and hiring additional qualified personnel. The loss of the services of any of our key personnel or our failure to attract and retain other qualified and experienced personnel on acceptable terms could impair our ability to successfully sustain and grow our business, which could have an adverse effect on our results of operations and financial condition.
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We may be unable to improve productivity, reduce costs and align manufacturing capacity with customer demand.
We are committed to continuous productivity improvement, and we continue to evaluate opportunities to reduce costs, simplify or improve global processes, and increase the reliability of order fulfillment and satisfaction of customer needs. In order to operate more efficiently and control costs, from time to time we execute restructuring activities, which include workforce reductions and facility consolidations. For example, we recorded pre-tax restructuring charges of $32.1 million for the 2020 repositioning program related to actions to reduce our global workforce in response to the adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition. We expect to achieve annualized savings of approximately $100 million. While these are proactive actions to increase our productivity and operating effectiveness, our failure to respond to potential declines in global demand for our products and services and properly align our cost base could have an adverse effect on our financial condition, results of operations and cash flows.
We could face potential product liability or warranty claims, we may not accurately estimate costs related to such claims, and we may not have sufficient insurance coverage available to cover such claims.
Our products are used in a wide variety of commercial applications and certain residential applications. We face an inherent business risk of exposure to product liability or other claims in the event our products are alleged to be defective or that the use of our products is alleged to have resulted in harm to others or to property. We may in the future incur liability if product liability lawsuits against us are successful. Moreover, any such lawsuits, whether or not successful, could result in adverse publicity to us, which could cause our sales to decline.
In addition, consistent with industry practice, we provide warranties on many of our products and we may experience costs of warranty or breach of contract claims if our products have defects in manufacture or design or they do not meet contractual specifications. We estimate our future warranty costs based on historical trends and product sales, but we may fail to accurately estimate those costs and thereby fail to establish adequate warranty reserves for them.
While we maintain insurance coverage with respect to certain liability claims, that insurance coverage may not be adequate to cover all claims that may arise or we may not be able to maintain adequate insurance coverage in the future at an acceptable cost. Any liabilities not covered by insurance or that exceed our established reserves could have an adverse effect on our financial condition, results of operations and cash flows.
We may be unable to successfully develop and introduce new products, which would limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow.
Our growth depends, in part, on continued sales of existing products, as well as the successful development and introduction of new products or technologies, which face the uncertainty of customer acceptance and reaction from competitors. Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position. Further, the development and introduction of new products may require us to make investments in specialized personnel and capital equipment, increase marketing efforts and reallocate resources away from other uses. We also may need to modify our systems and strategy in light of new products that we develop. If we are unable to develop and introduce new products in a cost-effective manner or otherwise manage effectively the operations related to new products, our financial condition, results of operations and cash flows could be adversely impacted.
We face significant competition which may adversely impact our financial condition, results of operations, and cash flows in the future.
While we are a principal competitor in most of our markets, all of our markets are highly competitive. The competitors in many of our business segments can be expected in the future to improve technologies, reduce costs and develop and introduce new products. The ability of our business segments to achieve similar advances will be important to our competitive positions. Competitive pressures, including those discussed above, could cause one or more of our business segments to lose market share or could result in significant price erosion, either of which could have an adverse effect on our financial condition, results of operations and cash flows.
Net periodic pension (benefit) cost and pension contributions associated with our retirement benefit plans may fluctuate significantly depending upon changes in actuarial assumptions and future market performance of plan assets.
Total net periodic pension benefit and pension contributions were $6.8 million and $26.1 million, respectively in 2020. The costs of our defined benefit pension plans are dependent upon various factors, including rates of return on investment assets, discount rates for future payment obligations, and expected mortality, among other things. In addition, funding requirements for benefit obligations of our pension plans are subject to legislative and other government regulatory actions. Variances in related estimates could have an adverse effect on our financial condition, results of operations and cash flows.
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Additional tax expense or exposures could affect our financial condition, results of operations and cash flows.
We are subject to income taxes in the U.S. and various international jurisdictions. Our financial condition, results of operations and cash flow could be affected by changes to any or all of the following: tax laws, regulations, accounting principles and judicial rulings, the geographic mix of our earnings, the valuation of our deferred tax assets and liabilities, and the results of audits and examinations of previously filed tax returns.
If our internal controls are found to be ineffective, our financial results or our stock price may be adversely affected.
We believe that we currently have adequate internal control procedures in place for future periods, including processes related to newly acquired businesses; however, increased risk of internal control breakdowns generally exists in any business environment that is decentralized such as ours. In addition, if our internal control over financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial statements, which may adversely affect our stock price.
Specific Risks Relating to Our Reportable Segments
Fluid Handling
Our Fluid Handling segment competes in markets that are fragmented and highly competitive. The business competes against large, well established global companies, as well as smaller regional and local companies. We compete based on our products’ quality, reliability and safety, our brand reputation, value-added technical expertise and customer support and consistent on-time delivery. However, pricing can be highly competitive, particularly in regions and end markets with weakening levels of demand, or in markets where our value proposition - quality, reliability, and safety - is not valued as highly. Additionally, our results in this segment could be adversely impacted if our recently acquired I&S business is not integrated successfully.
Demand for our Fluid Handling products is heavily dependent on our customers’ level of new capital investment and planned maintenance expenditures. Customer spending typically depends on general economic conditions, availability of credit, and expectations of future demand. Slowing global economic growth, volatility in commodity prices, including continued weakness in oil prices could all contribute to lower levels of customer spending, and project delays or cancellations.
A portion of this segment’s business is subject to government contracting rules and regulations. Failure to comply with these requirements could result in suspension or debarment from government contracting or subcontracting, civil and criminal liability, monetary and non-monetary penalties, disruptions to our business, limitations on our ability to export products and services, or damage to our reputation. At our foreign operations, results could also be adversely impacted by a weakening of local currencies against the U.S. dollar. Our Fluid Handling business has the greatest exposure to the euro, British pound and Canadian dollar, and lesser exposure to several other currencies.
Payment & Merchandising Technologies
Our Payment & Merchandising Technologies segment sales are dependent on capital spending in a variety of end markets and across numerous geographies. The level of capital expenditures by our customers depends on general economic conditions, availability of credit, and expectations of future demand. In addition, our results in this segment are subject to significant variability due to the timing and size of contract awards by central banks for banknote production and actual order rates, particularly with the U.S. government. Our results in this segment could also be adversely impacted if our recently acquired Cummins-Allison business is not integrated successfully, including achieving expected synergies.
This business regularly develops and markets new products. Delays in the product development process, or the inability of new products to meet targeted performance measures, could hurt future sales. This business is also directly and indirectly exposed to changes in government regulations; for example, changes in gaming regulations could influence the spending patterns of our casino operator customers, or changes in anti-money laundering regulations could result in additional technical requirements for our products. We are also subject to investigation and audit for compliance with the requirements governing government contracts, including requirements related to procurement integrity, manufacturing practices and quality procedures, export control, employment practices, the accuracy of records and the recording of costs and information security requirements. A failure to comply with these requirements could result in suspension of these contracts, and suspension or debarment from government contracting or subcontracting. Failure to comply with any of these regulations could result in civil and criminal liability, monetary and non-monetary penalties, fines, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation.
At our foreign operations, results could also be adversely impacted by a weakening of local currencies against the U.S. dollar; this business has the greatest exposure to the euro, British pound, the Japanese yen, the Mexican peso, and the Canadian dollar, although there is lesser exposure to several other currencies. In addition, our facility in Mexico operates under the
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Mexican Maquiladora program. This program provides for reduced tariffs and eased import regulations; we could be adversely affected by changes in such program, or by our failure to comply with its requirements.
Aerospace & Electronics
Our Aerospace & Electronics segment sales are primarily affected by conditions in the commercial aerospace industry which is cyclical in nature, and by changes in defense spending by the U.S. government.
Commercial aircraft are procured primarily by airlines, and airline capital spending can be affected by a number of factors including credit availability, current and expected fuel prices, and current and forecast air traffic demand levels. Air traffic levels are affected by a different array of factors including general economic conditions and global corporate travel spending, although other non-economic events can also adversely impact airline traffic, including terrorism or pandemic health concerns, such as the COVID-19 pandemic. Our commercial business is also affected by the market for business jets where demand is typically tied to corporate profitability levels, and the freight markets which are most heavily influenced by general economic conditions. Demand for our commercial aftermarket business is closely tied to total aircraft flight hours. Any decrease in demand for new aircraft or equipment, or use of existing aircraft and equipment, would likely result in decreased sales of our products and services. In addition, our commercial business could also be impacted to the extent that our major aircraft manufacturing customers encounter problems which impact their production rates and, correspondingly, reduce purchases of our products (for example, the grounding of the 737 MAX and associated suspension of 737 MAX production announced by Boeing in December 2019 reduced our sales and operating profit in 2020), or if pricing pressure from aircraft customers caused the manufacturers to press their suppliers to lower prices and/or extend payment terms.
The defense portion of the segment’s business is dependent primarily on U.S. government spending, and to a lesser extent, foreign government spending, on the specific military platforms and programs where our business participates. Any reduction in appropriations for these platforms or programs could impact the performance of our business. Our sales to defense customers are also affected by the level of activity in military flight operations.
We are required to comply with various export control laws, which may affect our transactions with certain customers. In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services and technologies, and in other circumstances we may be required to obtain an export license before exporting the controlled item. We are also subject to investigation and audit for compliance with the requirements governing government contracts, including requirements related to procurement integrity, manufacturing practices and quality procedures, export control, employment practices, the accuracy of records and the recording of costs and information security requirements. A failure to comply with these requirements could result in suspension of these contracts, and suspension or debarment from government contracting or subcontracting. Failure to comply with any of these regulations could result in civil and criminal liability, monetary and non-monetary penalties, fines, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation.
Due to the lengthy research and development cycle involved in bringing commercial and military products to market, we cannot accurately predict the demand levels that will exist once a given new product is ready for market. In addition, if we are unable to develop and introduce new products in a cost-effective manner or otherwise effectively manage the introduction of new products and/or programs, our results of operations and financial condition could be adversely impacted. Demand for our products could also be adversely impacted by industry consolidation that could result in greater acceptance of competitors' products.
Engineered Materials
Our Engineered Materials segment manufactures and sells FRP panels and coils, primarily for use in the manufacturing of RVs, trucks, and trailers, with additional applications in commercial and industrial building construction. Demand in these end markets is dependent on general economic conditions, credit availability, and consumer and corporate spending levels. A decline in demand in any of these end markets, including a significant change in RV industry capacity, including, the recent overproduction by RV OEMs that occurred mostly in 2017 which has unfavorably impacted our results of operations and cash flows in 2018 and 2019; a loss of market share; or customer pricing pressure would result in lower sales and profits for this business. Profitability could also be adversely affected by an increase in the price of resin or fiberglass if we are unable to pass the incremental costs on to our customers. Additional risks include the loss of a principal supplier, and potential loss of market share to competing materials, such as wood or aluminum.
Item 1B. Unresolved Staff Comments
None

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Item 2. Properties

The following is a summary of our principal facilities as of December 31, 2020:
  Facilities - Owned
Location Fluid Handling Payment & Merchandising Technologies Aerospace &
Electronics 		Engineered Materials Corporate Total
   Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.)
Manufacturing:
United States 7  798,509  7  1,346,404  6  724,240  4  644,333  —  —  24  3,513,486 
Canada —  —  —  —  —  —  —  —  —  —  —  — 
Europe 6  921,233  3  732,713  —  —  —  —  —  —  9  1,653,946 
Other international 4  415,689  2  294,666  —  —  —  —  —  —  6  710,355 
  17  2,135,431  12  2,373,783  6  724,240  4  644,333  —  —  39  5,877,787 
Non-Manufacturing: —  — 
United States 2  98,510  7  286,973  —  —  —  —  —  —  9  385,483 
Canada 6  143,634  —  —  —  —  —  —  —  —  6  143,634 
Europe 2  73,780  1  11,000  —  —  —  —  —  —  3  84,780 
Other international —  —  —  —  —  —  —  —  —  —  —  — 
  10  315,924  8  297,973  —  —  —  —  —  —  18  613,897 
 
  Facilities - Leased
Location Fluid Handling Payment & Merchandising Technologies Aerospace &
Electronics 		Engineered Materials Corporate Total
   Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.) 		Number Area
(sq. ft.)
Manufacturing
United States 2  97,220  1  141,049  —  —  —  —  —  —  3  238,269 
Canada 1  20,572  —  —  —  —  —  —  —  —  1  20,572 
Europe 3  517,890  2  35,771  —  —  —  —  —  —  5  553,661 
Other international 2  410,615  —  —  1  63,653  —  —  —  —  3  474,268 
  8  1,046,297  3  176,820  1  63,653  —  —  —  —  12  1,286,770 
Non-Manufacturing
United States 6  186,765  52  268,635  3  12,718  3  78,950  3  39,875  67  586,943 
Canada 22  472,846  5  15,028  —  —  —  —  —  —  27  487,874 
Europe 6  49,173  6  317,617  2  21,218  —  —  —  —  14  388,008 
Other international 20  159,599  4  17,627  —  —  —  —  —  —  24  177,226 
  54  868,383  67  618,907  5  33,936  3  78,950  3  39,875  132  1,640,051 
In our opinion, these properties have been well maintained, are in good operating condition and contain all necessary equipment and facilities for their intended purposes.
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Item 3. Legal Proceedings.
Discussion of legal matters is incorporated by reference to Part II, Item 8 under Note 12, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements.

Item 4. Mine Safety Disclosures.
Not applicable.

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Part II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Crane Co. common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol "CR". As of December 31, 2020, there were 1,771 holders of record of Crane Co. common stock.
Stock Performance Graph
The following chart compares the total stockholder returns (stock price increase plus reinvested dividends) on our common stock from December 31, 2015 through December 31, 2020 with the total stockholder returns for the S&P 500 Index and the S&P MidCap Capital Goods Index.  The graph assumes that the value of the investment in the common stock and each index was $100 on December 31, 2015 and that all dividends were reinvested.
CR-20201231_G1.JPG



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Purchases of Equity Securities
We did not make any open-market share repurchases of our common stock during the three months ended December 31, 2020. We routinely receive shares of our common stock as payment for stock option exercises and the withholding taxes due on stock option exercises and the vesting of restricted share units from stock-based compensation program participants.

Equity Compensation Plans
For information regarding equity compensation plans, see Item 12 of this annual report on Form 10-K.

Item 6. Selected Financial Data
Not Applicable





18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included under Item 8 of this Annual Report on Form 10-K.
We are a diversified manufacturer of highly engineered industrial products. Our business consists of four segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Our primary end markets include process industries (chemical production, oil & gas, power, and general industrial), non-residential and municipal construction, payment automation solutions, banknote design and production, aerospace, defense and space, along with a wide range of general industrial and certain consumer related end markets.
Our strategy is to grow earnings and cash flow by focusing on the manufacturing of highly engineered industrial products for specific markets where our scale is a relative advantage, and where we can compete based on our proprietary and differentiated technology, our deep vertical expertise, and our responsiveness to unique and diverse customer needs. We continuously evaluate our portfolio, pursue acquisitions that complement our existing businesses and are accretive to our growth profile, selectively divest businesses where appropriate, and pursue internal mergers to improve efficiency. We strive to foster a performance-based culture focused on productivity and continuous improvement, to attract and retain a committed management team whose interests are directly aligned with those of our shareholders, and to maintain a focused, efficient corporate structure.
We will continue to execute this strategy while remaining committed to the values of our founder, R.T. Crane, who resolved to conduct business "in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just toward employees; and to put my whole mind upon the business."
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.
This section of this Form 10-K generally discusses 2020 and 2019 items and year-to-year comparisons between 2020 and 2019. Discussions of 2018 items and year-to-year comparisons between 2019 and 2018 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2019.





























19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations — For the Years Ended December 31, 2020, 2019 and 2018
  For the year ended December 31, 2020 vs 2019
Favorable /
(Unfavorable) Change 		2019 vs 2018
Favorable /
(Unfavorable) Change
(in millions, except %) 2020 2019 2018 $ % $ %
Net sales:
Fluid Handling $ 1,005.8  $ 1,117.4  $ 1,101.8  $ (111.6) (10.0) % $ 15.6  1.4  %
Payment & Merchandising Technologies 1,104.8  1,158.3  1,257.0  (53.5) (4.6) % (98.7) (7.9) %
Aerospace & Electronics 650.7  798.8  743.5  (148.1) (18.5) % 55.3  7.4  %
Engineered Materials 175.6  208.6  243.2  (33.0) (15.8) % (34.6) (14.2) %
Total net sales $ 2,936.9  $ 3,283.1  $ 3,345.5  $ (346.2) (10.5) % $ (62.4) (1.9) %
Sales growth:
Core business $ (565.1) (17.2) % $ (13.1) (0.4) %
Foreign exchange   7.2  0.2  % (52.8) (1.6) %
Acquisitions/dispositions 211.7  6.4  % 3.5  0.1  %
Total sales growth   $ (346.2) (10.5) % $ (62.4) (1.9) %
Operating profit (loss):
Fluid Handling $ 97.7  $ 131.7  $ 118.8  $ (34.0) (25.8) % $ 12.9  10.9  %
Payment & Merchandising Technologies 100.6  177.3  186.0  (76.7) (43.3) % (8.7) (4.7) %
Aerospace & Electronics 100.7  189.4  164.2  (88.7) (46.8) % 25.2  15.3  %
Engineered Materials 22.7  26.8  37.8  (4.1) (15.3) % (11.0) (29.1) %
Corporate expense (58.8) (66.9) (65.5) 8.1  12.1  % (1.4) (2.1) %
Corporate - Asbestos provision, net —  (229.0) —  229.0  NM (229.0) NM
Corporate - Environmental provision, net —  (18.9) —  18.9  NM (18.9) NM
Total operating profit $ 262.9  $ 210.4  $ 441.3  $ 52.5  25.0  % $ (230.9) (52.3) %
Operating margin:
Fluid Handling 9.7  % 11.8  % 10.8  %
Payment & Merchandising Technologies 9.1  % 15.3  % 14.8  %
Aerospace & Electronics 15.5  % 23.7  % 22.1  %
Engineered Materials 12.9  % 12.9  % 15.5  %
Total operating margin 9.0  % 6.4  % 13.2  %
Acquisition-related and integration charges (a)
$ 12.9  $ 5.2  $ 28.9 
Restructuring and related charges, net (a)
$ 37.4  $ 29.1  $ 14.7 
(a) Acquisition-related and integration charges and restructuring and related charges, net are included in operating profit and operating margin.
20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Items Affecting Comparability of Reported Results
The comparability of our results from operations for the years ended December 31, 2020 and 2019 is affected by the following significant items:
Restructuring and Related Charges, net
In 2020, we recorded total pre-tax restructuring and related charges, net of $37.4 million primarily in response to the adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition. In 2019, we recorded total pre-tax restructuring and related charges, net of $29.1 million; $9.9 million was related to the repositioning actions initiated in December 2019 in our Fluid Handling segment, $5.9 million was related to the acquisition of Crane Currency, and $13.3 million was related to the 2017 repositioning actions. We expect annualized pre-tax savings subsequent to initiating all actions for all programs to approximate $175 million. Please refer to the individual segment discussion and analysis that follows, as well as Part II, Item 8 under Note 15, "Restructuring" in the Notes to Consolidated Financial Statements for further discussion.
Acquisition-Related and Integration Charges
During 2020 and 2019, we recorded pre-tax acquisition-related and integration charges of $12.9 million and $5.2 million, respectively. Please refer to Part II, Item 8 under Note 2, "Acquisitions" in the Notes to Consolidated Financial Statements for further discussion.
Asbestos Provision, net
In 2019, we recorded a pre-tax provision, net of insurance recoveries of $229.0 million associated with updating our estimated asbestos liability through the generally accepted end point in 2059. Please refer to Part II, Item 8 under Note 12, "Commitments and Contingencies" in the Notes to Consolidated Financial Statements for further discussion.
Environmental Provision, net
In 2019, we recorded a pre-tax provision, net of reimbursements of $18.9 million to extend accrued costs through 2027 at the former manufacturing site in Goodyear, Arizona (the "Goodyear Site"). Please refer to Note 12, "Commitments and Contingencies" in the Notes to Consolidated Financial Statements for further discussion.
OVERALL
Sales decreased by $346.2 million, or 10.5%, to $2,936.9 million in 2020. Net sales related to operations outside the United States for the years ended December 31, 2020 and 2019 was 37% and 36% of total net sales, respectively. The year-over-year lower sales included:
•a decrease in core sales of $565.1 million, or 17.2%, partially offset by
•an increase in sales related to acquisitions of $211.7 million, or 6.4%; and
•favorable foreign currency translation of $7.2 million, or 0.2%.
Operating profit increased by $52.5 million, or 25.0%, to $262.9 million in 2020. The increase in operating profit reflected the absence of the $229.0 million asbestos provision, net and the $18.9 million environmental provision, net, together with lower corporate costs. These increases were largely offset by lower operating profit in each of our segments. Operating profit in 2020 included restructuring and related charges, net of $37.4 million and acquisition-related and integration charges of $12.9 million. Operating profit in 2019 also included restructuring and related charges, net of $29.1 million and acquisition-related and integration charges of $5.2 million.


21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Comprehensive income
(in millions) For the year ended December 31, 2020 2019 2018
Net income before allocation to noncontrolling interests $ 181.1  $ 133.6  $ 335.5 
Other comprehensive income (loss), net of tax
Currency translation adjustment 70.4  11.5  (41.6)
Changes in pension and postretirement plan assets and benefit obligation, net of tax (53.6) (47.7) (26.2)
Other comprehensive income (loss), net of tax 16.8  (36.2) (67.8)
Comprehensive income before allocation to noncontrolling interests 197.9  97.4  267.7 
Less: Noncontrolling interests in comprehensive income (0.5) (0.1) (0.3)
Comprehensive income attributable to common shareholders $ 198.4  $ 97.5  $ 268.0 
For the year ended December 31, 2020, comprehensive income before allocation to noncontrolling interests was $197.9 million compared to $97.4 million in 2019. The $100.5 million increase was primarily driven by a $58.9 million favorable impact of foreign currency translation adjustments year-over-year including fluctuations in the British pound, Canadian dollar, euro and Japanese yen; and $47.5 million of higher net income before allocation to noncontrolling interests. These increases were partially offset by a $5.9 million decrease due to changes in pension and postretirement plan assets and benefit obligations.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FLUID HANDLING
(in millions, except %) For the year ended December 31, 2020 2019 2018
Net sales by product line:
Process Valves and Related Products $ 631.6  $ 685.1  $ 685.4 
Commercial Valves 286.3  332.1  325.4 
Pumps and Systems 87.9  100.2  91.0 
Total net sales $ 1,005.8  $ 1,117.4  $ 1,101.8 
Operating profit $ 97.7  $ 131.7  $ 118.8 
Acquisition-related and integration charges (a)
$ 6.3  $ 0.6  $ — 
Restructuring and related charges, net (a)
$ 10.5  $ 19.2  $ 10.0 
Assets $ 1,106.1  $ 941.6  $ 878.2 
Backlog $ 313.4  $ 267.0  $ 279.6 
Operating margin 9.7  % 11.8  % 10.8  %
(a) Acquisition-related and integration charges and restructuring and related charges, net are included in operating profit and operating margin.
Fluid Handling sales decreased by $111.6 million, or 10.0%, to $1,005.8 million, driven by lower core sales of $165.6 million, or 14.9%, partially offset by a benefit from the acquisition of I&S of $53.2 million, or 4.8%, and favorable foreign currency translation of $0.8 million, or 0.1%.
•Sales of Process Valves and Related Products decreased by $53.5 million, or 7.8%, to $631.6 million in 2020. The decrease reflected lower core sales of $108.5 million, or 15.9%, partially offset by a benefit from the acquisition of I&S of $53.2 million, or 7.8%, and favorable foreign currency translation of $1.8 million, or 0.3%, as the euro strengthened against the U.S. dollar. The core sales decline reflected a broad-based decline in demand related largely to impacts from COVID-19.
•Sales of Commercial Valves decreased by $45.8 million, or 13.8%, to $286.3 million in 2020, primarily driven by a core sales decline of $44.9 million, or 13.5%, and unfavorable foreign currency translation of $0.9 million, or 0.3%, as the Canadian dollar weakened against the U.S. dollar. The core sales decline reflected a broad-based decline in demand related to COVID-19 across all geographies.
•Sales of Pumps and Systems decreased by $12.3 million, or 12.3%, to $87.9 million in 2020. The decrease primarily reflected lower sales to military, industrial, and non-residential construction markets, partially offset by a slight increase in municipal sales.
Fluid Handling operating profit decreased by $34.0 million, or 25.8%, to $97.7 million in 2020. The decrease primarily reflected the impact from lower sales volume, partially offset by productivity, COVID-19 related cost reduction actions and repositioning savings.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAYMENT & MERCHANDISING TECHNOLOGIES
(in millions, except %) For the year ended December 31, 2020 2019 2018
Net sales by product line:
Payment Acceptance and Dispensing Products (a)
$ 670.8  $ 805.5  $ 798.8 
Banknotes and Security Products 434.0  352.8  458.2 
Total net sales $ 1,104.8  $ 1,158.3  $ 1,257.0 
Operating profit $ 100.6  $ 177.3  $ 186.0 
Acquisition-related and integration charges (b)
$ 6.5  $ 2.4  $ 28.9 
Restructuring and related charges, net (b)
$ 19.8  $ 7.6  $ 3.7 
Assets $ 2,215.3  $ 2,303.4  $ 2,074.4 
Backlog $ 347.6  $ 311.4  $ 331.5 
Operating margin 9.1  % 15.3  % 14.8  %
(a) As a result of an internal merger of the CMS business into the vending vertical of the CPI business, Payment Acceptance and Dispensing Products now includes Merchandising Equipment. Prior periods have been reclassified to conform to the current year presentation.
(b) Acquisition-related and integration charges and restructuring and related charges, net are included in operating profit and operating margin.
Payment & Merchandising Technologies sales decreased $53.5 million, or 4.6%, to $1,104.8 million in 2020, reflecting lower core sales of $218.3 million, or 18.9%, partially offset by a benefit from the acquisition of Cummins-Allison of $158.6 million, or 13.7%, and favorable foreign currency translation of $6.2 million, or 0.5%.
•Sales of Payment Acceptance and Dispensing Products decreased $134.7 million, or 16.7%, to $670.8 million in 2020. The decrease reflected lower core sales of $295.1 million, or 36.6%, partially offset by a benefit from the acquisition of Cummins-Allison of $158.6 million, or 19.7%, and favorable foreign currency translation of $1.8 million, or 0.2%, as the Japanese yen strengthened against the U.S. dollar . The core sales decrease reflected lower sales to all vertical markets driven primarily by COVID-19 related demand impacts.
•Sales of Banknotes and Security Products increased $81.2 million, or 23.0%, to $434.0 million in 2020. The increase reflected higher core sales of $76.8 million, or 21.8%, and favorable foreign currency translation of $4.4 million, or 1.3%, as the euro strengthened against the U.S. dollar. The core sales increase reflected higher sales to both international customers and the U.S. Government.
Payment & Merchandising Technologies operating profit decreased by $76.7 million, or 43.3%, to $100.6 million in 2020. The decrease was driven primarily by the impact from lower sales volume, partially offset by productivity.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
AEROSPACE & ELECTRONICS
(in millions, except %) For the year ended December 31, 2020 2019 2018
Net sales by product line:
Commercial Original Equipment $ 226.4  $ 357.2  $ 343.4 
Military Original Equipment 258.7  217.2  195.7 
Commercial Aftermarket 93.0  161.4  150.5 
Military Aftermarket 72.6  63.0  53.9 
Total net sales $ 650.7  $ 798.8  $ 743.5 
Operating profit $ 100.7  $ 189.4  $ 164.2 
Restructuring and related charges, net (a)
$ 6.5  $ 2.3  $ 1.0 
Assets $ 593.9  $ 638.1  $ 603.9 
Backlog $ 491.2  $ 567.4  $ 446.6 
Operating margin 15.5  % 23.7  % 22.1  %
(a) Restructuring and related charges, net are included in operating profit and operating margin.
Aerospace & Electronics sales decreased $148.1 million, or 18.5%, to $650.7 million in 2020. The commercial market and military market accounted for 49% and 51%, respectively, of total segment sales in 2020. Sales to OEM and aftermarket customers in 2020 were 75% and 25% of total sales, respectively.
•Sales of Commercial Original Equipment decreased by $130.8 million, or 36.6%, to $226.4 million in 2020, primarily reflecting lower aircraft build rates as a result of COVID-19, and to a lesser extent, the impact of Boeing’s 737 MAX production pause.
•Sales of Military Original Equipment increased by $41.5 million, or 19.1%, to $258.7 million in 2020, primarily reflecting broad-based military demand strength across solutions.
•Sales of Commercial Aftermarket decreased by $68.4 million, or 42.4%, to $93.0 million in 2020, primarily reflecting lower sales of commercial spares, and to a lesser extent, lower repair and overhaul sales, as airlines reduced flight schedules in response to COVID-19.
•Sales of Military Aftermarket increased by $9.6 million, or 15.2%, to $72.6 million in 2020, primarily reflecting broad-based military demand strength across solutions.
Aerospace & Electronics operating profit decreased by $88.7 million, or 46.8%, to $100.7 million in 2020, primarily reflecting the impact from lower sales volume, partially offset by productivity, COVID-19 related cost reduction actions and repositioning savings.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ENGINEERED MATERIALS
(in millions, except %) For the year ended December 31, 2020 2019 2018
Net sales by product line:
FRP- Recreational Vehicles $ 68.9  $ 84.5  $ 119.0 
FRP- Building Products 83.1  91.9  92.2 
FRP- Transportation 23.6  32.2  32.0 
Total net sales $ 175.6  $ 208.6  $ 243.2 
Operating profit $ 22.7  $ 26.8  $ 37.8 
Restructuring and related charges (a)
$ 0.6  $ —  $ — 
Assets $ 217.3  $ 219.6  $ 222.1 
Backlog $ 12.8  $ 9.4  $ 14.9 
Operating margin 12.9  % 12.9  % 15.5  %
(a) Restructuring and related charges are included in operating profit and operating margin.
Engineered Materials sales decreased by $33.0 million, or 15.8%, to $175.6 million in 2020.
•Sales of FRP panels to RV manufacturers decreased by $15.6 million, or 18.5%, to $68.9 million in 2020, reflecting lower RV industry production rates.
•Sales of FRP to building products customers decreased $8.8 million, or 9.6%, to $83.1 million in 2020, reflecting lower demand from customers, particularly restaurants, due to the impact of COVID-19.
•Sales of FRP to transportation customers decreased $8.6 million, or 26.7%, to $23.6 million in 2020, primarily reflecting lower trailer industry production rates.
Engineered Materials operating profit decreased by $4.1 million, or 15.3%, to $22.7 million in 2020, primarily reflecting the impact from the lower sales volume, partially offset by productivity.
CORPORATE
(in millions) For the year ended December 31, 2020 2019 2018
Corporate expense $ (58.8) $ (66.9) $ (65.5)
Corporate — Asbestos provision, net —  (229.0) — 
Corporate — Environmental provision, net —  (18.9) — 
Total Corporate expense $ (58.8) $ (314.8) $ (65.5)
Acquisition-related and integration charges (a)
$ 0.1  $ 2.2  $ — 
(a) Acquisition-related and integration charges are included in Corporate expense
Total Corporate expense was lower by $256.0 million in 2020 due to the absence of a pre-tax asbestos provision, net of insurance recoveries of $229.0 million and a pre-tax environmental provision, net of reimbursements of $18.9 million. See Note 12, "Commitments and Contingencies" in the Notes to Consolidated Financial Statements for further discussion related to the asbestos and environmental provisions.
INTEREST AND MISCELLANEOUS INCOME, NET
(in millions) For the year ended December 31, 2020 2019 2018
Interest income $ 2.0  $ 2.7  $ 2.3 
Interest expense $ (55.3) $ (46.8) $ (50.9)
Miscellaneous income, net $ 14.9  $ 4.4  $ 18.7 
Interest expense increased $8.5 million, or 18.2%, primarily related to additional debt associated with the 364-Day Credit Agreement. Miscellaneous income, net increased $10.5 million, or 238.6%, primarily reflecting a higher net periodic pension benefit resulting from non-service pension cost adjustments related to a decrease in interest costs.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INCOME TAX
(in millions, except %) For the year ended December 31, 2020 2019 2018
Income before tax — U.S. $ 124.9  $ 64.0  $ 296.4 
Income before tax — non-U.S. 99.6  106.7  115.0 
Income before tax — worldwide $ 224.5  $ 170.7  $ 411.4 
Provision for income taxes $ 43.4  $ 37.1  $ 75.9 
Effective tax rate 19.3  % 21.7  % 18.4  %

Our effective tax rate is affected by a number of items, both recurring and discrete, including the amount of income we earn in different jurisdictions and their respective statutory tax rates, acquisitions and dispositions, changes in the valuation of our deferred tax assets and liabilities, changes in tax laws, regulations and accounting principles, the continued availability of statutory tax credits and deductions, and examinations initiated by tax authorities around the world. See "Application of Critical Accounting Policies" included later in this Item 7 for additional information about our provision for income taxes. A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is set forth in Part II, Item 8 under Note 9, "Income Taxes" in the Notes to Consolidated Financial Statements.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
(in millions) For the year ended December 31, 2020 2019 2018
Net cash provided by (used in):
Operating activities $ 309.5  $ 393.9  $ 413.8 
Investing activities (229.1) (221.0) (752.3)
Financing activities 55.1  (124.6) (7.9)
Effect of exchange rates on cash and cash equivalents 21.6  2.2  (16.4)
Increase (decrease) in cash and cash equivalents $ 157.1  $ 50.5  $ (362.8)

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to shareholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic and by paying dividends and/or repurchasing shares.
Our current cash balance, together with cash we expect to generate from future operations along with our commercial paper program or borrowings available under our revolving credit facility, is expected to be sufficient to finance our short- and long-term capital requirements, as well as to fund payments associated with our asbestos and environmental liabilities and expected pension contributions. In addition, we believe our investment grade credit ratings afford us adequate access to public and private debt markets. At the end of 2020, we had more than $1.1 billion in available liquidity.
On April 16, 2020, to enhance financial flexibility and maintain maximum liquidity in response to the uncertainty in the global markets resulting from the COVID-19 pandemic, we entered into a senior unsecured 364-day credit facility (the “364-Day Credit Agreement”). We borrowed term loans denominated in dollars in an aggregate principal amount equal to $300 million, and term loans denominated in euros in an aggregate principal amount equal to €40 million under the 364-Day Credit Agreement. When our term loan matures in April 2021, we expect to repay it with cash on hand and issuance of commercial paper.
Operating Activities
Cash provided by operating activities, a key source of our liquidity, was $309.5 million in 2020, compared to $393.9 million in 2019. The decrease in cash provided by operating activities was primarily driven by lower operating results, partially offset by lower working capital levels. Net asbestos-related payments in 2020 and 2019 were $31.1 million and $41.5 million, respectively. In 2021, we expect to make payments related to asbestos settlement and defense costs, net of related insurance recoveries, of approximately $45 million.
Investing Activities
Cash flows relating to investing activities consist primarily of cash used for acquisitions, capital expenditures and cash provided by divestitures of businesses or assets. Cash used for investing activities was $229.1 million in 2020, compared to $221.0 million in 2019. The increase in cash used for investing activities was driven by net cash used to purchase marketable securities of $30 million and higher cash paid for acquisitions, partially offset by lower capital expenditures resulting from deferring certain capital expenditures in response to the COVID-19 pandemic. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information systems. We expect capital expenditures of approximately $75 million in 2021.
Financing Activities
Financing cash flows consist primarily of dividend payments to shareholders, share repurchases, repayments of indebtedness, proceeds from the issuance of long-term debt and commercial paper and proceeds from the issuance of common stock. Cash provided by financing activities was $55.1 million in 2020, compared to cash used for financing activities of $124.6 million in 2019. The increase in cash provided by financing activities was driven by $343.9 million of borrowings under the 364-day credit facility, partially offset by $122.2 million of net repayments of commercial paper in 2020 compared to $149.4 million of net proceeds of commercial paper in 2019 and the absence of $103.4 million repayment of the amount that was due under the syndicated loan facility and the building loan facility which we assumed as part of the Crane Currency acquisition.
Financing Arrangements
Total debt was $1,218.6 million and $991.4 million as of December 31, 2020 and 2019, respectively. Our indebtedness as of December 31, 2020 was as follows:
•$27.2 million of commercial paper;
•$348.5 million under the 364-Day Credit Agreement;
•$299.1 million of 4.45% notes due 2023;
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
•$198.4 million of 6.55% notes due 2036; and
•$346.2 million of 4.20% notes due 2048.
As of December 31, 2020, our total debt to total capitalization ratio was 44.4%, computed as follows:
(in millions)
Short-term borrowings $ 375.7 
Long-term debt 842.9 
Total indebtedness $ 1,218.6 
Total shareholders’ equity 1,528.9 
Capitalization $ 2,747.5 
Total indebtedness to capitalization 44.4  %
See Part II, Item 8 under Note 13, “Financing,” in the Notes to Consolidated Financial Statements for details regarding our financing arrangements.
Credit Ratings
As of December 31, 2020, our senior unsecured debt was rated BBB by S&P Global Ratings with a Negative outlook and Baa2 with a Stable outlook by Moody’s Investors Service. We believe that these ratings afford us adequate access to the public and private debt markets.
Contractual Obligations
Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under our long-term debt agreements and rent payments required under operating lease agreements. The following table summarizes our fixed cash obligations as of December 31, 2020:
  Payment due by Period
(in millions) Total 2021 2022
-2023 		2024
-2025 		2026 and after
Debt (a)
$ 1,226.4  $ 376.4  $ 300.0  $ —  $ 550.0 
Fixed interest payments 647.4  41.2  81.7  55.6  468.9 
Operating lease payments 145.4  26.9  40.9  25.2  52.4 
Purchase obligations 114.6  109.4  5.2  —  — 
Pension and postretirement benefits (b)
573.8  53.8  109.9  115.4  294.7 
Other long-term liabilities reflected on Consolidated Balance Sheets (c)
—  —  —  —  — 
Total $ 2,707.6  $ 607.7  $ 537.7  $ 196.2  $ 1,366.0 
(a) Debt includes commercial paper, borrowings under 364-Day Credit Agreement and scheduled principal payments.
(b) Pension benefits are funded by the respective pension trusts. The postretirement benefit component of the obligation is approximately $2.4 per year for which there is no
trust and will be directly funded by us. Pension benefits are included through 2029.
(c) As the timing of future cash outflows is uncertain, the following long-term liabilities (and related balances) are excluded from the above table: Long-term asbestos liability
($603.6), long-term environmental liability ($29.4) and gross unrecognized tax benefits ($34.0) and related gross interest and penalties ($7.5).
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Structure
The following table sets forth our capitalization:
(in millions, except %) December 31, 2020 2019
Short-term borrowings $ 375.7  $ 149.4 
Long-term debt 842.9  842.0 
Total debt 1,218.6  991.4 
Less cash and cash equivalents 551.0  393.9 
Net debt (a)
667.6  597.5 
Equity 1,531.1  1,476.3 
Net capitalization (a)
$ 2,198.7  $ 2,073.8 
Net debt to equity (a)
43.6  % 40.5  %
Net debt to net capitalization (a)
30.4  % 28.8  %
(a)
Net debt, a non-GAAP measure, represents total debt less cash and cash equivalents. Net debt is comprised of components disclosed above which are presented on our Consolidated Balance Sheets. We report our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP). However, management believes that certain non-GAAP financial measures, which include the presentation of net debt, provide useful information about our ability to satisfy our debt obligation with currently available funds. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating our performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, our reported results prepared and presented in accordance with U.S. GAAP.
In 2020, equity increased $54.8 million as a result of net income before allocation to noncontrolling interests of $181.1 million, the impact of equity-based awards and related settlement activities of $27.3 million and currency translation adjustment of $70.4 million. These increases were partially offset by cash dividends of $100.4 million, share repurchases of $70.0 million and changes in pension and post retirement plan assets and benefit obligations, net of tax of $53.6 million.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OUTLOOK
Overall
Our sales depend heavily on industries that are cyclical in nature or are subject to market conditions which may cause customer demand for our products to be volatile and unpredictable. Demand in these industries is affected by fluctuations in domestic and international economic conditions, as well as currency fluctuations, commodity costs, and a variety of other factors.
For 2021, we expect a total year-over-year sales increase of approximately 4%, driven by low-single digit core growth, a 1% to 2% benefit from favorable foreign exchange, and a slight acquisition benefit. We expect an improvement in operating profit of more than 50%, driven by a combination of restructuring and acquisition related charges recorded in 2020 that will not repeat in 2021, operating leverage on higher volumes, and productivity and repositioning savings.
Fluid Handling
In 2021, we expect Fluid Handling sales to increase in the low to mid-single digit range compared to 2020, driven by favorable foreign exchange of approximately 2%, a slight increase in core sales, and a small contribution from the I&S acquisition.
We expect Process Valves and Related Products sales to increase in the mid-single digit range compared to 2020, driven by low-single digit core sales growth, a small benefit from the I&S acquisition, and slightly favorable foreign exchange. We expect Commercial Valves sales to be approximately flat compared to 2020, driven by a low to mid-single digit benefit from favorable foreign exchange largely offset by a decline in core sales. We expect Pumps and Systems sales to increase in the low-single digit range compared to 2020, driven by growth in the military and U.S. municipal markets.
We expect an improvement in the segment’s operating profit and operating margin compared to 2020, driven by strong productivity, lower restructuring and acquisition related charges, and repositioning savings.
Payment & Merchandising Technologies
In 2021, we expect Payment & Merchandising Technologies sales to increase in the high-single digit range compared to 2020, driven primarily by mid-single digit core sales growth, and a low-single digit benefit from favorable foreign exchange.
At Crane Payment Innovations, we expect core sales growth in the mid-single digit range, driven by broad-based strength across vertical markets. At Crane Currency, we expect core sales to increase in the high-single digit range compared to 2020.
We expect the segment’s operating profit to increase substantially compared to 2020, driven by the impact from the higher sales volume, favorable product mix, productivity and repositioning savings, and lower restructuring and acquisition-related costs.
Aerospace & Electronics
In 2021, we expect Aerospace & Electronics core sales to decline in the high-single digit range compared to 2020. We expect a decline in our commercial OEM business driven by lower aircraft build rates, and we expect a decline in our commercial aftermarket business given continued weakness in airline flight hours due to the impacts of COVID-19. We expect a decline in our defense OEM and aftermarket businesses given very challenging comparisons to 2020 where these markets exhibited very strong growth. We expect segment operating profit and operating margin to decrease compared to 2020 driven primarily by the impact of the lower sales volume, partially offset by improved productivity, repositioning savings, and lower restructuring and related costs.
Engineered Materials
In 2021, we expect the Engineered Materials segment sales to increase approximately 20% compared to 2020 driven primarily by substantially stronger recreational vehicle industry build rates, higher trailer industry build rates, a recovery in certain building products end markets, and share gain initiatives. Segment operating profit and operating margin are expected to increase compared to 2020 driven primarily by the impact of the higher sales volume.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. Our significant accounting policies are more fully described in Part II, Item 8 under Note 1, “Nature of Operations and Significant Accounting Policies” in the Notes to Consolidated Financial Statements. Certain accounting policies require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. On an ongoing basis, we evaluate our estimates and assumptions, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary. The accounting policies described below are those that most frequently require us to make estimates and judgments and, therefore, are critical to understanding our results of operations. We have discussed the development and selection of these accounting estimates and the related disclosures with the Audit Committee of our Board of Directors.

Revenue Recognition. In accordance with Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers,” we recognize revenue when control of the promised goods or services in a contract transfers to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We account for a contract when both parties have approved and committed to the terms, each party’s rights and payment obligations under the contract are identifiable, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration.
We primarily generate revenue through the manufacture and sale of engineered industrial products. 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. Control of products generally transfers to the customer at a point in time, as the customer does not control the products as they are manufactured. We exercise judgment and consider the timing of right to payment, transfer of risk and rewards, transfer of title, transfer of physical possession, and customer acceptance when determining when control transfers to the customer. As a result, revenue from the sale of products is generally recognized at a point in time - either upon shipment or delivery - based on the specific shipping terms in the contract.
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. We exercise judgment to determine whether the products have an alternative use to us. When an alternative use does not exist for these products and we are entitled to payment for performance completed to date which includes a reasonable profit margin, revenue is recognized over time. When a contract with the U.S. government or subcontract for the U.S. government contains clauses indicating that the U.S. government owns any work-in-progress as the contracted product is being built, revenue is recognized over time. The measure of progress applied by us is the cost-to-cost method as this provides the most faithful depiction of the pattern of transfer of control. Under this method, we measure progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation. 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 with, and thereby depicts, the transfer of control to the customer. Total revenue recognized and cost estimates are updated on a monthly basis.
Income Taxes.  We account for income taxes in accordance with ASC Topic 740 “Income Taxes” (“ASC 740”), which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.
Based on consideration of all available evidence regarding their utilization, we record net deferred tax assets to the extent that it is more likely than not that they will be realized. 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 our 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, 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.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position. 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 the Consolidated Statement of Operations, while accrued interest and penalties are included within the related tax liability line of the Consolidated Balance Sheets.
Goodwill and Other Intangible Assets.  As of December 31, 2020, we had $1,609.0 million of goodwill and $520.3 million of net intangible assets, of which $70.9 million were intangibles with indefinite useful lives, consisting of trade names.
During 2020, we observed a significant decline in the market valuation of our common shares as a result of the COVID-19 pandemic. As such, we performed sensitivity analyses based on more recent assumptions, including entity-specific and macroeconomic factors resulting from the COVID-19 pandemic during the interim periods. We concluded that it was not more likely than not that the fair values of the reporting units and indefinite-lived intangible assets were below their carrying values. We also performed our annual impairment assessment (as described below) and concluded that no impairment charges have been required during 2020.
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. 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 events or circumstances which would more likely than not reduce the fair value of our reporting units below its carrying value. 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, 2020, we had seven 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 10.5%), 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. The determination of discounted cash flows is 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 best estimates based on current and forecasted market conditions. 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 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. Furthermore, in order to evaluate the sensitivity of the fair value calculations on the goodwill impairment test, we applied a hypothetical, reasonably possible 10% decrease to the fair values of each reporting unit. The effects of this hypothetical 10% decrease would still result in a fair value calculation exceeding our carrying value for each of our reporting units. No impairment charges have been required during 2020, 2019 or 2018.
Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value. Fair value is calculated using relief from royalty method. 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
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 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. We believe there have been no events or circumstances which would more likely than not reduce the fair value of our indefinite-lived or definite-lived intangible assets below their carrying value.
Asbestos Liability and Related Insurance Coverage and Receivable.  We retained an independent actuarial firm to assist management in estimating our asbestos liability in the tort system. The actuarial consultants review information provided by us concerning claims filed, settled and dismissed, amounts paid in settlements and relevant claim information such as the nature of the asbestos-related disease asserted by the claimant, the jurisdiction where filed and the time lag from filing to disposition of the claim. The methodology used by the actuarial consultants to project future asbestos costs is based on our recent historical experience for claims filed, settled and dismissed during a base reference period. Our experience is then compared to estimates of the number of individuals likely to develop asbestos-related diseases determined based on widely used previously conducted epidemiological studies augmented with current data inputs. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, the actuarial consultants estimate the number of future claims that would be filed against us and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for the costs of defending asbestos claims in the tort system using a forecast from us which is based upon discussions with our defense counsel. Based on this information, the actuarial consultants compile an estimate of our asbestos liability for pending and future claims using a range of reference periods based on claim experience and covering claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against us, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against us and (4) the aggregate defense costs incurred by us. These factors are interdependent, and no one factor predominates in determining the liability estimate. These factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, we continue to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.
With the assistance of our actuarial consultants, effective as of December 31, 2019, we updated our estimate of the asbestos liability, including the costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against us through 2059. Our estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from our experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, we recorded an additional liability of $255 million (an aggregate asbestos liability of $712 million) as of December 31, 2019. Estimation of our exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution.
Management has made its best estimate of the costs through 2059. Through December 31, 2020, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in
34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
our liability estimate. In addition to this claims experience, we considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, we determined that no change in the estimate was warranted for the period ended December 31, 2020. The liability was $670 million as of December 31, 2020.
In conjunction with developing the aggregate liability estimate referenced above, we also developed an estimate of probable insurance recoveries for our asbestos liabilities. In developing this estimate, we considered our coverage-in-place and other settlement agreements, as well as a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. As of December 31, 2020 and 2019, we had an aggregate asbestos insurance receivable of $87 million and $98 million, respectively.
Environmental.  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, 2020 is substantially all for the former manufacturing site in Goodyear, Arizona (the "Goodyear Site"). Estimates of our environmental liabilities at the Goodyear Site are based on currently available facts, present laws and regulations and current technology available for remediation, and are recorded on an undiscounted basis. These estimates consider our prior experience in the Goodyear Site investigation and remediation, as well as available data from, and in consultation with, our environmental specialists. Estimates at the Goodyear Site are subject to significant uncertainties caused primarily by the dynamic nature of the Goodyear Site conditions, the range of remediation alternatives available, together with the corresponding estimates of cleanup methodology and costs, as well as ongoing, required regulatory approvals, primarily from the EPA. During the fourth quarter of 2019, we received conceptual agreement from the EPA on an alternative remediation strategy which is expected to further reduce the contaminant plume. Accordingly, 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 $39.8 million and $46.9 million as of December 31, 2020 and 2019, respectively.
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. We have recorded a receivable of $7.8 million and $9.7 million for the expected reimbursements from the U.S. Government in respect of the aggregate liability as of December 31, 2020 and 2019, respectively.
Pension Plans.  In the United States, we sponsor a defined benefit pension plan that covers approximately 18% of all U.S. employees. 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 10% of all non-U.S. employees. 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.
The expected return on plan assets component of net periodic benefit cost is determined by applying the assumed expected return on plan assets to the fair value of plan assets. For one of the U.K. pension plans, a market-related value of assets is used in lieu of the fair value of plan assets for this purpose. The net actuarial loss (gain) is amortized to the extent that it exceeds 10% of the greater of the fair value of plan assets and the projected benefit obligation. The amortization period is the average life expectancy of plan participants for most plans. The amortization period for plans with a significant number of active participants accruing benefits is the average future working lifetime of plan participants. The prior service cost (credit) is amortized over the average future working lifetime of plan participants whose prior service benefits were changed.
The net periodic pension benefit was $6.8 million, $0.6 million and $15.3 million in 2020, 2019 and 2018, respectively. The net periodic pension benefit was $6.2 million higher in 2020 compared to 2019, driven by lower interest costs for both U.S. and non U.S. plans. Employer cash contributions were $26.1 million, $4.2 million and $57.5 million (includes a $28 million discretionary contribution) in 2020, 2019 and 2018, respectively.
Holding all other factors constant, a decrease in the expected long-term rate of return on plan assets by 0.25 percentage points would have increased 2020 pension expense by $1.1 million for U.S. pension plans and $1.2 million for non-U.S. pension plans. Also, holding all other factors constant, a decrease in the discount rate used to determine net periodic pension cost by 0.25 percentage points would have increased 2020 pension expense by $0.1 million for U.S. pension plans and $0.7 million for non-U.S. pension plans.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The weighted average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:
  Pension Benefits
For the year ended December 31, 2020 2019 2018
Benefit Obligations
U.S. Plans:
Discount rate 2.62  % 3.34  % 4.36  %
Rate of compensation increase N/A N/A N/A
Interest credit rate 0.93  % 2.83  % 2.40  %
Non-U.S. Plans:
Discount rate 1.07  % 1.70  % 2.42  %
Rate of compensation increase 3.10  % 2.89  % 3.06  %
Interest credit rate 0.29  % 0.22  % 0.84  %
Net Periodic Benefit Cost
U.S. Plans:
Discount rate 3.34  % 4.36  % 3.75  %
Expected rate of return on plan assets 7.25  % 7.25  % 7.75  %
Rate of compensation increase N/A N/A N/A
Interest credit rate 2.83  % 2.40  % 2.49  %
Non-U.S. Plans:
Discount rate 1.70  % 2.42  % 2.15  %
Expected rate of return on plan assets 5.31  % 5.34  % 6.49  %
Rate of compensation increase 2.89  % 3.06  % 2.80  %
Interest credit rate 0.22  % 0.84  % 0.66  %
The long-term expected rate of return on plan assets assumptions were determined with input from independent investment consultants and plan actuaries, utilizing asset pricing models and considering historic returns. The discount rates we used 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 obligation.
Recent Accounting Pronouncements
Information regarding new accounting pronouncements is included in Part II, Item 8 under Note 1 to the Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Our cash flows and earnings are subject to fluctuations from changes in interest rates and foreign currency exchange rates. We manage our exposures to these market risks through internally established policies and procedures and, when deemed appropriate, through the use of interest-rate swap agreements and forward exchange contracts. We do not enter into derivatives or other financial instruments for trading or speculative purposes.
Total debt outstanding was $1,218.6 million as of December 31, 2020, which was at fixed rates of interest ranging from 4.20% to 6.55%.
The following is an analysis of the potential changes in interest rates and currency exchange rates based upon sensitivity analysis that models effects of shifts in rates. These are not forecasts.
•Our year-end portfolio is comprised of fixed-rate debt; therefore, the effect of a market change in interest rates would not be significant.
•Based on a sensitivity analysis as of December 31, 2020, a 10% change in the foreign currency exchange rates for the year ended December 31, 2020 would have impacted our net earnings by approximately $7.3 million, due primarily to the British pound, Canadian dollar and euro. This calculation assumes that all currencies change in the same direction and proportion relative to the U.S. dollar and there are no indirect effects, such as changes in non-U.S. dollar sales volumes or prices.
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Item 8. Financial Statements and Supplementary Data
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying consolidated financial statements of Crane 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. These statements by necessity include amounts that are based on management’s best estimates and judgments and give due consideration to materiality.
Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making its assessment, management has utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its Internal Control—Integrated Framework, released in 2013. Based on our assessment we believe that, as of December 31, 2020, 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, 2020, and issued their related attestation report which is included herein.


/s/ Max H. Mitchell
Max H. Mitchell
President and Chief Executive Officer
(Principal Executive Officer)

/s/ Richard A. Maue
Richard A. Maue
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, 2020.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Crane Co.
Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Crane Co. and subsidiaries (the "Company") as of December 31, 2020 and 2019, 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, 2020, 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, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, 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, 2020, 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 23, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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.
Asbestos Liability - Refer to Note 12, Commitments and Contingencies, to the financial statements
Critical Audit Matter Description
The Company is a defendant in cases filed in numerous state and federal courts alleging injury or death of exposure to asbestos. The Company records an estimated liability related to the resolution cost of pending and future claims projected to be filed against the Company for which management believes are probable of occurring and reasonably estimable. The model utilized by the Company to estimate its asbestos liability has several factors that involve the application of significant judgement and estimates with a significant measurement of uncertainty. The most significant factors affecting the asbestos liability are (1) the number of new mesothelioma claims filed against the Company, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against the Company and (4) the aggregate defense costs incurred by the Company. These factors are interdependent, and no one factor predominates in determining the liability estimate. Changes in these estimates and assumptions could have a significant impact on the asbestos liability. The current and non-current liability as of December 31, 2020 was $66.5 million and $603.6 million, respectively.
38

Given the subjectivity of estimating the asbestos liability, future claims, and underlying assumptions utilized by management, auditing management’s judgments regarding the significant factors listed above involved especially subjective auditor judgment, including the need to involve our actuarial specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures performed on the recorded asbestos liability included the following, among others:
•We tested the design and effectiveness of controls over the asbestos liability, including those over the projection of settlement value of current and future claims.
•We obtained the System and Organization Control Report (SOC) 1 reports for the outside service providers to evaluate the processes and controls relevant to the Company’s asbestos claims administration.
•With the assistance of our internal actuarial specialists, we:
•Evaluated the reasonableness of the underlying methodology for estimating the liability.
•Tested the completeness and accuracy of underlying source data that served as the basis for the actuarial analysis and estimates to the underlying source database, including historical claims, to test that the inputs to the actuarial estimate were reasonable.
•Compared management’s prior-year assumptions of expected development and ultimate loss to actual incurred during the current year to identify potential bias in the determination of the liability.
•Developed a range of independent estimates based on loss information and historical and industry claim development factors and compared our estimates to the Company’s estimates.
•We considered the impact of changes in the regulatory and litigation environments on management’s assumptions by performing corroborating inquires with the Company’s internal and external legal counsel.
•We evaluated management’s ability to accurately estimate the future liability by comparing actual results to management’s historical estimates.
•We assessed the reasonableness of the forecast period used by the Company to estimate the liability.

/s/ Deloitte & Touche LLP
Stamford, Connecticut
February 23, 2021

We have served as the Company's auditor since 1979.

39

CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31,
(in millions, except per share data) 2020 2019 2018
Net sales $ 2,936.9  $ 3,283.1  $ 3,345.5 
Operating costs and expenses:
Cost of sales 1,930.7  2,104.1  2,156.2 
Selling, general and administrative 698.1  698.0  711.9 
Asbestos provision, net —  229.0  — 
Environmental provision, net —  18.9  — 
Restructuring charges, net 32.3  17.5  7.2 
Acquisition-related and integration charges 12.9  5.2  28.9 
Operating profit 262.9  210.4  441.3 
Other income (expense):
Interest income 2.0  2.7  2.3 
Interest expense (55.3) (46.8) (50.9)
Miscellaneous income, net 14.9  4.4  18.7 
(38.4) (39.7) (29.9)
Income before income taxes 224.5  170.7  411.4 
Provision for income taxes 43.4  37.1  75.9 
Net income before allocation to noncontrolling interests 181.1  133.6  335.5 
Less: Noncontrolling interest in subsidiaries’ earnings (loss) 0.1  0.3  (0.1)
Net income attributable to common shareholders $ 181.0  $ 133.3  $ 335.6 
Basic earnings per share $ 3.10  $ 2.23  $ 5.63 
Weighted average basic shares outstanding 58.3  59.8  59.6 
Diluted earnings per share $ 3.08  $ 2.20  $ 5.50 
Weighted average diluted shares outstanding 58.8  60.6  61.0 
 













See Notes to Consolidated Financial Statements
40

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the year ended December 31,
(in millions) 2020 2019 2018
Net income before allocation to noncontrolling interests $ 181.1  $ 133.6  $ 335.5 
Other comprehensive income (loss), net of tax
Currency translation adjustment 70.4  11.5  (41.6)
Changes in pension and postretirement plan assets and benefit obligation, net of tax (53.6) (47.7) (26.2)
Other comprehensive income (loss), net of tax 16.8  (36.2) (67.8)
Comprehensive income before allocation to noncontrolling interests 197.9  97.4  267.7 
Less: Noncontrolling interests in comprehensive income (0.5) (0.1) (0.3)
Comprehensive income attributable to common shareholders $ 198.4  $ 97.5  $ 268.0 



























See Notes to Consolidated Financial Statements
41

CONSOLIDATED BALANCE SHEETS
 
  Balance as of December 31,
(in millions, except shares and per share data) 2020 2019
Assets
Current assets:
Cash and cash equivalents $ 551.0  $ 393.9 
Current insurance receivable - asbestos 14.4  14.1 
Accounts receivable, net 432.7  555.1 
Inventories, net 438.2  457.3 
Other current assets 137.4  79.5 
Total current assets 1,573.7  1,499.9 
Property, plant and equipment, net 600.4  616.3 
Insurance receivable - asbestos 72.5  83.6 
Long-term deferred tax assets 14.9  35.1 
Intangible assets, net 520.3  505.1 
Goodwill 1,609.0  1,472.4 
Other assets 198.1  211.3 
Total assets $ 4,588.9  $ 4,423.7 
Liabilities and equity
Current liabilities:
Short-term borrowings $ 375.7  $ 149.4 
Accounts payable 218.4  311.1 
Current asbestos liability 66.5  65.0 
Accrued liabilities 395.9  378.2 
U.S. and foreign taxes on income 0.1  13.0 
Total current liabilities 1,056.6  916.7 
Long-term debt 842.9  842.0 
Accrued pension and postretirement benefits 329.7  298.4 
Long-term deferred tax liability 53.6  55.8 
Long-term asbestos liability 603.6  646.6 
Other liabilities 171.4  187.9 
Commitments and contingencies (Note 12)
Equity:
Preferred shares, par value 0.01; 5,000,000 shares authorized
—  — 
Common shares, par value $1.00; 200,000,000 shares authorized; 72,426,139 shares issued; 58,127,948 and 59,002,205 shares outstanding in 2020 and 2019, respectively
72.4  72.4 
Capital surplus 330.7  315.6 
Retained earnings 2,192.8  2,112.2 
Accumulated other comprehensive loss (466.4) (483.7)
Treasury stock; 14,298,191 and 13,423,934 treasury shares in 2020 and 2019, respectively
(600.6) (542.8)
Total shareholders’ equity 1,528.9  1,473.7 
Noncontrolling interest 2.2  2.6 
Total equity 1,531.1  1,476.3 
Total liabilities and equity $ 4,588.9  $ 4,423.7 
See Notes to Consolidated Financial Statements 
42

CONSOLIDATED STATEMENTS OF CASH FLOWS
For year ended December 31,
(in millions) 2020 2019 2018
Operating activities:
Net income attributable to common shareholders $ 181.0  $ 133.3  $ 335.6 
Noncontrolling interest in subsidiaries' earnings (loss) 0.1  0.3  (0.1)
Net income before allocation to noncontrolling interests $ 181.1  $ 133.6  $ 335.5 
Asbestos provision, net —  229.0  — 
Environmental provision, net —  18.9  — 
Loss on deconsolidation of joint venture —  1.2  1.7 
Realized gain on marketable securities —  (1.1) — 
Depreciation and amortization 127.5  113.5  120.0 
Stock-based compensation expense 22.3  22.3  21.6 
Defined benefit plans and postretirement credit (7.1) (0.7) (15.0)
Deferred income taxes 18.1  (25.1) 47.7 
Cash provided by (used for) operating working capital 39.1  (40.0) 16.3 
Defined benefit plans and postretirement contributions (28.4) (8.7) (59.8)
Environmental payments, net of reimbursements (4.2) (8.2) (6.3)
Asbestos related payments, net of insurance recoveries (31.1) (41.5) (63.9)
Other (7.8) 0.7  16.0 
Total provided by operating activities 309.5  393.9  413.8 
Investing activities:
Payments for acquisitions, net of cash acquired (169.5) (156.2) (648.0)
Proceeds from disposition of capital assets 4.5  3.1  1.9 
Capital expenditures (34.1) (68.8) (108.8)
Impact of deconsolidation of joint venture —  (0.2) 2.6 
Purchase of marketable securities (90.0) (8.8) — 
Proceeds from sale of marketable securities 60.0  9.9  — 
Total used for investing activities (229.1) (221.0) (752.3)
Financing activities:
Dividends paid (100.4) (93.2) (83.5)
Reacquisition of shares on open market (70.0) (79.9) (50.1)
Stock options exercised, net of shares reacquired 5.1  2.9  16.1 
Debt issuance costs (1.3) —  (5.4)
Repayment of long-term debt —  (99.4) (452.2)
Repayment of short-term debt —  (7.4) (100.0)
Proceeds from issuance of long-term debt —  3.0  567.2 
Proceeds from issuance of short-term debt —  —  100.0 
Proceeds from issuance of commercial paper with maturities greater than 90 days 251.3  25.0  — 
Repayments of commercial paper with maturities greater than 90 days (296.7) —  — 
Net (repayments) proceeds from issuance of commercial paper with maturities of 90 days or less (76.8) 124.4  — 
Proceeds from revolving credit facility 77.2  —  — 
Repayments of revolving credit facility (77.2) —  — 
Proceeds from term loan 343.9  —  — 
Total provided by (used for) financing activities 55.1  (124.6) (7.9)
Effect of exchange rates on cash and cash equivalents 21.6  2.2  (16.4)
Increase (decrease) in cash and cash equivalents 157.1  50.5  (362.8)
Cash and cash equivalents at beginning of period 393.9  343.4  706.2 
Cash and cash equivalents at end of period $ 551.0  $ 393.9  $ 343.4 
Detail of cash provided by (used for) operating working capital:
Accounts receivable $ 138.5  $ 3.8  $ 4.8 
Inventories 35.4  (8.3) (38.8)
Other current assets (5.8) (1.3) (11.4)
Accounts payable (102.6) (23.4) 37.0 
Accrued liabilities 4.8  (35.2) 40.9 
U.S. and foreign taxes on income (31.2) 24.4  (16.2)
Total $ 39.1  $ (40.0) $ 16.3 
Supplemental disclosure of cash flow information:
Interest paid $ 53.8  $ 47.4  $ 47.5 
Income taxes paid $ 46.5  $ 37.9  $ 58.4 
See Notes to Consolidated Financial Statements
43

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 
(in millions, except share data) Common
Shares
Issued at
Par Value 		Capital
Surplus 		Retained
Earnings 		Accumulated
Other
Comprehensive
Loss 		Treasury
Stock 		Total
Shareholders’
Equity 		Noncontrolling
Interest 		Total
Equity
BALANCE DECEMBER 31, 2017 72.4  $ 291.7  $ 1,813.3  $ (380.1) $ (452.1) $ 1,345.2  $ 3.3  $ 1,348.5 
Net income —  —  335.6  —  —  335.6  (0.1) 335.5 
Cash dividends ($1.40 per share)
—  —  (83.5) —  —  (83.5) —  (83.5)
Reacquisition on open market of 582,066 shares
—  —  —  —  (50.1) (50.1) —  (50.1)
Cumulative effect of adoption of ASC 606 —  —  6.7  —  —  6.7  —  6.7 
Exercise of stock options, net of shares reacquired of 449,948
—  —  —  —  24.0  24.0  —  24.0 
Stock-based compensation —  21.6  —  —  —  21.6  —  21.6 
Impact from settlement of share-based awards, net of shares acquired —  (9.8) —  —  2.0  (7.8) —  (7.8)
Changes in pension and postretirement plan assets and benefit obligation, net of tax —  —  —  (26.2) —  (26.2) —  (26.2)
Currency translation adjustment —  —  —  (41.3) —  (41.3) (0.3) (41.6)
BALANCE DECEMBER 31, 2018 72.4  $ 303.5  $ 2,072.1  $ (447.6) $ (476.2) $ 1,524.2  $ 2.9  $ 1,527.1 
Net income —  —  133.3  —  —  133.3  0.3  133.6 
Cash dividends ($1.56 per share)
—  —  (93.2) —  —  (93.2) —  (93.2)
Reacquisition on open market of 987,630 shares
—  —  —  —  (79.9) (79.9) —  (79.9)
Exercise of stock options, net of shares reacquired of 218,540
—  —  —  —  11.5  11.5  —  11.5 
Stock-based compensation —  22.3  —  —  —  22.3  —  22.3 
Impact from settlement of share-based awards, net of shares acquired —  (10.2) —  —  1.8  (8.4) —  (8.4)
Deconsolidation of a joint venture —  —  —  —  —  —  (0.5) (0.5)
Changes in pension and postretirement plan assets and benefit obligation, net of tax —  —  —  (47.7) —  (47.7) —  (47.7)
Currency translation adjustment —  —  —  11.6  —  11.6  (0.1) 11.5 
BALANCE DECEMBER 31, 2019 72.4  $ 315.6  $ 2,112.2  $ (483.7) $ (542.8) $ 1,473.7  $ 2.6  $ 1,476.3 
Net income —  —  181.0  —  —  181.0  0.1  181.1 
Cash dividends ($1.72 per share)
—  —  (100.4) —  —  (100.4) —  (100.4)
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 
Stock-based compensation —  22.3  —  —  —  22.3  —  22.3 
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 —  —  —  (53.6) —  (53.6) —  (53.6)
Currency translation adjustment —  —  —  70.9  —  70.9  (0.5) 70.4 
BALANCE DECEMBER 31, 2020 72.4  $ 330.7  $ 2,192.8  $ (466.4) $ (600.6) $ 1,528.9  $ 2.2  $ 1,531.1 










See Notes to Consolidated Financial Statements
44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Nature of Operations and Significant Accounting Policies
Nature of Operations
We are a diversified manufacturer of highly engineered industrial products comprised of four reporting segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Our primary end markets include process industries (chemical production, oil & gas, power, and general industrial), non-residential and municipal construction, payment automation solutions, banknote design and production, aerospace, defense and space, 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).
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.
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. GAAP”). The consolidated financial statements include the accounts of Crane 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 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.
Use of Estimates. These accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results may differ from those estimated. 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, asbestos liability and related insurance receivable, environmental liability and contingencies.
Currency Translation.  Assets and liabilities of subsidiaries that prepare financial statements in currencies other than the U.S. dollar are translated at the rate of exchange in effect on the balance sheet date; 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.
Revenue Recognition. In accordance with Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers,” we recognize revenue when control of the promised goods or services in a contract transfers to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We account for a contract when both parties have approved and committed to the terms, each party’s rights and payment obligations under the contract are identifiable, the contract has commercial substance, and it is probable that we will collect substantially all of the consideration. When shipping and handling activities are performed after the customer obtains control of product, we elect to account for shipping and handling as activities to fulfill the promise to transfer the product. In determining the transaction price of a contract, we exercise judgment to determine the total transaction price when it includes estimates of variable consideration, such as rebates and milestone payments. We generally estimate variable consideration using the expected value method and consider all available information (historical, current, and forecasted) in estimating these amounts. Variable consideration is only included in the transaction price to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. 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. 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. Control of products generally transfers to the customer at a point in time, as the customer does not control the products as
45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
they are manufactured. We exercise judgment and consider the timing of right to payment, transfer of risk and rewards, transfer of title, transfer of physical possession, and customer acceptance when determining when control transfers to the customer. As a result, revenue from the sale of products is generally recognized at a point in time - either upon shipment or delivery - based on the specific shipping terms in the contract. 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. We exercise judgment to determine whether the products have an alternative use to us. When an alternative use does not exist for these products and we are entitled to payment for performance completed to date which includes a reasonable profit margin, revenue is recognized over time. When a contract with the U.S. government or subcontract for the U.S. government contains clauses indicating that the U.S. government owns any work-in-progress as the contracted product is being built, revenue is recognized over time. The measure of progress applied by us is the cost-to-cost method as this provides the most faithful depiction of the pattern of transfer of control. Under this method, we measure progress by comparing costs incurred to date to the total estimated costs to provide the performance obligation. 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 with, and thereby depicts, the transfer of control to the customer. Total revenue recognized and cost estimates are updated on a monthly basis.
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. We maximize the use of observable data inputs and consider all information (including market conditions, segment-specific factors, and information about the customer or class of customer) that is reasonably available. The standalone selling price for our products and services is generally determined using an observable list price, which differs by class of customer.
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 do not offer extended payment terms. Payment is typically due within 30-90 calendar days of the respective invoice dates. Customers generally do not make large upfront payments. Any advanced payments received do not provide us with a significant benefit of financing, as the payments are meant to secure materials used to fulfill the contract, as opposed to providing us with a significant financing benefit.
When an unconditional right to consideration exists, we record these amounts as receivables. When amounts are dependent on factors other than the passage of time in order for payment from a customer to become due, we record a contract asset. 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. Contract liabilities represent advance payments from customers. Revenue related to contract liabilities is recognized when control is transferred to the customer.
We pay sales commissions related to certain contracts, which qualify as incremental costs of obtaining a contract. However, the sales commissions generally relate to contracts for products or services satisfied at a point in time or over a period of time less than one year. As a result, we apply the practical expedient that allows an entity to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less.
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. We also include costs directly associated with products sold, such as warranty provisions.
Selling, General and Administrative Expenses.  Selling, general and administrative expenses are charged to income as incurred. 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.
Income Taxes.  We account for income taxes in accordance with ASC Topic 740 “Income Taxes” (“ASC 740”) which requires an asset and liability approach for the financial accounting and reporting of income taxes. Under this method, deferred income
46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
taxes are recognized for the expected future tax consequences of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. These balances are measured using the enacted tax rates expected to apply in the year(s) in which these temporary differences are expected to reverse. The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted.
Based on consideration of all available evidence regarding their utilization, we record net deferred tax assets to the extent that it is more likely than not that they will be realized. 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, 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.
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. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation, based solely on the technical merits of the position. 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. 
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.
(in millions, except per share data) For the year ended December 31, 2020 2019 2018
Net income attributable to common shareholders $ 181.0  $ 133.3  $ 335.6 
Weighted average basic shares outstanding 58.3  59.8  59.6 
Effect of dilutive shared-based awards 0.5  0.8  1.4 
Weighted average diluted shares outstanding 58.8  60.6  61.0 
Basic earnings per share $ 3.10  $ 2.23  $ 5.63 
Diluted earnings per share $ 3.08  $ 2.20  $ 5.50 
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 2020, 2019 and 2018, the number of stock options excluded from the computation was 2.1 million, 1.2 million and 0.4 million, respectively.
Cash and Cash Equivalents.  Cash and cash equivalents include highly liquid investments with original maturities of three months or less that are readily convertible to cash and are not subject to significant risk from fluctuations in interest rates. As a result, the carrying amount of cash and cash equivalents approximates fair value.
Accounts Receivable, Net.  Accounts receivable are carried at net realizable value. The allowance for doubtful accounts was $10.9 million and $7.2 million as of December 31, 2020 and 2019, respectively. The allowance for doubtful accounts activity was not material to our financial results for the years ended December 31, 2020 and 2019. 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. We periodically evaluate the financial strength of our customers and believe that our credit risk exposure is limited.
47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventories, net.  Inventories consist of the following:
(in millions) December 31, 2020 2019
Finished goods $ 130.5  $ 130.6 
Finished parts and subassemblies 54.5  66.1 
Work in process 45.2  47.7 
Raw materials 208.0  212.9 
Total inventories, net $ 438.2  $ 457.3 
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 $2.3 million and $6.7 million for the years ended December 31, 2020 and 2019, respectively, and reduced cost of sales by $2.5 million for the year ended December 31, 2018. The portion of inventories costed using the LIFO method was 30.7% and 27.7% of consolidated inventories as of December 31, 2020 and 2019, respectively. If inventories that were valued using the LIFO method had been valued under the FIFO method, they would have been higher by $26.8 million and $17.1 million as of December 31, 2020 and 2019, respectively. The reserve for excess and obsolete inventory was $95.8 million and $85.9 million as of December 31, 2020 and 2019, respectively.
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. 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. 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.
Property, Plant and Equipment, net.  Property, plant and equipment, net consists of the following: 
(in millions) December 31, 2020 2019
Land $ 88.5  $ 84.4 
Buildings and improvements 289.6  282.6 
Machinery and equipment 917.7  889.9 
Gross property, plant and equipment 1,295.8  1,256.9 
Less: accumulated depreciation 695.4  640.6 
Property, plant and equipment, net $ 600.4  $ 616.3 
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 $77.2 million, $71.6 million and $72.7 million for the years ended December 31, 2020, 2019 and 2018, respectively.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Goodwill and Other Intangible Assets.  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. Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a potential impairment. During 2020, we observed a significant decline in the market valuation of our common shares as a result of the COVID-19 pandemic. As such, we performed sensitivity analyses based on more recent assumptions, including entity-specific and macroeconomic factors resulting from the COVID-19 pandemic during the interim periods. We concluded that it was not more likely than not that the fair values of the reporting units and indefinite-lived intangible assets were below their carrying values. We also performed our annual impairment assessment (as described below) and concluded that no impairment charges have been required during 2020. 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. 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, 2020, we had seven 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 10.5%), 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. The determination of discounted cash flows is 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 best estimates based on current and forecasted market conditions. 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 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 2020, 2019 or 2018.
Changes to goodwill are as follows:
(in millions) Fluid Handling Payment & Merchandising Technologies Aerospace & Electronics Engineered Materials Total
Balance as of December 31, 2018 $ 240.8  $ 789.2  $ 202.4  $ 171.3  $ 1,403.7 
Additions —  63.4  —  —  63.4 
Currency translation 0.1  5.2  —  —  5.3 
Balance as of December 31, 2019 $ 240.9  $ 857.8  $ 202.4  $ 171.3  $ 1,472.4 
Additions 106.1  —  —  —  106.1 
Adjustments to purchase price allocations —  5.6  —  —  5.6 
Currency translation 13.0  11.8  0.1  —  24.9 
Balance as of December 31, 2020 $ 360.0  $ 875.2  $ 202.5  $ 171.3  $ 1,609.0 
For the year ended December 31, 2020, additions to goodwill within the Fluid Handling segment were $106.1 million. These additions represent the preliminary purchase price allocation for the acquisition of CIRCOR International, Inc.’s Instrumentation & Sampling Business (“I&S”). For the year ended December 31, 2020, adjustments to goodwill within the Payment & Merchandising Technologies segment were $5.6 million. These adjustments represent the finalization of the purchase price allocation for the acquisition of Cummins-Allison Corp. ("Cummins-Allison").
49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the year ended December 31, 2019, additions to goodwill within the Payment & Merchandising Technologies segment were $63.4 million. These additions represent the preliminary purchase price allocation related to the acquisition of Cummins-Allison of $54.7 million and the finalization of the purchase price allocation of the January 2018 acquisition of Crane & Co., Inc. (“Crane Currency”) of $8.7 million.
See discussion in Note 2, “Acquisitions” for further details.
Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value. Fair value is calculated using relief from royalty method. 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. 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 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.
During 2020, we observed a significant decline in the market valuation of our common shares as a result of the COVID-19 pandemic. As such, we performed sensitivity analyses based on more recent assumptions, including entity-specific and macroeconomic factors resulting from the COVID-19 pandemic during the interim periods. We concluded that it was not more likely than not that the fair values of our indefinite-lived intangible assets were below their carrying values. We believe there have been no other events or circumstances which would more likely than not reduce the fair value of our indefinite-lived or definite-lived intangible assets below their carrying value.
As of December 31, 2020, we had $520.3 million of net intangible assets, of which $70.9 million were intangibles with indefinite useful lives, consisting of trade names. As of December 31, 2019, we had $505.1 million of net intangible assets, of which $69.9 million were intangibles with indefinite useful lives, consisting of trade names.
Changes to intangible assets are as follows:
(in millions) December 31, 2020 2019 2018
Balance at beginning of period, net of accumulated amortization $ 505.1  $ 481.8  $ 276.8 
Additions 52.5  66.0  252.8 
Amortization expense (48.4) (40.0) (44.5)
Currency translation and other 11.1  (2.7) (3.3)
Balance at end of period, net of accumulated amortization $ 520.3  $ 505.1  $ 481.8 
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. For the year ended December 31, 2019, additions to intangible assets represent the purchase price allocation related to the acquisition of Cummins-Allison. See discussion in Note 2, “Acquisitions” for further details.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of intangible assets follows:
(in millions) Weighted Average
Amortization Period of Finite Lived Assets (in years) 		December 31, 2020 December 31, 2019
Gross
Asset 		Accumulated
Amortization 		Net Gross
Asset 		Accumulated
Amortization 		Net
Intellectual property rights 15.7 $ 138.2  $ 58.4  $ 79.8  $ 134.2  $ 56.8  $ 77.4 
Customer relationships and backlog 18.0 663.6  280.6  383.0  603.1  241.3  361.8 
Drawings 40.0 11.1  10.5  0.6  11.1  10.5  0.6 
Other 11.8 144.9  88.0  56.9  141.6  76.3  65.3 
Total 17.6 $ 957.8  $ 437.5  $ 520.3  $ 890.0  $ 384.9  $ 505.1 
Future amortization expense associated with intangibles is expected to be:
Year (in millions)
2021 $ 44.4 
2022 $ 43.9 
2023 $ 43.8 
2024 $ 42.9 
2025 and after $ 274.4 
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.
(in millions) Defined Benefit Pension and Other Postretirement Items  Currency Translation Adjustment
 Total (c)
Balance as of December 31, 2017 $ (270.4)
(a)
$ (109.7)
(a)
$ (380.1)
Other comprehensive (loss) income before reclassifications (36.2)
(b)
(41.3) (77.5)
Amounts reclassified from accumulated other comprehensive loss 10.0 
(b)
—  10.0 
Net period other comprehensive (loss) income (26.2) (41.3) (67.5)
Balance as of December 31, 2018 (296.6)
(a)
(151.0)
(a)
(447.6)
Other comprehensive (loss) income before reclassifications (58.4)
(b)
11.6  (46.8)
Amounts reclassified from accumulated other comprehensive loss 10.7 
(b)
—  10.7 
Net period other comprehensive (loss) income (47.7) 11.6  (36.1)
Balance as of December 31, 2019 (344.3)
(a)
(139.4)
(a)
(483.7)
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)
(a)
Balance has been revised to correct a $21.7 million misclassification between previously reported amounts, which resulted in a decrease in previously reported Defined Benefit Pension and Other Postretirement Items as of December 31, 2017, 2018 and 2019 from $(292.1) million, $(318.3) million and $(366.0) million, respectively, to $(270.4) million,$(296.6) million and $(344.3) million, respectively, and an increase in previously reported Currency Translation Adjustment as of December 31, 2017, 2018 and 2019 from $(88.0) million, $(129.3) million and $(117.7) million, respectively, to $(109.7) million, $(151.0) million and $(139.4) million, respectively. This correction had no effect on the Company’s previously reported consolidated financial statements as of and for the years ended December 31, 2019, 2018 and 2017.
(b)
Balance has been revised to correct a $9.6 million and $15.5 million misclassification between previously reported amounts, which resulted in a decrease in previously reported Other comprehensive (loss) income before reclassifications for the years ended December 31, 2018 and 2019 from $(45.8) million and $(73.9) million, respectively to $(36.2) million and $(58.4) million, respectively, and a decrease in previously reported Amounts reclassified from accumulated other comprehensive loss for the years ended December 31, 2018 and 2019 from $19.6 million and $26.2 million, respectively, to $10.0 million and $10.7 million, respectively. This correction had no effect on the Company’s previously reported consolidated financial statements as of and for the years ended December 31, 2019 and 2018.
(c)
 Net of tax benefit of $148.2 million, $135.4 million and $122.2 million for 2020, 2019, and 2018, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the years ended December 31, 2020, 2019 and 2018. Amortization of pension and postretirement components have been recorded within “Miscellaneous income, net” on the Consolidated Statements of Operations.
(in millions) Amount Reclassified from Accumulated Other Comprehensive Loss
 December 31, 2020 2019 2018
Amortization of pension items:
Prior service costs $ (0.3) $ (0.3) $ (0.5)
Net loss 19.1  15.3  14.2 
Amortization of postretirement items:
Prior service costs (1.1) (1.1) (1.0)
Net gain —  (0.3) (0.2)
Total before tax $ 17.7  $ 13.6  $ 12.5 
Tax impact 3.9  2.9 
(a)
2.5 
(a)
Total reclassifications for the period $ 13.8  $ 10.7  $ 10.0 
(a)
Balance has been revised to correct a misclassification between previously reported amounts of $15.5 million and $9.6 million for the years ended December 31, 2019 and 2018, respectively, which resulted in an increase in previously reported Tax impact from $(12.6) million and $(7.1) million, respectively, to $2.9 million and $2.5 million, respectively. This correction had no effect on the Company’s previously reported consolidated financial statements as of and for the years ended December 31, 2019 and 2018.
Recent Accounting Pronouncements - Not Yet Adopted as of December 31, 2020
Simplifying the Accounting for Income Taxes
In December 2019, the Financial Accounting Standards Board (“FASB”) issued amended guidance to simplify the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods presented. We do not expect that the amended guidance will have a material effect on our consolidated financial statements and related disclosures when we adopt this standard effective January 1, 2021.
Recent Accounting Pronouncements - Adopted
Disclosure Requirements for Defined Benefit Plans
In August 2018, the FASB issued amended guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The amended guidance removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the entity; and the effects of a one-percentage point change in assumed health care cost trend rates. The amended guidance requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years ending after December 15, 2020. Effective December 31, 2020, we adopted the amended guidance and applied the disclosure requirements on a retrospective basis to all periods presented. This amended guidance did not have a material effect on our disclosures.
Measurement of Credit Losses on Financial Instruments
In June 2016, the FASB issued amended guidance that changes the impairment model for most financial assets and certain other instruments. For trade receivables, contract assets and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a current expected credit loss (“CECL”) model that will immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of this update, including trade receivables. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The CECL model is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability.
On January 1, 2020, we adopted the new CECL standard and developed an expected impairment model based on our historical loss experience. We believe that our previous methodology to calculate credit losses is generally consistent with the new
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
expected credit loss model and did not result in a material adjustment upon adoption. The allowance for doubtful accounts was $10.9 million and $7.2 million as of December 31, 2020 and 2019, respectively.
Leases
In February 2016, the FASB issued amended guidance on accounting for leases. The amended guidance requires the recognition of a right-of-use asset and a lease liability for all leases by lessees and amends disclosure requirements associated
with leasing arrangements.
On January 1, 2019, we adopted ASC 842, “Leases” (“the new standard” or “ASC 842”) using the modified retrospective method. Under this method, we elected to apply the new standard as of the application date. Results for reporting periods beginning after January 1, 2019 are presented under ASC 842, while prior period amounts continue to be reported under ASC 840, “Leases” (“ASC 840”). We elected to adopt certain of the optional practical expedients, including the package of practical expedients, which, among other things, gives us the option to not reassess: (1) whether expired or existing contracts are or contain leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for existing leases. We also elected the practical expedient to not separate lease and non-lease components, which allows us to account for lease and nonlease components as a single lease component. We did not elect the (1) hindsight practical expedient in our determination of the lease term for our existing leases; and (2) the short-term practical expedient to exclude short-term leases from our right-of-use assets and lease liabilities. We implemented a new system, processes, and controls to enable the preparation of financial information upon adoption.

The adoption of the new standard primarily impacted our accounting for operating leases which resulted in the recognition of right-of-use assets and corresponding lease liabilities. The accounting for finance leases did not substantially change under the new standard, and we do not have significant finance leases. Upon adoption, we established a right-of-use asset of $109.1 million (included in Other assets) and a lease liability of $110.4 million (included in Accrued liabilities and Other liabilities) at January 1, 2019. Our prospective adoption of this new standard did not result in a cumulative-effect adjustment to retained earnings. The new standard did not impact our Consolidated Statements of Operations or Consolidated Statements of 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 Fluid Handling 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Allocation of Consideration Transferred to Net Assets Acquired
The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S. The final determination of the fair value of certain assets and liabilities will be completed within the one-year measurement period as required by ASC 805. We have not yet completed our evaluation and determination of certain assets acquired and liabilities assumed, primarily related to the final assessment and valuation of certain tax amounts. Any potential adjustments made could be material in relation to the preliminary values presented below:
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 106.1 
Total assets acquired $ 196.6 
Total current liabilities $ 8.1 
Other liabilities 19.3 
Total assumed liabilities $ 27.4 
Net assets acquired $ 169.2 
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.
54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 either prior period.
Cummins-Allison Acquisition
On December 31, 2019 we completed the acquisition of Cummins-Allison. The base purchase price of the acquisition was $160 million on a cash-free, debt-free basis, subject to a later adjustment reflecting Cummins-Allison’s net working capital, cash, and Cummins-Allison’s transaction expenses. The amount paid, net of cash acquired, was $156.2 million. We issued $150 million of commercial paper and used cash on hand to fund the acquisition. In November 2020, we paid $0.2 million related to the final working capital adjustment which resulted in net cash paid of $156.4 million.
Cummins-Allison is a leading provider of high speed, cash and coin counting and sorting machines and retail cash office solutions which are primarily used in back-office applications. Cummins-Allison has been integrated into our Payment & Merchandising Technologies segment. Cummins-Allison also has a nationwide service network to support these hardware sales. The amount allocated to goodwill reflects the expected synergies related to material costs, supply chain manufacturing productivity and research and development. 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 Cummins-Allison. The fair value of certain assets and liabilities has been completed as required by ASC 805.
Net assets acquired (in millions)
Total current assets $ 91.6 
Property, plant and equipment 26.3 
Other assets 9.1 
Intangible assets 66.0 
Goodwill 60.3 
Total assets acquired $ 253.3 
Total current liabilities $ 71.6 
Other liabilities 25.3 
Total assumed liabilities $ 96.9 
Net assets acquired $ 156.4 
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 $ 3.0  7
Customer relationships 54.5  18
Product technology 8.5  10
Total acquired intangible assets $ 66.0 
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 Cummins-Allison’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The trade name Cummins Allison is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of seven years.
The fair values of the customer relationships 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
55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 a “wasting” asset and 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 is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 18 years.
The fair values of the product technology intangible assets were also determined by the relief-from-royalty approach. Similarly, 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 the technology. Therefore, a portion of Cummins-Allison’s earnings, equal to the after-tax royalty that would have been paid for the use of the technology, can be attributed to the firm’s ownership of the technology. The technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 10 years.
Supplemental Pro Forma Data
The following unaudited pro forma combined information assumes that the acquisition was completed on January 1, 2018. The unaudited pro forma consolidated net sales for 2019 and 2018 would have been $3,475.2 million and $3,531.1 million, respectively. The unaudited pro forma consolidated net sales are provided for illustrative purposes only and are not indicative of our actual consolidated results of operations or consolidated financial position. Consolidated pro forma net income attributable to common shareholders has not been presented since the impact is not material to our financial results in any of the periods.
Crane Currency Acquisition
On January 10, 2018, we completed the acquisition of Crane Currency. The base purchase price of the acquisition was $800 million on a cash-free, debt-free basis, subject to a later adjustment reflecting Crane Currency’s net working capital, cash, the assumption of certain debt-like items, and Crane Currency’s transaction expenses. The amount paid, net of cash acquired, was $672.3 million. In July 2018, we received $24.3 million related to the final working capital adjustment of the Crane Currency acquisition, resulting in net cash paid of $648.0 million. To finance the acquisition, we issued commercial paper under our commercial paper program and utilized proceeds from term loans that we issued at the closing of the acquisition, as well as available cash on hand. At the closing, the transitory subsidiary of Crane Co. merged with and into Crane Currency, with Crane Currency surviving as a wholly owned subsidiary of Crane Co.
Crane Currency is a supplier of banknotes and highly engineered banknote security features which complement the existing portfolio of currency and payment products within the Payment & Merchandising Technologies segment. As such, Crane Currency has been integrated into the Payment & Merchandising Technologies segment. The amount allocated to goodwill reflects the benefits we expect to realize from the acquisition, as the acquisition is expected to strengthen and broaden our product offering within the currency and payment markets. Goodwill from this acquisition is not deductible for tax purposes.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 Crane Currency. The fair value of certain assets and liabilities has been completed as required by ASC 805.
Net assets acquired (in millions)
Total current assets $ 199.6 
Property, plant and equipment 298.0 
Other assets 5.3 
Intangible assets 252.8 
Goodwill 217.1 
Total assets acquired $ 972.8 
Total current liabilities $ 107.2 
Long-term debt 97.3 
Other liabilities 120.3 
Total assumed liabilities $ 324.8 
Net assets acquired $ 648.0 
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 $ 42.0  indefinite
Customer relationships 135.8  23.1
Product technology 74.0  8.4
Backlog 1.0  1.0
Total acquired intangible assets $ 252.8 
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 Crane Currency’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to the firm’s ownership. The trademark and trade names, Crane Currency and Crane are assigned an indefinite life and therefore will not be amortized.
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 a “wasting” asset and 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 is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 18 to 24 years.
The fair values of the product technology intangible assets were also determined by the relief-from-royalty approach. Similarly, 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 the technology. Therefore, a portion of Crane Currency’s earnings, equal to the after-tax royalty that would have been paid for the use of the technology, can be attributed to the firm’s ownership of the technology. The
57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 7 to 11 years.
Supplemental Pro Forma Data
Crane Currency’s results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 10, 2018. The pro forma impact for the stub period (January 1, 2018 through January 9, 2018) is not material. Crane Currency contributed sales of $458.2 million resulting in an operating profit of approximately $33.8 million for the period from the completion of the acquisition through December 31, 2018.
Acquisition-Related Costs
Acquisition-related costs are being expensed as incurred. For the years ended December 31, 2020, 2019 and 2018, we recorded $12.9 million, $5.2 million and $28.9 million, respectively, of integration and transaction costs. Acquisition-related costs for the years ended December 31, 2020 and 2018 included $5.6 million and $9.1 million, respectively of inventory step-up and backlog amortization. Acquisition-related costs are recorded within “Acquisition-related and integration charges” in our Consolidated Statements of Operations.



58

NOTES TO CONSOLIDATED 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; 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 have four reporting segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials.
A brief description of each of our segments are as follows:
Fluid Handling
The Fluid Handling segment is a provider of highly engineered fluid handling equipment for critical performance applications that require high reliability. 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.
The acquisition of I&S has been integrated into Process Valves and Related Products business. See discussion in Note 2,
“Acquisitions” for further details.
Payment & Merchandising Technologies
The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (“CPI”) and Crane Currency.  CPI provides high technology payment acceptance and dispensing products to original equipment manufacturers, and for certain vertical markets, it also provides currency handling and processing systems, complete cash and cashless payment and merchandising solutions, equipment service solutions, and fully connected managed service solutions. Crane Currency is a supplier of banknotes and highly engineered banknote security features.
In the third quarter of 2020, we completed an internal merger to consolidate the Crane Merchandising Systems (“CMS”) business into the vending vertical within the CPI business. This internal merger will enable improved coordination and collaboration while delivering increasingly integrated connectivity solutions to our customers.
The acquisition of Cummins-Allison has been integrated into our CPI business. See discussion in Note 2, “Acquisitions” for further details.
Aerospace & Electronics
Aerospace & Electronics segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace and military aerospace and defense markets. 
Engineered Materials
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).
For the year ended December 31, 2020, operating profit included acquisition-related and integration charges and restructuring charges, net. For the year ended December 31, 2019, operating profit included an asbestos provision, net; an environmental provision, net; acquisition-related and integration charges and restructuring charges, net. For the year ended December 31, 2018, operating profit included acquisition-related and integration charges and restructuring charges, net. See Note 2, “Acquisitions” for discussion on the acquisition-related costs. See Note 15, “Restructuring Charges, Net” for discussion of the restructuring charges, net. See Note 12, “Commitments and Contingencies” for discussion of the asbestos provision, net and environmental provision, net.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Financial information by reportable segment is set forth below:
(in millions) December 31, 2020 2019 2018
Fluid Handling      
Net sales $ 1,005.8  $ 1,117.4  $ 1,101.8 
Operating profit 97.7  131.7  118.8 
Assets 1,106.1  941.6  878.2 
Goodwill 360.0 240.9  240.8 
Capital expenditures 13.7  23.4  19.9 
Depreciation and amortization 21.6  14.2  15.2 
Payment & Merchandising Technologies      
Net sales $ 1,104.8  $ 1,158.3  $ 1,257.0 
Operating profit 100.6  177.3  186.0 
Assets 2,215.3  2,303.4  2,074.4 
Goodwill 875.2 857.8  789.2 
Capital expenditures 9.3  20.6  57.5 
Depreciation and amortization 85.9  77.1  82.4 
Aerospace & Electronics      
Net sales $ 650.7  $ 798.8  $ 743.5 
Operating profit
100.7  189.4  164.2 
Assets 593.9  638.1  603.9 
Goodwill 202.5 202.4  202.4 
Capital expenditures 9.8  20.0  20.6 
Depreciation and amortization 14.2  13.5  13.0 
Engineered Materials      
Net sales $ 175.6  $ 208.6  $ 243.2 
Operating profit 22.7  26.8  37.8 
Assets 217.3  219.6  222.1 
Goodwill 171.3 171.3  171.3 
Capital expenditures 1.2  4.4  10.3 
Depreciation and amortization 3.7  5.6  6.4 
TOTAL NET SALES $ 2,936.9  $ 3,283.1  $ 3,345.5 
Operating profit (loss)
Reporting segments $ 321.7  $ 525.2  $ 506.8 
Corporate expense — before asbestos and environmental provisions (58.8) (66.9) (65.5)
Corporate expense — asbestos provision, net —  (229.0) — 
Corporate expense — environmental provision, net —  (18.9) — 
TOTAL OPERATING PROFIT $ 262.9  $ 210.4  $ 441.3 
Interest income 2.0  2.7  2.3 
Interest expense (55.3) (46.8) (50.9)
Miscellaneous income, net 14.9  4.4  18.7 
INCOME BEFORE INCOME TAXES $ 224.5  $ 170.7  $ 411.4 
Assets
Reporting segments $ 4,132.6  $ 4,102.7  $ 3,778.6 
Corporate 456.3  321.0  264.1 
TOTAL ASSETS $ 4,588.9  $ 4,423.7  $ 4,042.7 
TOTAL GOODWILL (Reporting segments) $ 1,609.0  $ 1,472.4  $ 1,403.7 
Capital expenditures
Reporting segments $ 34.0  $ 68.4  $ 108.3 
Corporate 0.1  0.4  0.5 
TOTAL CAPITAL EXPENDITURES $ 34.1  $ 68.8  $ 108.8 
Depreciation and amortization
Reporting segments $ 125.4  $ 110.4  $ 117.0 
Corporate 2.1  3.1  3.0 
TOTAL DEPRECIATION AND AMORTIZATION $ 127.5  $ 113.5  $ 120.0 
60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information by geographic region:
(in millions) December 31, 2020 2019 2018
Net sales (a)
United States $ 1,862.7  $ 2,111.3  $ 2,107.2 
Canada 162.9  176.8  172.3 
United Kingdom 270.9  393.6  397.5 
Continental Europe 480.1  410.1  484.2 
Other international 160.3  191.3  184.3 
TOTAL NET SALES $ 2,936.9  $ 3,283.1  $ 3,345.5 
(in millions) December 31, 2020 2019 2018
Long-lived assets (a) (b)
United States $ 339.2  $ 364.2  $ 304.6 
Canada 15.8  17.6  7.8 
Europe 266.6  259.6  249.3 
Other international 60.7  61.7  32.5 
Corporate 22.4  25.8  4.9 
TOTAL LONG-LIVED ASSETS $ 704.7  $ 728.9  $ 599.1 
(a)
Net sales and Long-lived assets, net by geographic region are based on the location of the business unit.
(b) Long-lived assets consist of property, plant and equipment, net in 2020, 2019 and 2018 and right-of-use assets, net in 2020 and 2019. There were no right-of-use assets in 2018 due to the adoption of ASC 842 on January 1, 2019.

















61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Revenue
Disaggregation of Revenues
The following table presents net sales disaggregated by product line for each segment:
(in millions) December 31, 2020 2019 2018
Fluid Handling
Process Valves and Related Products $ 631.6  $ 685.1  $ 685.4 
Commercial Valves 286.3  332.1  325.4 
Pumps and Systems 87.9  100.2  91.0 
Total Fluid Handling $ 1,005.8  $ 1,117.4  $ 1,101.8 
Payment & Merchandising Technologies
Payment Acceptance and Dispensing Products (a)
$ 670.8  $ 805.5  $ 798.8 
Banknotes and Security Products 434.0  352.8  458.2 
Total Payment & Merchandising Technologies $ 1,104.8  $ 1,158.3  $ 1,257.0 
Aerospace & Electronics
Commercial Original Equipment $ 226.4  $ 357.2  $ 343.4 
Military Original Equipment 258.7  217.2  195.7 
Commercial Aftermarket Products 93.0  161.4  150.5 
Military Aftermarket Products 72.6  63.0  53.9 
Total Aerospace & Electronics $ 650.7  $ 798.8  $ 743.5 
Engineered Materials
FRP - Recreational Vehicles $ 68.9  $ 84.5  $ 119.0 
FRP - Building Products 83.1  91.9  92.2 
FRP - Transportation 23.6  32.2  32.0 
Total Engineered Materials $ 175.6  $ 208.6  $ 243.2 
Total Net Sales $ 2,936.9  $ 3,283.1  $ 3,345.5 
(a)
As a result of an internal merger of the CMS business into the vending vertical of the CPI business, Payment Acceptance and Dispensing Products now includes Merchandising Equipment (See Note 3). Prior periods have been reclassified to conform to the current year presentation.
Remaining Performance Obligations
The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled, which we also refer to as total backlog. As of December 31, 2020, backlog was $1,165.0 million. We expect to recognize approximately 84% of our remaining performance obligations as revenue in 2021, an additional 13% by 2022 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. Contract assets are assessed for impairment and recorded at their net realizable value. Contract liabilities represent advance payments from customers. 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:
(in millions) December 31, 2020 2019
Contract assets $ 66.7  $ 55.8 
Contract liabilities $ 103.0  $ 88.4 
During 2020, we recognized revenue of $82.6 million related to contract liabilities as of December 31, 2019
62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 – Research and Development
Research and development costs are expensed when incurred.
(in millions) December 31, 2020 2019 2018
Research and Development Costs $ 74.6  $ 74.7 
(a)
$ 89.1 
(a)
(a)
The Company revised the fiscal year 2019 and 2018 amounts reported above to increase certain research and development costs that were excluded from the previously reported amounts by $27.2 million and $30.7 million, respectfully. This correction had no effect on the Company’s previously reported consolidated financial statements as of and for the years ended December 31, 2019 and 2018.
Note 6 – Pension and Postretirement Benefits
Pension Plan
In the United States, we sponsor a defined benefit pension plan that covers approximately 18% of all U.S. employees. 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 10% of all non-U.S. employees. 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.
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. As a result of the acquisition of Crane Currency, we also have postretirement medical and Medicare supplement that cover substantially all former full-time U.S. employees of Crane Currency.
63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the projected benefit obligations, fair value of plan assets and funded status is as follows:
Pension Benefits Postretirement Benefits
(in millions) December 31, 2020 2019 2020 2019
Change in benefit obligation:
Benefit obligation at beginning of year $ 1,168.7  $ 1,031.0  $ 29.0  $ 29.0 
Service cost 6.4  5.4  0.3  0.3 
Interest cost 26.1  32.7  0.9  1.1 
Plan participants’ contributions 0.5  0.5  —  0.1 
Amendments (0.2) 0.5  —  — 
Actuarial loss 94.8  131.3  2.0  1.8 
Settlements (9.3) (0.7) —  — 
Curtailments (3.5) —  —  — 
Benefits paid (46.8) (47.7) (2.2) (2.4)
Foreign currency exchange and other 23.6  16.4  —  (0.9)
Administrative expenses paid (0.5) (0.7) —  — 
Benefit obligation at end of year $ 1,259.8  $ 1,168.7  $ 30.0  $ 29.0 
Change in plan assets:
Fair value of plan assets at beginning of year $ 965.8  $ 877.2  $ —  $ — 
Actual return on plan assets 70.3  113.8  —  — 
Employer contributions 26.1  4.2  2.2  2.3 
Plan participants’ contributions 0.5  0.5  —  0.1 
Settlements (9.3) (0.7) —  — 
Benefits paid (46.8) (47.7) (2.2) (2.4)
Foreign currency exchange and other 18.5  19.6  —  — 
Administrative expenses paid (1.0) (1.1) —  — 
Fair value of plan assets at end of year $ 1,024.1  $ 965.8  $ —  $ — 
Funded status $ (235.7) $ (202.9) $ (30.0) $ (29.0)
In the U.S., 2020 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, 2020 actuarial losses in the projected benefit obligation were primarily the result of decreases in discount rates. Other sources of gains or losses such as plan experience, updated census data, changes to forecast inflation and minor adjustments to actuarial assumptions generated combined gains of 5% of expected year end obligations.
In the U.S., 2019 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, 2019 actuarial losses in the projected benefit obligation were primarily the result of decreases in discount rates. Other sources of gains or losses such as plan experience, updated census data and minor adjustments to actuarial assumptions generated combined gains of 1% of expected year end obligations.
Amounts recognized on our Consolidated Balance Sheets consist of:
Pension Benefits Postretirement Benefits
(in millions) December 31, 2020 2019 2020 2019
Other assets $ 62.6  $ 64.8  $ —  $ — 
Current liabilities (1.5) (1.4) (2.6) (2.2)
Accrued pension and postretirement benefits (296.8) (266.3) (27.4) (26.8)
Funded status $ (235.7) $ (202.9) $ (30.0) $ (29.0)
64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amounts recognized in accumulated other comprehensive loss consist of:
Pension Benefits Postretirement Benefits
(in millions) December 31, 2020 2019 2020 2019
Net actuarial loss (gain) $ 532.3  $ 466.1  $ (0.9) $ (2.9)
Prior service credit (2.8) (4.5) (4.1) (5.2)
Total recognized in accumulated other comprehensive loss $ 529.5  $ 461.6  $ (5.0) $ (8.1)
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the U.S. and Non-U.S. plans, are as follows:
  Pension Obligations/Assets
  U.S. Non-U.S. Total
(in millions) December 31, 2020 2019 2020 2019 2020 2019
Projected benefit obligation $ 699.1  $ 650.2  $ 560.7  $ 518.5  $ 1,259.8  $ 1,168.7 
Accumulated benefit obligation 699.1  650.2  548.9  508.8  1,248.0  1,159.0 
Fair value of plan assets 482.8  451.5  541.3  514.3  $ 1,024.1  965.8 
Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:
(in millions) December 31, 2020 2019
Projected benefit obligation $ 1,060.4  $ 950.1 
Accumulated benefit obligation 1,049.5  940.6 
Fair value of plan assets 762.5  682.4 

Components of net periodic (benefit) cost are as follows:
Pension Benefits Postretirement Benefits
(in millions) For the year ended December 31, 2020 2019 2018 2020 2019 2018
Net Periodic (Benefit) Cost:
Service cost $ 6.4  $ 5.4  $ 5.9  $ 0.3  $ 0.3  $ 0.3 
Interest cost 26.1  32.7  30.1  0.9  1.1  1.1 
Expected return on plan assets (57.5) (53.7) (65.6) —  —  — 
Amortization of prior service cost (0.3) (0.3) (0.5) (1.1) (1.1) (1.0)
Amortization of net loss (gain) 19.1  15.3  14.2  —  (0.3) (0.2)
Recognized curtailment (gain) loss (2.3) —  0.3  —  —  — 
Settlement costs 1.7  —  0.3  —  —  — 
Net periodic (benefit) cost $ (6.8) $ (0.6) $ (15.3) $ 0.1  $ —  $ 0.2 
The weighted average assumptions used to determine benefit obligations are as follows:
Pension Benefits Postretirement Benefits
For the year ended December 31, 2020 2019 2018 2020 2019 2018
U.S. Plans:
Discount rate 2.62  % 3.34  % 4.36  % 2.30  % 3.20  % 4.30  %
Rate of compensation increase N/A N/A N/A N/A N/A N/A
Interest credit rate 0.93  % 2.83  % 2.40  % N/A N/A N/A
Non-U.S. Plans:
Discount rate 1.07  % 1.70  % 2.42  % N/A N/A 3.30  %
Rate of compensation increase 3.10  % 2.89  % 3.06  % N/A N/A N/A
Interest credit rate 0.29  % 0.22  % 0.84  % N/A N/A N/A
65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted-average assumptions used to determine net periodic benefit cost are as follows:
Pension Benefits Postretirement Benefits
For the year ended December 31, 2020 2019 2018 2020 2019 2018
U.S. Plans:
Discount rate 3.34  % 4.36  % 3.75  % 3.20  % 4.10  % 3.50  %
Expected rate of return on plan assets 7.25  % 7.25  % 7.75  % 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 2.83  % 2.40  % 2.49  % N/A N/A N/A
Non-U.S. Plans:
Discount rate 1.70  % 2.42  % 2.15  % N/A N/A N/A
Expected rate of return on plan assets 5.31  % 5.34  % 6.49  % N/A N/A N/A
Rate of compensation increase 2.89  % 3.06  % 2.80  % N/A N/A N/A
Interest credit rate 0.22  % 0.84  % 0.66  % N/A N/A N/A
 
The long-term expected rate of return on plan assets assumptions were determined with input from independent investment consultants and plan actuaries, utilizing asset pricing models and considering historical returns. 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.
In the U.S. plan, the 7.25% expected rate of return on assets assumption for 2020 reflected a long-term target comprised of an asset allocation range of 35%-75% equity securities, 15%-35% fixed income securities, 10%-35% alternative assets and 0%-10% cash and cash equivalents. As of December 31, 2020, the actual asset allocation for the U.S. plan was 63% equity securities, 16% fixed income securities, 17% alternative assets and 4% cash and cash equivalents.
For the non-U.S. plans, the 5.31% expected rate of return on assets assumption for 2020 reflected a weighted average of the long-term asset allocation targets for our various non-U.S. plans. As of December 31, 2020, the actual weighted average asset allocation for the non-U.S. plans was 28% equity securities, 34% fixed income securities, 36% alternative assets/other and 2% cash and cash equivalents.
The assumed health care cost trend rates are as follows:
December 31, 2020 2019
Health care cost trend rate assumed for next year 6.50  % 6.75  %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 4.50  % 4.50  %
Year that the rate reaches the ultimate trend rate 2029 2029
Assumed health care cost trend rates have a significant effect on the amounts reported for our health care plans.
Plan Assets
Our pension plan target allocations and weighted-average asset allocations by asset category are as follows:
   Target Allocation Actual Allocation
Asset Category December 31, 2020 2019
Equity securities 15%-75%  44  % 43  %
Fixed income securities 15%-75%  26  % 26  %
Alternative assets/Other 0%-45%  27  % 29  %
Cash and money market 0%-10%  3  % 2  %

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. 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.
66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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. Equity securities include Crane Co. common stock, which represents 4% and 5% of plan assets as of December 31, 2020 and 2019, respectively.
The fair value of our pension plan assets as of December 31, 2020, by asset category, are as follows:
(in millions) Active
Markets
for
Identical
Assets
Level 1 		Other
Observable
Inputs
Level 2 		Unobservable
Inputs
Level 3
Net Asset Value ("NAV") Practical Expedient (a)
Total
Fair Value
Cash Equivalents and Money Markets $ 30.1  $ —  $ —  $ —  $ 30.1 
Common Stocks
Actively Managed U.S. Equities 103.2  —  —  —  103.2 
Fixed Income Bonds and Notes —  0.1  —  —  0.1 
Commingled and Mutual Funds
U.S. Equity Funds 117.3  —  —  —  117.3 
Non-U.S. Equity Funds 53.2  —  —  178.0  231.2 
U.S. Fixed Income, Government and Corporate 76.6  —  —  —  76.6 
Registered Investment Company 18.3  —  —  —  18.3 
Collective Trust —  —  22.8  19.2  42.0 
Non-U.S. Fixed Income, Government and Corporate —  —  —  186.5  186.5 
International Balanced Funds —  —  —  1.9  1.9 
Alternative Investments
Insurance / Annuity Contract(s) —  14.2  —  —  14.2 
Hedge Funds and LDI —  —  —  153.8  153.8 
International Property Funds —  —  —  48.9  48.9 
Total Fair Value $ 398.7  $ 14.3  $ 22.8  $ 588.3  $ 1,024.1 
(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.
In 2020, the pension plan's asset classified as Level 3 constitutes an insurance contract valued annually on an actuarial basis.

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of our pension plan assets as of December 31, 2019, by asset category, are as follows:
(in millions) Active
Markets
for
Identical
Assets
Level 1 		Other
Observable
Inputs
Level 2 		Unobservable
Inputs
Level 3
Net Asset Value ("NAV") Practical Expedient(a)
Total
Fair Value
Cash Equivalents and Money Markets $ 14.7  $ —  $ —  $ —  $ 14.7 
Common Stocks
Actively Managed U.S. Equities 130.6  —  —  —  130.6 
Fixed Income Bonds and Notes —  0.1  —  —  0.1 
Commingled and Mutual Funds
U.S. Equity Funds 77.9  —  —  —  77.9 
Non-U.S. Equity Funds 44.8  —  —  158.6  203.4 
U.S. Fixed Income, Government and Corporate 75.7  —  —  —  75.7 
Registered Investment Company 30.2  —  —  —  30.2 
Collective Trust —  —  22.6  21.2  43.8 
Non-U.S. Fixed Income, Government and Corporate —  —  —  176.1  176.1 
International Balanced Funds —  —  —  1.8  1.8 
Alternative Investments
Insurance / Annuity Contract(s) —  15.1  —  —  15.1 
Hedge Funds and LDI —  —  —  147.3  147.3 
International Property Funds —  —  —  49.1  49.1 
Total Fair Value $ 373.9  $ 15.2  $ 22.6  $ 554.1  $ 965.8 
(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.
In 2019, the pension plan's asset classified as Level 3 constitutes an insurance contract valued annually on an actuarial basis
The following table sets forth a summary of pension plan assets valued using NAV or its equivalent as of December 31, 2020 and December 31, 2019:
Redemption
Frequency 		Unfunded
Commitment 		Other
Redemption
Restrictions 		Redemption Notice Period
Non-U.S. Equity Funds (a)
Immediate None None None
Non-U.S. Fixed Income, Government and Corporate (b)
Immediate None None None
International Balanced Funds (c)
Immediate None None None
Collective Trust Fund (d)
Immediate None None None
Hedge Funds (e)
Quarterly None None 65 days written
Hedge Funds (e)
Quarterly None None 30 days written
Hedge Funds (e)
Quarterly None None 30 days written
International Property Funds (f)
Immediate None None None
Hedge Funds and LDI (g)
Immediate None None None
(a)
These funds invest in corporate equity securities outside the United States.
(b) These funds invest in corporate and government fixed income securities outside the United States.
(c) These funds invest in a blend of equities, fixed income, cash and property outside the United States.
(d) These funds are managed in a collective trust under Australia's Superannuation plan structure.
(e) These funds are direct investment alternative investments/hedge funds that deploy a multi-strategy approach to investing (e.g., long/short, event-driven, credit, etc.)
(f) These funds invest in real property outside the United States.
(g) These funds invest in strategies that seek to add diversification to a portfolio with uncorrelated risk profiles or are designed to track the duration of all or part of the underlying liability.

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash Flows  
We expect, based on current actuarial calculations, to contribute cash of approximately $20.7 million to our defined benefit pension plans during 2021. Cash contributions in subsequent years will depend on a number of factors including the investment performance of plan assets.
Estimated Future Benefit Payments  
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
Estimated future payments (in millions) Pension
Benefits 		Postretirement Benefits
2021 $ 51.2  $ 2.6 
2022 51.8  2.4 
2023 53.2  2.5 
2024 54.3  2.4 
2025 56.6  2.1 
2026 to 2030 285.5  9.2 
Total payments $ 552.6  $ 21.2 
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. Benefit amounts are based upon years of service and compensation of the participating employees. There were no pre-tax settlement gains recorded in 2020. We recorded a pre-tax settlement gain of $0.1 million and $0.4 million in 2019 and 2018, respectively. Accrued SERP benefits were $3.9 million and $3.4 million as of December 31, 2020 and 2019, respectively. Employer contributions made to the SERP were $0.2 million, $2.2 million and $0.2 million in 2020, 2019 and 2018, respectively.
Defined Contribution Plans
We sponsor savings and investment plans that are available to our eligible employees including employees of our subsidiaries. We made contributions to the plans of $11.8 million, $11.0 million and $9.9 million in 2020, 2019 and 2018, respectively.
In addition to participant deferral contributions and company matching contributions on those deferrals, we provide a 3% non-matching contribution to eligible participants. We made non-matching contributions to these plans of $14.5 million, $13.4 million and $12.5 million in 2020, 2019 and 2018, respectively.
69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Leases
Arrangements that explicitly or implicitly relate to property, plant and equipment are assessed at inception to determine if the arrangement is or contains a lease. Generally, we enter into operating leases as the lessee and recognize right-of-use assets and lease liabilities based on the present value of future lease payments over the lease term.
We lease certain vehicles, equipment, manufacturing facilities, and non-manufacturing facilities. We have leases with both lease components and non-lease components, such as common area maintenance, utilities, or other repairs and maintenance. For all asset classes, we applied the practical expedient to account for each separate lease component and its associated non-lease component(s) as a single lease component.
We identify variable lease payments, such as maintenance payments based on actual activities performed or costs incurred, at lease commencement by assessing the nature of the payment provisions, including whether the payments are subject to a minimum.
Certain leases include options to renew for an additional term or company-controlled options to terminate. We generally determine it is not reasonably certain to assume the exercise of renewal options because there is no economic incentive to renew. As termination options often include penalties, we generally determine it is reasonably certain that termination options will not be exercised because there is an economic incentive not to terminate. Therefore, these options generally do not impact the lease term or the determination or classification of the right-of-use asset and lease liability.
In the third quarter of 2017, we entered into 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 into any other leases where a residual value guarantee is provided to the lessor.
Rental expense was $40.3 million, $34.8 million and $33.8 million for 2020, 2019 and 2018, respectively.
We do not enter into arrangements where restrictions or covenants are imposed by the lessor that, for example, relate to incurring additional financial obligations. Furthermore, we also have not entered into any significant sublease arrangements.
We use our collateralized incremental borrowing rate based on the information available at commencement date to determine the present value of future payments and the appropriate lease classification. 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:
(in millions) December 31, Classification 2020 2019
Assets
Operating right-of-use assets Other assets $ 104.2  $ 112.6 
Liabilities
Current lease liabilities Accrued liabilities $ 23.4  $ 24.0 
Long-term lease liabilities Other liabilities 86.5  91.5 
Total lease liabilities $ 109.9  $ 115.5 
The components of lease cost were as follows:
(in millions) December 31, 2020 2019
Operating lease cost $ 33.1  $ 32.6 
Variable lease cost $ 7.2  $ 2.2 
The weighted average remaining lease terms and discount rates for our operating leases were as follows:
December 31, 2020 2019
Weighted-average remaining lease term - operating leases 9.8 9.7
Weighted-average discount rate - operating leases 3.8  % 3.9  %
70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Supplemental cash flow information related to our operating leases was as follows for periods ended December 31, 2020 and 2019:
(in millions) December 31, 2020 2019
Cash paid for amounts included in measurement of operating lease liabilities - operating cash flows $ 26.5  $ 24.3 
Right-of-use assets obtained in exchange for new operating lease liabilities $ 10.0  $ 21.0 
Future minimum operating lease payments are as follows:
(in millions) December 31, 2020
2021 $ 26.9 
2022 22.6 
2023 18.3 
2024 14.3 
2025 10.9 
Thereafter 52.4 
Total future minimum operating lease payments $ 145.4 
Imputed interest 35.5 
Present value of lease liabilities reported $ 109.9 

Note 8 – Stock-Based Compensation Plans

At December 31, 2020, we had stock-based compensation awards outstanding under the following shareholder-approved plans: the 2013 Stock Incentive Plan (the "2013 Plan") and 2018 Stock Incentive Plan (the "2018 Plan"), applicable to employees and non-employee directors.

The 2013 Plan was approved by the Board of Directors and stockholders at the annual meeting in 2013. The 2013 Plan originally authorized the issuance of up to 9,500,000 shares of stock pursuant to awards under the plan. In 2018, in view of the limited number of shares remaining available under the 2013 Plan, the Board of Directors and stockholders approved the adoption of the 2018 Plan which authorized the issuance of up to 6,500,000 shares of Crane Co. stock. No further awards will be made under the 2013 Plan.

The stock incentive plans are used to provide long-term incentive compensation through stock options, restricted share units, performance-based restricted share units and deferred stock units.
 
Stock Options
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. Options granted to officers and employees from 2004 to 2013 expire six years after the date of grant. 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, 2020, 2019 and 2018 are as follows:
2020 2019 2018
Dividend yield 3.05  % 2.20  % 1.74  %
Volatility 27.15  % 25.17  % 23.25  %
Risk-free interest rate 1.23  % 2.64  % 2.45  %
Expected lives in years 5.2 4.2 4.2
Expected dividend yield is based on our dividend rate. Expected stock volatility was determined based upon the historical volatility for the four year period preceding the date of grant. The risk-free interest rate was based on the yield curve in effect
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at the time the options were granted, using U.S. constant maturities over the expected life of the option. The expected lives of the awards represents the period of time that options granted are expected to be outstanding.
Activity in our stock option plans for the year ended December 31, 2020 were as follows:
Option Activity Number of
Shares
(in 000’s) 		Weighted
Average
Exercise Price 		Weighted
Average
Remaining
Life (Years)
Options outstanding as of January 1, 2020 2,582  $ 66.26 
Granted 640  76.29 
Exercised (183) 48.78 
Canceled (163) 79.05   
Options outstanding as of December 31, 2020 2,876  $ 68.88  6.37
Options exercisable as of December 31, 2020 1,694  $ 61.86  5.00
Included in our share-based compensation was expense recognized for our stock option awards of $6.6 million, $6.0 million and $5.9 million in 2020, 2019 and 2018, respectively. The weighted-average fair value of options granted during 2020, 2019 and 2018 was $15.18, $15.79 and $17.79, respectively. The total fair value of shares vested during 2020, 2019 and 2018 was $6.2 million, $6.3 million and $6.5 million, respectively. The total intrinsic value of options exercised during 2020, 2019 and 2018 was $4.1 million, $6.8 million and $17.6 million, respectively. The total cash received from these option exercises during 2020, 2019 and 2018 was $8.9 million, $11.4 million and $24.2 million, respectively. The tax benefit realized for the tax deductions from option exercises and vesting of restricted share units was $0.6 million and $3.8 million as of December 31, 2020 and 2019, respectively. The aggregate intrinsic value of exercisable options was $29.5 million, $39.4 million and $16.7 million as of December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $11.9 million of total future compensation cost related to unvested share-based awards to be recognized over a weighted-average period of 2.09 years.

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 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 $15.7 million, $16.3 million and $15.7 million in 2020, 2019 and 2018, respectively. As of December 31, 2020, there was $23.8 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 1.87 years.
Changes in our restricted share units for the year ended December 31, 2020 were as follows:
Restricted Share Unit Activity  Restricted
Share Units
(in 000’s) 		Weighted
Average
Grant-Date
Fair Value
Restricted share units as of January 1, 2020 480  $ 83.23 
Restricted share units granted 178  78.04 
Restricted share units vested (154) 71.52 
Restricted share units forfeited (25) 82.96 
Performance-based restricted share units granted 75  93.05 
Performance-based restricted share units vested (48) 111.24 
Performance-based restricted share units forfeited (21) 97.98 
Restricted share units as of December 31, 2020 485  $ 83.17 

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Note 9 – Income Taxes
Provision for Income Taxes
Our income before taxes is as follows:
(in millions) For year ended December 31, 2020 2019 2018
U.S. operations $ 124.9  $ 64.0  $ 296.4 
Non-U.S. operations 99.6  106.7  115.0 
Total $ 224.5  $ 170.7  $ 411.4 
Our provision (benefit) for income taxes consists of: 
(in millions) For the year ended December 31, 2020 2019 2018
Current:
U.S. federal tax $ 11.3  $ 31.0  $ 9.3 
U.S. state and local tax 1.6  2.2  4.9 
Non-U.S. tax 12.4  29.0  14.0 
Total current 25.3  62.2  28.2 
Deferred:
U.S. federal tax 16.5  (26.4) 35.7 
U.S. state and local tax (0.1) 3.0  2.0 
Non-U.S. tax 1.7  (1.7) 10.0 
Total deferred 18.1  (25.1) 47.7 
Total provision for income taxes * $ 43.4  $ 37.1  $ 75.9 
* Included in the above amounts are excess tax benefits from share-based compensation of $0.6, $3.8 and $5.4 in 2020, 2019 and 2018, respectively, which were reflected as reductions in our provision for income taxes in 2020, 2019 and 2018.
A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is as follows:
For the year ended December 31, 2020 2019 2018
Statutory U.S. federal tax rate 21.0  % 21.0  % 21.0  %
Increase (reduction) from:
Income taxed at non-U.S. rates (3.1) % 2.6  % (0.2) %
Non-U.S. income inclusion, net of tax credits 2.3  % 3.4  % (0.1) %
State and local taxes, net of federal benefit 0.5  % 2.5  % 1.4  %
U.S. research and development tax credit (2.3) % (1.7) % (0.7) %
U.S. domestic manufacturing deduction —  % —  % (0.3) %
Effect of the enactment of the Tax Cuts and Jobs Act of 2017 —  % —  % (0.8) %
U.S. deduction for foreign - derived intangible income (0.5) % (5.1) % (1.1) %
Other 1.4  % (1.0) % (0.8) %
Effective tax rate 19.3  % 21.7  % 18.4  %

As of December 31, 2020, we have made the following determinations with regard to our non-U.S. earnings:
(in millions) Permanently reinvested Not permanently reinvested
Amount of earnings $ 303.8  $ 1,392.7 
Associated tax NA * $ 11.1 
* Determination of U.S. income taxes and non-U.S. withholding taxes due upon repatriation of this $303.8 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.


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Tax Related to Comprehensive Income
During 2020, 2019 and 2018, tax (benefit) provision of $(13.5) million, $(12.6) million and $(7.1) 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:
(in millions) December 31, 2020 2019
Deferred tax assets:
Asbestos-related liabilities $ 150.3  $ 158.4 
Tax loss and credit carryforwards 124.5  120.7 
Pension and post-retirement benefits 66.0  56.9 
Inventories 29.8  26.0 
Other 41.4  46.6 
Total $ 412.0  $ 408.6 
Less: valuation allowance 153.4  150.0 
Total deferred tax assets, net of valuation allowance $ 258.6  $ 258.6 
Deferred tax liabilities:
Basis difference in fixed assets $ (60.6) $ (58.7)
Basis difference in intangible assets (212.7) (195.4)
Other (24.0) (25.2)
Total deferred tax liabilities $ (297.3) $ (279.3)
Net deferred tax asset (liability) $ (38.7) $ (20.7)
Balance sheet classification:
Long-term deferred tax assets 14.9  35.1 
Long-term deferred tax liability (53.6) (55.8)
Net deferred tax asset (liability) $ (38.7) $ (20.7)
As of December 31, 2020, we had U.S. federal, U.S. state and non-U.S. tax loss and credit carryforwards that will expire, if unused, as follows:
(in millions)
Year of expiration 		U.S.
Federal
Tax
Credits 		U.S.
Federal
Tax
Losses 		U.S.
State
Tax
Credits 		U.S.
State
Tax
Losses 		Non-
U.S.
Tax
Losses 		Total
2020-2024 $ 2.8  $ —  $ 3.3  $ 97.8  $ 12.4 
After 2024 4.6  0.8  2.4  797.2  7.4 
Indefinite —  —  22.8  7.2  215.6 
Total tax carryforwards $ 7.4  $ 0.8  $ 28.5  $ 902.2  $ 235.4   
Deferred tax asset on tax carryforwards $ 7.4  $ 0.2  $ 22.6  $ 45.0  $ 49.3  $ 124.5 
Valuation allowance on tax carryforwards (6.5) (0.2) (21.0) (43.0) (47.6) (118.3)
Net deferred tax asset on tax carryforwards $ 0.9  $ —  $ 1.6  $ 2.0  $ 1.7  $ 6.2 
As of December 31, 2020, and 2019, we determined that it was more likely than not that $118.3 million and $115.2 million, respectively, of our deferred tax assets related to tax loss and credit carryforwards will not be realized. 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 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, 2020 and 2019, a valuation allowance of $35.1 million and $34.8 million, respectively, was established against these U.S. state and non-U.S. deferred tax assets. Our total valuation allowance as of December 31, 2020 and 2019 was $153.4 million and $150.0 million, respectively.
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Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:
(in millions) 2020 2019 2018
Balance of liability as of January 1, $ 39.8  $ 42.0  $ 46.4 
Increase as a result of tax positions taken during a prior year 5.4  1.1  4.6 
Decrease as a result of tax positions taken during a prior year (0.4) (0.5) (1.5)
Increase as a result of tax positions taken during the current year 1.8  3.2  3.1 
Decrease as a result of settlements with taxing authorities (2.5) —  (1.1)
Reduction as a result of a lapse of the statute of limitations (10.1) (6.0) (9.5)
Balance of liability as of December 31, $ 34.0  $ 39.8  $ 42.0 
As of December 31, 2020, 2019 and 2018, the amount of our unrecognized tax benefits that, if recognized, would affect our effective tax rate were $32.6 million, $43.8 million and $43.1 million, respectively. 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 and (3) unrecognized tax benefits whose reversals would be recorded to goodwill.
We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense. During the years ended December 31, 2020, 2019 and 2018, we recognized interest and penalty (income)/ expense of $(0.5) million, $0.8 million and $0.7 million, respectively, in our Consolidated Statements of Operations. As of December 31, 2020 and 2019, we had accrued $7.5 million and $8.0 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets.
During the next twelve months, it is reasonably possible that our unrecognized tax benefits could change by $10.6 million due to settlements of income tax examinations, the expiration of statutes of limitations or other resolution of uncertainties. However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax expense or benefit in the period in which such matters are effectively settled.
Income Tax Examinations
Our income tax returns are subject to examination by the U.S. federal, U.S. state and local, and non-U.S. tax authorities. With few exceptions, the years open to examination are as follows:
Jurisdiction Year
U.S. federal     2017 - 2019
U.S. state and local     2014 - 2019
Non-U.S.     2014 - 2019
Currently, we and our subsidiaries are under examination in various jurisdictions, including Germany (2013 through 2015), Canada (2013 through 2015) and Luxembourg (2017 through 2018).
Note 10 – Accrued Liabilities
Accrued liabilities consist of: 
(in millions) December 31, 2020 2019
Employee related expenses $ 124.3  $ 120.6 
Warranty 9.4  11.0 
Current lease liabilities 23.4  24.0 
Contract liabilities 103.0  88.4 
Other 135.8  134.2 
Total $ 395.9  $ 378.2 
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.
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A summary of the warranty liabilities is as follows:
(in millions) December 31, 2020 2019
Balance at beginning of period $ 11.0  $ 18.2 
Expense 8.2  8.9 
Changes due to acquisitions/divestitures 0.3  — 
Payments / deductions (10.2) (16.0)
Currency translation 0.1  (0.1)
Balance at end of period $ 9.4  $ 11.0 

Note 11 – Other Liabilities
(in millions) December 31, 2020 2019
Environmental $ 29.4  $ 36.0 
Long-term lease liabilities 86.5  91.5 
Other 55.5  60.4 
Total $ 171.4  $ 187.9 

Note 12 - Commitments and Contingencies
Asbestos Liability
Information Regarding Claims and Costs in the Tort System
As of December 31, 2020, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:
For the year ended December 31, 2020 2019 2018
Beginning claims 29,056  29,089  32,234 
New claims 2,620  2,848  2,434 
Settlements (885) (983) (1,011)
Dismissals (1,653) (1,898) (4,568)
Ending claims 29,138  29,056  29,089 

Of the 29,138 pending claims as of December 31, 2020, approximately 18,000 claims were pending in New York of which approximately 16,000 are non-malignancy claims that were filed over 15 years ago and have been inactive under New York court orders.
We have tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court. We further have pursued appeals of certain adverse jury verdicts that have resulted in reversals in favor of the defense. We have also tried several other cases resulting in plaintiff verdicts which we paid or settled after unsuccessful appeals, the most recent of which are described below.
On March 23, 2010, a Philadelphia, Pennsylvania, state court jury found us responsible for a 1/11th share of a $14.5 million verdict in the James Nelson claim. On February 23, 2011, the court entered judgment on the verdict in the amount of $4.0 million, jointly, against us and two other defendants, with additional interest in the amount of $0.01 million being assessed against us, only. All defendants, including us, and the plaintiffs took timely appeals of certain aspects of those judgments. On September 5, 2013, a panel of the Pennsylvania Superior Court, in a 2-1 decision, vacated the Nelson verdict against all defendants, reversing and remanding for a new trial. Plaintiffs requested a rehearing in the Superior Court and by order dated November 18, 2013, the Superior Court vacated the panel opinion, and granted en banc reargument. On December 23, 2014, the Superior Court issued a second opinion reversing the jury verdict. Plaintiffs sought leave to appeal to the Pennsylvania Supreme Court, which defendants opposed. By order dated June 21, 2017, the Supreme Court of Pennsylvania denied plaintiffs’ petition for leave to appeal. The case was set for a new trial in April 2018. We settled the matter in 2018. 
On September 17, 2013, a Fort Lauderdale, Florida state court jury in the Richard DeLisle claim found us responsible for 16% of an $8 million verdict. The trial court denied all parties’ post-trial motions, and entered judgment against us in the amount of $1.3 million. We appealed and oral argument on the appeal took place on February 16, 2016. On September 14, 2016, a
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
panel of the Florida Court of Appeals reversed and entered judgment in favor of us. Plaintiff filed with the Court of Appeals a motion for rehearing and/or certification of an appeal to the Florida Supreme Court, which the Court denied on November 9, 2016. Plaintiffs subsequently requested review by the Supreme Court of Florida. Plaintiffs' motion was granted on July 11, 2017. Oral argument took place on March 6, 2018. On October 15, 2018, the Supreme Court of Florida reversed and remanded with instructions to reinstate the trial court’s judgment. We paid the judgment on December 28, 2018.  
On July 2, 2015, a St. Louis, Missouri state court jury in the James Poage claim entered a $1.5 million verdict for compensatory damages against us. The jury also awarded exemplary damages against us in the amount of $10 million. We filed a motion seeking to reduce the verdict to account for the verdict set-offs. That motion was denied, and judgment was entered against us in the amount of $10.8 million. We initiated an appeal. Oral argument was held on December 13, 2016. In an opinion dated May 2, 2017, a Missouri Court of Appeals panel affirmed the judgment in all respects.  The Court of Appeals denied our motion to transfer the case to the Supreme Court of Missouri. We sought leave to appeal before the Supreme Court of Missouri, which denied that request. The Supreme Court of the United States denied further review on March 26, 2018. We settled the matter in 2018. 
On April 22, 2016, a Phoenix, Arizona federal court jury found us responsible for a 20% share of a $9 million verdict in the George Coulbourn claim, and further awarded exemplary damages against us in the amount of $5 million.  The jury also awarded compensatory and exemplary damages against the other defendant present at trial.  The court entered judgment against us in the amount of $6.8 million. We filed post-trial motions, which were denied on September 20, 2016. We pursued an appeal to the Ninth Circuit Court of Appeals which affirmed the judgment on March 29, 2018. We settled the matter in 2018. 
Such judgment amounts were not included in our incurred costs until all available appeals were exhausted and the final payment amount was determined.
The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the years ended December 31, 2020, 2019 and 2018 totaled $50.9 million, $66.2 million and $88.8 million, respectively. Results for 2020 were impacted by court closures and significantly reduced trial related activity in jurisdictions throughout the United States due to the COVID-19 pandemic. Assuming a successful and comprehensive implementation of a COVID-19 vaccine program, we expect activity in the tort system to begin returning to a more normal pace in the second half of 2021. In contrast to the recognition of settlement and defense costs, which reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more, and may show some fluctuation from period to period. Cash payments of settlement amounts are not made until all releases and other required documentation are received by us, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements. Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the years ended December 31, 2020, 2019 and 2018 totaled $31.1 million, $41.5 million and $63.9 million, respectively. Detailed below are the comparable amounts for the periods indicated.
(in millions)
For the year ended December 31, 2020 2019 2018
Settlement / indemnity costs incurred (a)
$ 35.3  $ 45.5  $ 63.0 
Defense costs incurred (a)
15.6  20.7  25.8 
Total costs incurred $ 50.9  $ 66.2  $ 88.8 
Settlement / indemnity payments $ 24.7  $ 38.9  $ 61.5 
Defense payments 16.7  21.4  26.5 
Insurance receipts (10.3) (18.8) (24.1)
Pre-tax cash payments, net $ 31.1  $ 41.5  $ 63.9 
(a) Before insurance recoveries and tax effects.
The amounts shown for settlement and defense costs incurred, and cash payments, are not necessarily indicative of future period amounts, which may be higher or lower than those reported.
Cumulatively through December 31, 2020, we have resolved (by settlement or dismissal) approximately 141,000 claims. The related settlement cost incurred by us and our insurance carriers is approximately $680 million, for an average settlement cost per resolved claim of approximately $4,800. The average settlement cost per claim resolved during the years ended December 31, 2020, 2019 and 2018 was $13,900, $15,800, and $11,300, respectively. Because claims are sometimes dismissed in large groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate
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significantly from period to period. In addition to large group dismissals, the nature of the disease and corresponding settlement amounts for each claim resolved will also drive changes from period to period in the average settlement cost per claim. Accordingly, the average cost per resolved claim is not considered in our periodic review of our estimated asbestos liability. For a discussion regarding the four most significant factors affecting the liability estimate, see “Effects on the Consolidated Financial Statements.”
Effects on the Consolidated Financial Statements
We have retained an independent actuarial firm to assist management in estimating our asbestos liability in the tort system. The actuarial consultants review information provided by us concerning claims filed, settled and dismissed, amounts paid in settlements and relevant claim information such as the nature of the asbestos-related disease asserted by the claimant, the jurisdiction where filed and the time lag from filing to disposition of the claim. The methodology used by the actuarial consultants to project future asbestos costs is based on our recent historical experience for claims filed, settled and dismissed during a base reference period. Our experience is then compared to estimates of the number of individuals likely to develop asbestos-related diseases determined based on widely used previously conducted epidemiological studies augmented with current data inputs. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, the actuarial consultants estimate the number of future claims that would be filed against us and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for the costs of defending asbestos claims in the tort system using a forecast from us which is based upon discussions with our defense counsel. Based on this information, the actuarial consultants compile an estimate of our asbestos liability for pending and future claims using a range of reference periods based on claim experience and claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against us, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against us and (4) the aggregate defense costs incurred by us. These factors are interdependent, and no one factor predominates in determining the liability estimate.
In our view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year; the jurisdictions where such claims are filed, and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits; and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which have been estimated to provide $36 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, management continues to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.
Each quarter, the actuarial consultants compile an update based upon our experience in claims filed, settled and dismissed as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis). In addition to this claims experience, we also consider additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. As part of this process, we also consider trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of the actuarial consultants and determines whether a change in the estimate is warranted.
Liability Estimate. In June 2016, the New York State Court of Appeals issued its opinion in Dummitt v. Crane Co., affirming a 2012 verdict for $4.9 million against us. In that opinion, the court ruled that in certain circumstances we are legally responsible for asbestos-containing materials made and sold by third parties that others attached post-sale to our equipment. This decision provided clarity regarding the nature of claims that may proceed to trial in New York and greater predictability regarding future claim activity. We also reflected the impact of the Dummitt decision on our expected settlement values. Accordingly, on December 31, 2016, we updated and extended our asbestos liability estimate through 2059, the generally accepted end point.
Following our experience in the tort system post the Dummitt decision, we entered into several, increasingly similar, group settlements with various plaintiff firms, the most recent of which was in the fourth quarter of 2019. We expect this new trend
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of these types of group settlements to continue, and accordingly, effective as of December 31, 2019, we updated our estimate of the asbestos liability, including revised costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against us through the same expected end point of 2059. Our estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from our experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, we recorded an additional liability of $255 million as of December 31, 2019.
An aggregate liability of $712 million is recorded as of December 31, 2019 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2059, of which approximately 85% is attributable to settlement and defense costs for future claims projected to be filed through 2059. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $670 million as of December 31, 2020. It is not possible to forecast when cash payments related to the asbestos liability will be fully expended; however, it is expected such cash payments will continue for a number of years past 2059, due to the significant proportion of future claims included in the estimated asbestos liability and the lag time between the date a claim is filed and when it is resolved. None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments. The current portion of the total estimated liability at December 31, 2020 and 2019 is $66.5 million and $65.0 million, respectively and represents our best estimate of total asbestos costs expected to be paid during the twelve-month period. Such amount is based upon the actuarial model together with our prior year payment experience for both settlement and defense costs.
We have made our best estimate of the costs through 2059. Through December 31, 2020, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate. In addition to this claims experience, we considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, we determined that no change in the estimate was warranted for the period ended December 31, 2020.
Insurance Coverage and Receivables. Prior to 2005, a significant portion of our settlement and defense costs were paid by our primary insurers. With the exhaustion of that primary coverage, we began negotiations with our excess insurers to reimburse us for a portion of our settlement and/or defense costs as incurred. To date, we have entered into agreements providing for such reimbursements, known as “coverage-in-place,” with eleven of our excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for our present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. Similarly, under a variant of coverage-in-place, we have entered into an agreement with a group of insurers confirming the aggregate amount of available coverage under the subject policies and setting forth a schedule for future reimbursement payments to us based on aggregate indemnity and defense payments made. In addition, with ten of our excess insurer groups, we entered into agreements settling all asbestos and other coverage obligations for an agreed sum and received a total of $82.5 million in aggregate as a result of those settlements. Reimbursements from insurers for past and ongoing settlement and defense costs allocable to their policies have been made in accordance with these coverage-in-place and other agreements. All these agreements include provisions for mutual releases, indemnification of the insurer and, for coverage-in-place, claims handling procedures. With the agreements referenced above, we have concluded settlements with all but two of our solvent excess insurers with policies expected to respond to the aggregate costs included in the liability estimate. The first such insurer, which issued a single applicable policy, has been paying for many years the shares of defense and indemnity costs we have allocated to it, subject to a reservation of rights. The second insurer issued a single applicable policy in a layer of coverage that we do not anticipate reaching until many years from now, and, prior to the policy being reached, we anticipate opening a dialogue with that insurer about the execution of a suitable agreement. There are no pending legal proceedings between us and any insurer contesting our asbestos claims under our insurance policies.
In conjunction with developing the aggregate updated liability estimate referenced above, we also developed an updated estimate of probable insurance recoveries for our asbestos liabilities. In developing this estimate, we considered our coverage-in-place and other settlement agreements described above, as well as several additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits. In addition, the timing and amount of reimbursements will vary because our insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage. In addition to consulting with legal counsel on these insurance matters, we retained insurance consultants to assist management in the estimation of probable insurance recoveries based upon the aggregate liability estimate described above and assuming the continued viability of all solvent insurance carriers. Based upon the analysis of policy terms and other factors noted above by our legal counsel, and incorporating risk mitigation judgments by us
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
where policy terms or other factors were not certain, our insurance consultants compiled a model indicating how our historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and us. Using the estimated liability as of December 31, 2019 (for claims filed or expected to be filed through 2059), the insurance consultant’s model forecasted that approximately 14% of the liability would be reimbursed by our insurers. While there are overall limits on the aggregate amount of insurance available to us with respect to asbestos claims, certain limits were not reached by the total estimated liability currently recorded by us, and such overall limits did not influence our determination of the asset amount to record. We allocate to ourselves the amount of the asbestos liability (for claims filed or expected to be filed through 2059) that is in excess of available insurance coverage allocated to such years. An asset of $98 million was recorded as of December 31, 2019 representing the probable insurance reimbursement for claims expected through 2059. The asset is reduced as reimbursements and other payments from insurers are received. The asset was $87 million as of December 31, 2020.
We review the estimated reimbursement rate with our insurance consultants on a periodic basis in order to confirm overall consistency with our established reserves. The reviews encompass consideration of the performance of the insurers under coverage-in-place agreements and the effect of any additional lump-sum payments under other insurer agreements. Actual insurance reimbursements vary from period to period, and will decline over time, for the reasons cited above.
Uncertainties. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution. We caution that our estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on past experience that may not prove reliable as predictors; the assumptions are interdependent and no single factor predominates in determining the liability estimate. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law could also change the estimated liability.
The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance reimbursements, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, due to the uncertainties inherent in litigation matters, no assurances can be given regarding the outcome of any litigation, if necessary, to enforce our rights under our insurance policies or settlement agreements.
Many uncertainties exist surrounding asbestos litigation, and we will continue to evaluate our estimated asbestos-related liability and corresponding estimated insurance reimbursement as well as the underlying assumptions and process used to derive these amounts. These uncertainties may result in our incurring future charges or increases to income to adjust the carrying value of recorded liabilities and assets, particularly if the number of claims and settlement and defense costs change significantly, or if there are significant developments in the trend of case law or court procedures, or if legislation or another alternative solution is implemented. Although the resolution of these claims will likely take many years, the effect on the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material.
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, 2020 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.
Goodyear Site
The Goodyear Site was operated by Unidynamics/Phoenix, Inc. (“UPI”), which became an indirect subsidiary in 1985 when we acquired UPI’s parent company, Unidynamics Corporation. UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S. government at the Goodyear Site from 1962 to 1993, under contracts with the Department of Defense and other government agencies and certain of their prime contractors. In 1990, the U.S. Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and carry out certain 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 into a consent decree with the EPA with respect to the Goodyear Site
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 $39.8 million and $46.9 million as of December 31, 2020 and 2019, respectively and as described below, a portion is reimbursable by the U.S. Government. The current portion of the total estimated liability was $10.9 million as of December 31, 2020 and 2019 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, 2020 and 2019, we recorded a receivable of $7.8 million and $9.7 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
Marion, IL Site
We have 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. A predecessor of us 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.
GD-OTS has asked us to participate in a voluntary, multi-party mediation exercise with respect to response costs it has incurred or will incur with respect to the AUS-OU. We and other PRPs executed a non-binding mediation agreement on March 16, 2015, and the U.S. government executed the mediation agreement on August 6, 2015. 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, we entered into discussions directly with GD-OTS and reached an agreement-in-principle with GD-OTS to contribute toward GD-OTS’s past RI-FS costs associated with the first-phase areas for a non-material amount. We 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 we expect in the aggregate to be immaterial. We understand that GD-OTS has also reached agreements-in-principle with the U.S. Government and the other participating PRPs related to the first-phase areas of concern. Negotiations between GD-OTS and the U.S. Government are underway with respect to resolution of the remaining areas of the site, including those portions of the Crab Orchard Site where our predecessor conducted manufacturing and research activities. We at present cannot predict whether these further negotiations will result in an agreement, or when any determination of the ultimate allocable shares of the various PRPs, including the U.S. Government, is likely to be completed. It is not possible at this time to reasonably estimate the total amount of any obligation for remediation of the Crab Orchard Site as a whole because the allocation among PRPs, selection of remediation alternatives, and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made. We notified our insurers of this potential liability and have obtained defense and indemnity coverage, subject to reservations of rights, under certain of our insurance policies.


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Roseland, NJ Site
The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary of the Company in 1985 when the Company acquired Resistoflex’s parent company, UniDynamics Corporation. Resistoflex manufactured specialty lined pipe and fittings at the site from the 1950s until it was closed in the mid-1980s. The Company undertook an extensive soil remediation effort at the Roseland Site following its closure and had been monitoring the Site’s condition in the years that followed. In response to changes in remediation standards, the Company in 2014 began to conduct further site characterization and delineation studies at the Site. The Company is in the late stages of its remediation activities at the Site, which includes a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air testing, all in accordance with the New Jersey Department of Environmental Protection (“NJDEP”) guidelines and directives.

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. We record a provision for a liability for such matters when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions, if any, are reviewed quarterly and adjusted as additional information becomes available. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. 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, 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.
Note 13 – Financing
Our debt as of December 31, 2020 and 2019 consisted of the following:
(in millions) December 31, 2020 2019
Commercial paper $ 27.2  $ 149.4 
364-Day Credit Agreement 348.5  — 
Total short-term borrowings $ 375.7  $ 149.4 
4.45% notes due December 2023
$ 299.1  $ 298.9 
6.55% notes due November 2036
198.4  198.3 
4.20% notes due March 2048
346.2  346.1 
Other deferred financing costs associated with credit facilities (0.8) (1.3)
Total long-term debt $ 842.9  $ 842.0 
Debt discounts and debt issuance costs totaled $6.6 and $6.7 as of December 31, 2020 and 2019, respectively and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.
Commercial paper program - On March 2, 2015, we entered into a commercial paper program (the “CP Program”) from which we may issue short-term, unsecured commercial paper notes (the “Notes”) pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of the Notes outstanding under the CP Program at any time not to exceed $500 million. The Notes 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. On October 23, 2018, we increased the size of our commercial paper program to permit the issuance of commercial paper notes in an aggregate principal amount not to exceed $550 million at any time outstanding. We issued $100 million in January 2020 and $150 million in December 2019 of commercial paper to fund the acquisitions of I&S and Cummins-Allison, respectively. See discussion in Note 2, “Acquisitions” for further details. As of December 31, 2020 and 2019, there was $27.2 million and $149.4 million of outstanding borrowings, respectively.
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364-Day Credit Agreement - On April 16, 2020, we entered into a new senior unsecured 364-day credit facility (the “364-Day Credit Agreement”). We borrowed term loans denominated in dollars (the “Dollar Term Loans”) in an aggregate principal amount equal to $300 million, and term loans denominated in euros (the “Euro Term Loans”) in an aggregate principal amount equal to €40 million under the 364-Day Credit Agreement. Interest on the Dollar Term Loans accrues at a rate per annum equal to (a) a base rate (determined in a customary manner), plus a margin dependent upon ratings of our senior unsecured long-term debt (the “Index Debt Rating”) or (2) an adjusted LIBO rate (determined in a customary manner) for an interest period to be selected by us, plus a margin dependent upon the Index Debt Rating. Interest on the Euro Term Loans accrues at an adjusted LIBO rate (determined in a customary manner) for an interest period to be selected by us, plus a margin. The 364- Day Credit Agreement contains customary affirmative and negative covenants and customary events of default and acceleration for credit facilities of this type.
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 have no sinking fund requirement, but may be redeemed, in whole or part, at our option. These notes do not contain any material debt covenants or cross default provisions. 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. Including debt issuance cost amortization, these notes have an effective annualized interest rate of 4.56%. The notes were issued under an indenture dated as of December 13, 2013. 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.
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. These notes do not contain any material debt covenants or cross default provisions. 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. Including debt issuance cost amortization, these notes have an effective annualized interest rate of 6.67%. The notes were issued under an indenture dated as of April 1, 1991. 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.

4.20% notes due March 2048 - On February 5, 2018, we completed a public offering of $350 million aggregate principal amount of 4.20% Senior Notes due 2048 (the "2048 Notes"). The 2048 Notes bear interest at a rate of 4.20% per annum and mature on March 15, 2048. Interest on the 2048 Notes is payable on March 15 and September 15 of each year, commencing on September 15, 2018. These notes do not contain any material debt covenants or cross default provisions. 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. Including debt issuance cost amortization, these notes have an effective annualized interest rate of 4.29%. The notes were issued under an indenture dated as of February 5, 2018. 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.
Other - As of December 31, 2020, we had open standby letters of credit of $57.9 million issued pursuant to a $183.4 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines. As of December 31, 2019, we had open standby letters of credit of $48.1 million issued pursuant to a $162.2 million uncommitted Letter of Credit Reimbursement Agreement, and certain other credit lines.
Revolving Credit Facility - In December 2017, we entered into a $550 million five year Revolving Credit Agreement (the “2017 Facility”), which replaced an existing $500 million revolving credit facility. The 2017 Facility allows us to borrow, repay, or to
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the extent permitted by the agreement, prepay and re-borrow funds at any time prior to the stated maturity date. The loan proceeds may be used for general corporate purposes including financing for acquisitions. Interest is based on, at our option, (1) a base rate, plus a margin ranging from 0.0% 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 LIBOR 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 2017 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 2017 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 the Company. As of December 31, 2020 and 2019, there were no outstanding borrowings under the 2017 Facility.
As of December 31, 2020, our total debt to total capitalization ratio was 44.4%, computed as follows:
(in millions)
Short-term borrowings $ 375.7 
Long-term debt 842.9 
Total indebtedness 1,218.6 
Total shareholders’ equity 1,528.9 
Capitalization $ 2,747.5 
Total indebtedness to capitalization 44.4  %

Note 14 - Fair Value Measurements
Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 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:
Level 1: Quoted prices in active markets for identical or similar assets and liabilities.
Level 2: 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 3: 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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We are exposed to certain risks related to our ongoing business operations, including market risks related to fluctuation in currency exchange. We use foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on our earnings and cash flows. 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 $34.2 million and $56.6 million as of December 31, 2020 and 2019, respectively. Our derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates. Based on these inputs, the derivatives are classified within Level 2 of the valuation hierarchy. Such derivative receivable amounts are recorded within “Other current assets” on our Consolidated Balance Sheets and were less than $0.1 million and $0.1 million as of the years ended December 31, 2020 and 2019, respectively. Such derivative liability amounts are recorded within “Accrued liabilities” on our Consolidated Balance Sheets and were $0.1 million and less than $0.1 million for the years ended December 31, 2020 and 2019, respectively.
Available-for-sale securities consist of marketable debt securities and rabbi trusts investments. Marketable debt securities consist of commercial paper which are measured at fair value using prices for comparable securities in active markets, and are therefore classified within Level 2 of the valuation hierarchy. The fair value of the commercial paper was $30.0 million as of December 31, 2020. These investments are included in “Other current assets” on our Consolidated Balance Sheets. We also have two rabbi trusts that hold marketable securities for the benefit of participants in the SERP. These investments are measured at fair value using quoted market prices in an active market, and are therefore classified within Level 1 of the valuation hierarchy. The fair value of available-for-sale securities was $1.5 million and $1.4 million as of December 31, 2020 and 2019, respectively. These investments are included in “Other assets” on our Consolidated Balance Sheets.
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 $954.8 million and $922.3 million as of December 31, 2020 and 2019, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15 – Restructuring Charges
Overview
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. These actions include workforce reductions of approximately 1,200 employees, or about 11% of our global workforce, and the exiting of two leased office facilities and one leased warehouse facility.
2019 Repositioning - In the fourth quarter of 2019, we initiated actions to consolidate two manufacturing operations in Europe within our Fluid Handling segment. 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.
2017 Repositioning - In the fourth quarter of 2017, we initiated broad-based repositioning actions designed to improve profitability. These actions included headcount reductions of approximately 300 employees, or about 3% of our global workforce, and select facility consolidations in North America and Europe. In 2020, we adjusted the estimate downward to reflect the impact of employees that chose to voluntarily terminate prior to receiving severance at the conclusion of the actions in North America.
Acquisition-Related Restructuring - In the third quarter of 2018, we initiated actions within our Payment & Merchandising Technologies segment related to the closure of Crane Currency’s printing operations in Sweden, which were transitioned to a new print facility in Malta. These actions included workforce reductions of approximately 170 employees, or less than 2% of our global workforce. There is no remaining liability associated with these actions as of December 31, 2019, and we do not expect to incur additional restructuring charges.
Other Restructuring - In the second quarter of 2020, we recorded other restructuring costs within our Payment & Merchandising Technologies segment. There is no remaining liability associated with these actions as of December 31, 2020, and we do not expect to incur additional restructuring charges.
Restructuring Charges, Net
During the year ended December 31, 2020, we recorded pre-tax charges primarily related to new restructuring actions (“2020 Repositioning”) as described above. These charges are reflected in the Consolidated Statements of Operations as “Restructuring charges, net.”
Restructuring charges, net by segment are as follows:
(in millions) For the year ended December 31, 2020 2019 2018
Fluid Handling (a)
$ 6.1  $ 10.5  $ 6.1 
Payment & Merchandising Technologies (b)
19.1  7.4  2.1 
Aerospace & Electronics (c)
6.5  (0.4) (1.0)
Engineered Materials 0.6  —  — 
Total restructuring charges, net (d)
$ 32.3  $ 17.5  $ 7.2 
(a)
We also recorded related costs of $4.4 million, $8.7 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. These costs primarily relate to facility consolidations and are recorded within Cost of sales and Selling, general and administrative.
(b)
We also recorded related costs of $0.7 million, $0.2 million and $1.6 million for the years ended December 31, 2020, 2019 and 2018, respectively. These costs primarily relate to facility consolidations and are recorded within Cost of sales and Selling, general and administrative.
(c)
We also recorded related costs of $2.7 million and $2.0 million for the year ended December 31, 2019 and 2018, respectively. These costs primarily relate to facility consolidations and are recorded within Cost of sales and Selling, general and administrative.
(d)
We also recorded related costs of $5.1 million, $11.6 million and $7.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. These costs primarily relate to facility consolidations and are recorded within Cost of sales and Selling, general and administrative.




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes our restructuring charges, net by program, cost type and segment for the years ended December 31, 2020, 2019 and 2018:
December 31, 2020 December 31, 2019 December 31, 2018
(in millions) Severance Other Total Severance Other Total Severance Other Total
Fluid Handling $ 3.8  $ —  $ 3.8  $ —  $ —  $ —  $ —  $ —  $ — 
Payment & Merchandising Technologies 16.6  4.6 
(a)
21.2  —  —  —  —  —  — 
Aerospace & Electronics 6.5  —  6.5  —  —  —  —  —  — 
Engineered Materials 0.6  —  0.6  —  —  —  —  —  — 
2020 Repositioning $ 27.5  $ 4.6  $ 32.1  $ —  $ —  $ —  $ —  $ —  $ — 
Fluid Handling $ 6.1 
(b)
$ —  $ 6.1  $ 9.9  $ —  $ 9.9  $ —  $ —  $ — 
2019 Repositioning $ 6.1  $ —  $ 6.1  $ 9.9  $ —  $ 9.9  $ —  $ —  $ — 
Fluid Handling $ (3.8)
(b)
$ —  $ (3.8) $ 0.6  $ —  $ 0.6  $ 6.1  $ —  $ 6.1 
Payment & Merchandising Technologies (0.9)
(b)
(1.5)
(c)
(2.4) 0.3  1.8  2.1  0.1  0.4  0.5 
Aerospace & Electronics —  —  —  —  (0.4) (0.4) —  (1.0) (1.0)
2017 Repositioning $ (4.7)
(b)
$ (1.5)
(c)
$ (6.2) $ 0.9  $ 1.4  $ 2.3  $ 6.2  $ (0.6) $ 5.6 
Payment & Merchandising Technologies $ —  $ —  $ —  $ 1.7  $ 3.6  $ 5.3  $ 1.6  $ —  $ 1.6 
Acquisition-Related Restructuring $ —  $ —  $ —  $ 1.7  $ 3.6  $ 5.3  $ 1.6  $ —  $ 1.6 
Payment & Merchandising Technologies $ 0.3  $ —  $ 0.3  $ —  $ —  $ —  $ —  $ —  $ — 
Other Restructuring $ 0.3  $ —  $ 0.3  $ —  $ —  $ —  $ —  $ —  $ — 
Total $ 29.2  $ 3.1  $ 32.3  $ 12.5  $ 5.0  $ 17.5  $ 7.8  $ (0.6) $ 7.2 
(a)
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.
(b)
Reflects changes in estimates for increases and decreases in costs related to our restructuring programs.
(c)
Reflects a pre-tax gain related to the sale of a facility in 2020.


87

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the cumulative restructuring costs incurred through December 31, 2020 and the remaining costs related to facility consolidations expected to complete these actions as of December 31, 2020:
Cumulative Restructuring Costs Remaining Costs
(in millions) Severance Other Total 2021
Fluid Handling $ 3.8  $ —  $ 3.8  $ — 
Payment & Merchandising Technologies 16.6  4.6  21.2  — 
Aerospace & Electronics 6.5  —  6.5  — 
Engineered Materials 0.6  —  0.6  — 
2020 Repositioning $ 27.5  $ 4.6  $ 32.1  $ — 
Fluid Handling $ 16.0  $ —  $ 16.0  $ 2.6 
2019 Repositioning $ 16.0  $ —  $ 16.0  $ 2.6 
Fluid Handling $ 13.5  $ —  $ 13.5  $ — 
Payment & Merchandising Technologies 11.7  0.7  12.4  — 
Aerospace & Electronics 1.3  (1.4) (0.1) — 
2017 Repositioning $ 26.5  $ (0.7) $ 25.8  $ — 
Restructuring Liability
The following table summarizes the accrual balances related to these restructuring charges by program:
(in millions) 2020 Repositioning 2019 Repositioning 2017 Repositioning Acquisition Related Restructuring Other Restructuring Total
Severance:
Balance at December 31, 2018 $ —  $ —  $ 23.2  $ —  $ —  $ 23.2 
Expense (a)
—  9.9  0.9  1.7  —  12.5 
Utilization —  —  (11.6) (1.7) —  (13.3)
Balance at December 31, 2019 $ —  $ 9.9  $ 12.5  $ —  $ —  $ 22.4 
Expense (a)
27.5  —  —  —  0.3  27.8 
Adjustments (b)
—  6.1  (4.7) —  —  1.4 
Utilization (23.3) —  (3.1) —  (0.3) (26.7)
Balance at December 31, 2020 (c)
$ 4.2  $ 16.0  $ 4.7  $ —  $ —  $ 24.9 
Other Restructuring Costs:
Balance at December 31, 2018 $ —  $ —  $ —  $ —  $ —  $ — 
Expense (a)
—  —  1.4  3.6  —  5.0 
Utilization —  —  (1.2) (3.6) —  (4.8)
Balance at December 31, 2019 $ —  $ —  $ 0.2  $ —  $ —  $ 0.2 
Expense (gain) (a)
4.6  —  (1.5) —  —  3.1 
Utilization (4.6) —  1.3  —  —  (3.3)
Balance at December 31, 2020 $ —  $ —  $ —  $ —  $ —  $ — 
(a) Included within “Restructuring charges, net” in the Consolidated Statements of Operations
(b)
Included within “Restructuring charges, net” in the Consolidated Statements of Operations and reflects changes in estimates for increases and decreases in costs related to our restructuring programs
(c)
Included within Accrued Liabilities in the Consolidated Balance Sheets
88

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None

Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. The Company’s Chief Executive Officer and Principal Financial Officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the year covered by this annual report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and the information is accumulated and communicated to the Company’s Chief Executive Officer and Principal Financial Officer to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Principal Financial Officer have concluded that these controls are effective as of the end of the year covered by this annual report.
Change in Internal Controls over Financial Reporting. During the fourth quarter ended December 31, 2020, there have been no changes in the Company’s internal control over financial reporting, identified in connection with our evaluation thereof, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
Design and Evaluation of Internal Control over Financial Reporting. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we included a report of our management’s assessment of the design and effectiveness of our internal controls as part of this Annual Report on Form 10-K for the year ended December 31, 2020. Our independent registered public accounting firm also attested to, and reported on, our management’s assessment of the effectiveness of internal control over financial reporting. Our management’s report and our independent registered public accounting firm’s attestation report are set forth in Part II, Item 8 of this Annual Report on Form 10-K under the captions entitled “Management’s Responsibility for Financial Reporting” and “Report of Independent Registered Public Accounting Firm.”
89


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Crane Co.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Crane Co. and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 23, 2021, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Responsibility for Financial Reporting” appearing in Item 8. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP
Stamford, Connecticut
February 23, 2021
90

Item 9B. Other Information
None


Part III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by Item 10 is incorporated by reference to the definitive proxy statement with respect to the 2021 Annual Meeting of Shareholders which the Company expects to file with the Commission pursuant to Regulation l4A on or about March 12, 2021 except that such information with respect to Executive Officers of the Registrant is included, pursuant to Instruction 3, paragraph (b) of Item 401 of Regulation S-K, under Part I. The Company’s Corporate Governance Guidelines, the charters of its Management Organization and Compensation Committee, its Nominating and Governance Committee and its Audit Committee and its Code of Ethics are available at www.craneco.com/governance. The information on our website is not part of this report.

Item 11. Executive Compensation
The information required by Item 11 is incorporated by reference to the definitive proxy statement with respect to the 2021 Annual Meeting of Shareholders which the Company expects to file with the Commission pursuant to Regulation 14A on or about March 12, 2021.
 
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Except the information required by Section 201(d) of Regulation S-K which is set forth below, the information required by Item 12 is incorporated by reference to the definitive proxy statement with respect to the 2021 Annual Meeting of Shareholders which the Company expects to file with the Commission pursuant to Regulation 14A on or about March 12, 2021.
As of December 31, 2020: Number of securities to be issued upon exercise of outstanding options,
warrants and rights 		Weighted average
exercise price of
outstanding
options 		Number of securities
remaining available
for future issuance
under equity
compensation plans
(a) (b) (c)
Equity compensation plans approved by security holders:
2013 Stock Incentive Plan (and predecessor plans) —  —  — 
2018 Stock Incentive Plan 3,662,131 
a
$ 68.88  4,184,576 
Equity compensation plans not approved by security holders —  —  — 
Total 3,662,131  $ —  4,184,576 
aIncludes 317,655 restricted share units (“RSUs”), 122,340 deferred stock units (“DSUs”) and 371,614 performance-based restricted share units (“PRSUs”), assuming the maximum potential payout percentage. Actual numbers of shares may vary, depending on actual performance. If the PRSUs included in this total vest at the target performance level as opposed to the maximum level, the aggregate awards outstanding would be 3,476,324. Column (b) does not take RSUs, PRSUs or DSUs into account because they do not have an exercise price.

Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated by reference to the definitive proxy statement with respect to the 2021 Annual Meeting of Shareholders which the Company expects to file with the Commission pursuant to Regulation 14A on or about March 12, 2021.
Item 14. Principal Accounting Fees and Services
The information required by Item 14 is incorporated by reference to the definitive proxy statement with respect to the 2021 Annual Meeting of Shareholders which the Company expects to file with the Commission pursuant to Regulation 14A on or about March 12, 2021.



91

Item 15. Exhibits and Financial Statement Schedules
(a) Consolidated Financial Statements:
 
Page
 Number 
Report of Independent Registered Public Accounting Firm
Page 38
Consolidated Statements of Operations
Page 40
Consolidated Statements of Comprehensive Income (Loss)
Page 41
Consolidated Balance Sheets
Page 42
Consolidated Statements of Cash Flows
Page 43
Consolidated Statements of Changes in Equity
Page 44
Notes to Consolidated Financial Statements
Page 45
(b) Exhibits
Exhibit No.    Description
Exhibit 21   
Exhibit 23.1   
Exhibit 31.1   
Exhibit 31.2   
Exhibit 32.1   
Exhibit 32.2   
Exhibit 101.INS    XBRL Instance Document
Exhibit 101.SCH    XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL    XBRL Taxonomy Calculation Linkbase Document
Exhibit 101.DEF    XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB    XBRL Taxonomy Label Linkbase Document
Exhibit 101.PRE    XBRL Taxonomy Presentation Linkbase Document
Exhibit 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
Exhibits to Form 10-K — Documents incorporated by reference:
(2) Instruments Defining the Rights of Security Holders:
2.1
(3) Certificate of Incorporation and Bylaws:
(4) Instruments Defining the Rights of Security Holders:
(4)(b)(2)
92

(10)
(iii)
Compensatory Plans
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)

Item 16. Form 10-K Summary
Not applicable.

93


Part IV
Signatures
Pursuant to the requirements of Section l3 or l5 (d) of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
CRANE CO.
(Registrant)
 By /s/  MAX H. MITCHELL
Max H. Mitchell
President and Chief Executive Officer
Date 2/23/2021
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Officers
 
/s/ MAX H. MITCHELL   /s/  RICHARD A. MAUE           /s/ CHRISTINA CRISTIANO 
Max H. Mitchell President, Chief Executive Officer and Director  
Richard A. Maue Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
 
Christina Cristiano
Vice President, Controller
Chief Accounting Officer
(Principal Accounting Officer)
Date 2/23/2021 Date 2/23/2021 Date 2/23/2021
Directors
/s/ JAMES L.L. TULLIS /s/  MARTIN R. BENANTE /s/ DONALD G. COOK
James L.L. Tullis Martin R. Benante Donald G. Cook
Date 2/23/2021 Date 2/23/2021 Date 2/23/2021
/s/ MICHAEL DINKINS /s/ RONALD C. LINDSAY /s/  ELLEN MCCLAIN
Michael Dinkins Ronald C. Lindsay Ellen McClain
Date 2/23/2021 Date 2/23/2021 Date 2/23/2021
/s/ CHARLES G. MCCLURE, JR. /s/ JENNIFER M. POLLINO /s/ JOHN S. STROUP
Charles G. McClure, Jr. Jennifer M. Pollino John S. Stroup
Date 2/23/2021 Date 2/23/2021 Date 2/23/2021


94

Exhibit 10(i)
FORM OF INDEMNIFICATION AGREEMENT

    AGREEMENT, effective as of _____________, between Crane Co., a Delaware corporation (the “Company”), and _________________ (“Indemnitee”).

    WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies at a time when it has become increasingly difficult to obtain adequate insurance coverage at reasonable costs;

    WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s continued service to the Company in an effective manner, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the full extent (whether partial or complete) permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies, regardless of any future change in the Certificate of Incorporation, Bylaws, composition of the Board of Directors, or structure of the Company;

    NOW, THEREFORE, in consideration of the premises and of Indemnitee’s service to the Company, directly or indirectly, and intending to be legally bound hereby, the parties hereto agree as follows:

    1.    In the event Indemnitee was, is, or becomes a party to or a witness or other participant in, or is threatened to be made a party to or a witness or other participant in, any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to any such action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (“Claim”) by reason of (or arising in part out of) the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity (an “Indemnifiable Event”), the Company shall indemnify Indemnitee to the full extent permitted by law (the determination of which shall be made by the Reviewing Party referred to below) as soon as practicable but in any event no later than thirty days after written demand is presented to the Company, against any and all expenses (including attorneys’ fees and all other costs, expenses and obligations paid or incurred in connection with investigating, preparing for and defending or participating in the defense of (including on appeal) any Claim relating to any Indemnifiable Event) (collectively “Expenses”), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties or amounts paid in settlement) of such Claim and, if so requested by Indemnitee, the Company shall advance


(within two business days of such request) any and all such Expenses to Indemnitee; provided, however, that (i) the foregoing obligation of the Company shall not apply to a Claim that was commenced by the Indemnitee without the prior approval of the Board of Directors of the Company unless the Claim was commenced after a Change in Control (as defined in Section 5 herein); (ii) the foregoing obligation of the Company shall be subject to the condition that an appropriate person or body (the “Reviewing Party”) shall not have determined (in a written opinion in any case in which the special, independent counsel referred to in Section 4 hereof is involved) that Indemnitee would not be permitted to be indemnified for such Expenses under applicable law; and (iii) if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be indemnified for such Expenses under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid (unless Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, in which event Indemnitee shall not be required to so reimburse the Company until a final judicial determination requiring such reimbursement is made with respect thereto as to which all rights of appeal therefrom have been exhausted or lapsed) and the Company shall not be obligated to indemnify or advance any additional amounts to Indemnitee under this Agreement (unless there has been a determination by a court of competent jurisdiction that the Indemnitee would be permitted to be so indemnified or entitled to such expense advances under applicable law).

    2.    If there has not been a Change in Control of the Company (as hereinafter defined), the Reviewing Party shall be (1) a quorum of the Board of Directors consisting of directors who are not parties to the action, suit or proceeding acting by majority vote, or (2) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, independent legal counsel by the use of a written opinion or (3) the stockholders. If there has been a Change in Control of the Company, the Reviewing Party shall be the special, independent counsel referred to in Section 4 hereof.

    3.    If Indemnitee has not been indemnified by the expiration of the foregoing thirty-day period or received expense advances or if the Reviewing Party determines that Indemnitee would not be permitted to be indemnified or be entitled to receive expense advances within two days of the request therefor in whole or in part under the applicable law, Indemnitee shall have the right to commence litigation seeking from the court a finding that Indemnitee is entitled to indemnification and expense advances or enforcement of Indemnitee’s entitlement to indemnification and expense advances or challenging any determination by the Reviewing Party or any aspect thereof that Indemnitee is not entitled to be indemnified or receive expense advances and the burden of proving that indemnification or advancement of expenses is not appropriate shall be on the Company; any determination by the Reviewing Party in favor of Indemnitee shall be conclusive and binding on the Company, unless facts supplied by Indemnitee which form the basis for the determination are subsequently determined to have been materially incorrect at the time supplied. Indemnitee agrees to bring any such litigation in any court in the states of New York or Delaware having subject matter jurisdiction thereof and in which venue is proper,
        Page 2 of 7

and the Company hereby consents to service of process and to appear in any such proceeding.
    4.    The Company agrees that if there is a Change in Control of the Company (as hereinafter defined), then with respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments and expense advances under this Agreement or any other agreement or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, the Company shall seek legal advice only from special, independent counsel selected by Indemnitee who a majority of the disinterested Directors approves (which approval shall not be unreasonably withheld), and who has not otherwise performed services for the Company or Indemnitee. Such counsel, among other things, shall determine whether and to what extent Indemnitee is permitted to be indemnified or is entitled to expense advances under applicable law and shall render its written opinion to the Company and Indemnitee to such effect. The Company agrees to pay the reasonable fees of the special, independent counsel referred to above and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto except for willful misconduct or gross negligence.

    5.    For purposes of this Agreement, (a) “Change in Control of the Company” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d)(3) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, is or becomes the beneficial owner (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board of Directors or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or if the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company’s assets.

    6.    To the extent Indemnitee is successful in such proceeding, the Company shall indemnify Indemnitee against any and all expenses (including attorneys’ fees) which are incurred by the Indemnitee in connection with any claim asserted or action brought by
        Page 3 of 7

Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or Company Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events and/or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance payment of Expenses or insurance recovery, as the case may be.

    7.    If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of any Claim but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in the defense of any Claim relating in whole or in part to any Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

    8.    For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that Indemnitee is not entitled to indemnification or expense advance or that indemnification or expense advance is not permitted by applicable law.

    9.    The Company represents that it presently has in force and effect Directors’ and Officers’ Liability Insurance on behalf of Indemnitee against certain customary liabilities which may be asserted against or incurred by Indemnitee. The Company hereby agrees that, so long as Indemnitee shall continue to serve in a capacity referred to in Section 1 hereof, and thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee served in any capacity referred to in Section 1 hereof, the Company shall purchase and maintain in effect for the benefit of Indemnitee such insurance providing, in all respects, coverage at least comparable to that presently provided; provided, however, if, in the business judgment of the then Board, either (a) the premium cost for such insurance is substantially disproportionate to the amount of coverage, or (b) the coverage provided by such insurance is so limited by exclusions that there is insufficient benefit from such insurance, then and in that event the Company shall not be required to maintain such insurance but shall and hereby agrees to the full extent permitted by law to hold harmless and indemnify Indemnitee to the fullest extent of the coverage which would otherwise have been provided for the benefit of Indemnitee.

    10.    (a)     In the event of any changes after the date of this Agreement in any applicable law, statute, or rule which expands the right of the Company to indemnify a person serving in a capacity referred to in Section 1 hereof, such change shall be within the purview of Indemnitee’s rights, and the Company’s obligations, under this Agreement. In
        Page 4 of 7

the event of any changes in any applicable law, statute, or rule which narrow the right of the Company to indemnify a person serving in a capacity referred to in Section 1 hereof, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
        (b)    The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of stockholders or disinterested directors, laws and regulations in effect now or in the future, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding such office.

    11.    If the indemnification provided in Section 1 is unavailable and may not be paid to Indemnitee because such indemnification is not permitted by law, then in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the full extent permitted by law, to the amount of expenses, judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and Indemnitee on the other hand from the transaction from which such action, suit or proceeding arose, and (ii) the relative fault of the Company on the one hand and of Indemnitee on the other in connection with the events which resulted in such expenses, judgments, fines or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of Indemnitee on the other shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this paragraph were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

    12.    All obligations of the Company contained herein shall continue during the period Indemnitee serves in a capacity referred to in Section 1 hereof of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Claim relating to an Indemnifiable Event.

    13.    (a)    Promptly after receipt by Indemnitee of notice of the commencement of any Claim relating to an Indemnifiable Event or proceeding in which Indemnitee is made or is threatened to be made a party or a witness, Indemnitee shall notify the Company of the commencement of such Claim; but the omission so to notify the Company shall not relieve the Company from any obligation it may have to indemnify or advance expenses to Indemnitee otherwise than under this Agreement.

        (b)    Indemnitee shall not settle any claim or action in any manner which would impose on the Company any penalty, constraint, or obligation to hold harmless or
        Page 5 of 7

indemnify Indemnitee pursuant to this Agreement without the Company’s prior written consent, which consent shall not be unreasonably withheld.

    14.    If any Claim relating to an Indemnifiable Event, commenced against Indemnitee is also commenced against the Company, the Company shall be entitled to participate therein at its own expense, and, except as otherwise provided hereinbelow, to the extent that it may wish, the Company shall be entitled to assume the defense thereof. After notice from the Company to Indemnitee of its election to assume the defense of any Claim, the Company shall not be obligated to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation, travel and lodging expenses arising out of Indemnitee’s participation in such Claim. Indemnitee shall have the right to employ Indemnitee’s own counsel in such Claim, but the fees and expenses of such counsel incurred after notice from the Company to Indemnitee of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) otherwise authorized by the Company, (ii) Indemnitee shall have reasonably concluded, and so notified the Company, that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of such Claim, or (iii) the Company shall not in fact have employed counsel to assume the defense of such Claim, in which cases the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any claim brought by or on behalf of the Company or its stockholders or as to which Indemnitee shall have made the conclusion set forth in (ii) of this Section 14.

    15.    No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

    16.    In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

    17.    The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder.

    18.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, executors, and personal and legal representatives. This Agreement shall continue in effect regardless
        Page 6 of 7

of whether Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company’s request.    

    19.    The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the full extent permitted by law.

    20.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state, but excluding any conflicts-of-law rule or principle which might refer such governance, construction or enforcement to the laws of another state or country.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.


CRANE CO.



By:________________________________
Name:
Title:



INDEMNITEE


By:________________________________
Name









        Page 7 of 7
Exhibit 10(l)
TIME-SHARING AGREEMENT

This Agreement is made as of April 27, 2020, by and between Crane Co., a corporation incorporated under the laws of the State of Delaware, with principal offices at 100 First Stamford Place, Stamford, Connecticut ("Lessor"), and James L.L. Tullis, an
individual, with his residence at [redacted] ("Lessee");

RECITALS

WHEREAS, Lessor is the owner of that certain Dassault Aviation model Falcon 7X aircraft bearing United States registration number N300CR and manufacturer's serial number 29 ("Aircraft");
WHEREAS, Lessor employs a fully qualified flight crew to operate the Aircraft; and WHEREAS, Lessor and Lessee desire to lease said Aircraft and flight crew on a time
sharing basis as defined in Section 91.501(c)( l ) of the Federal Aviation Regulations (the "FARs").

The parties agree as follows:

1.Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR 91.501(c)(l) and to provide a fully qualified flight crew for all operations pursuant to this Agreement. This Agreement shall commence on the date that it is signed and continue for one (1) year after said date. Thereafter, this Agreement shall be automatically renewed on a month to month basis, unless sooner terminated by either party as hereinafter provided. Either
party may at any time terminate this Agreement upon thirty (30) days written notice to the other party, delivered personally or by certified mail, return receipt requested, at the address for said other party as set forth above.

2.Effective as of the date hereof, Lessee shall pay Lessor for each flight conducted under this Agreement an amount equal to the sum of the following actual expenses of each specific flight as authorized by FAR Part 91.501(d):

(a)Fuel, oil, lubricants, and other additives;
(b)Travel expenses of the crew, including food, lodging and ground transportation;
(c)Hangar and tie down costs away from the Aircraft's base of operation;
(d)Insurance obtained for the specific flight;
(e)Landing fees, airport taxes and similar assessments including, but not limited to IRC Section 4261 and related excise taxes;
(f)Customs, foreign permit, and similar fees directly related to the flight;
(g)In-flight food and beverages;
(h)Passenger ground transportation; and
(i)Flight planning and weather contract services.


Exhibit 10(l)
1.Lessor will pay all expenses related to the operation of the Aircraft when incurred, and will provide an invoice and bill Lessee for the expenses enumerated in paragraph 2 above by the last day of the month following the month in which any flight or flights for the account of Lessee occur. Lessee shall pay Lessor for said expenses within fifteen days of receipt of the invoice and bill therefor.

2.Lessee will provide Lessor with requests for flight time and proposed flight schedules as far in advance of any given flight as possible, and in any case, at least forty-eight hours in advance of Lessee's planned departure. Requests for flight time shall be in a form, whether written or oral, mutually convenient to, and agreed upon by the parties. In addition to the proposed schedules and flight times Lessee shall provide at least the following information for each proposed flight at some time prior to scheduled departure as required by the Lessor or Lessor's flight crew:

a.proposed departure point;
b.destination;
c.date and time of flight;
d.the number of anticipated passengers;
e.the nature and extent of luggage and/or cargo to be carried;
f.the date and time of return flight, if any; and
g.any other information concerning the proposed flight that may be pertinent or required by Lessor or Lessor's flight crew.

3.Lessor shall have final authority over the scheduling of the Aircraft, provided, however, that Lessor will use its best efforts to accommodate Lessee's needs and to avoid conflicts in scheduling.

4.Lessor shall be solely responsible for securing maintenance, preventive maintenance and required or otherwise necessary inspections of the Aircraft, and shall take such requirements into account in scheduling the Aircraft. No period of maintenance, preventative maintenance or inspection shall be delayed or postponed for the purpose of scheduling the Aircraft, unless said maintenance or inspection can be safely conducted at a later time in compliance with all applicable laws and regulations, and within the sound discretion of the pilot in command. The pilot in command shall have final and complete authority to cancel any flight for any reason or condition which in his judgement would compromise the safety of the flight.

5.Lessor shall employ, pay for and provide to Lessee a qualified flight crew for each flight undertaken under this Agreement.

6.In accordance with applicable FARs, the qualified flight crew provided by Lessor will exercise all of its duties and responsibilities in regard to the safety of each flight conducted hereunder. Lessee specifically agrees that the flight crew, in its sole discretion, may terminate any flight, refuse to commence any flight, or take other action which in the considered
judgement of the pilot in command is necessitated by considerations of safety. No such action of

-2-


Exhibit 10(l)

the pilot in command shall create or support any liability for loss, injury, damage or delay to Lessee or any other person. The patties further agree that Lessor shall not be liable for delay or failure to furnish the Aircraft and crew pursuant to this Agreement when such failure is caused by government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor disputes, weather conditions, or acts of God.

1.Lessor will provide such additional insurance coverage as Lessee shall request or require, provided, however, that the cost of such additional insurance shall be borne by Lessee as set forth in paragraph 2(d) hereof. At all times during the term of this Lease, Lessor shall cause to be carried and maintained, at Lessor's cost and expense, physical damage insurance with respect to the Aircraft in an amount no less than the amount set forth below:


Aircraft Physical Damage (No Deductible While
In Motion or Not In Motion)
$ 25,000,000


At all times during the term of this Lease, Lessor shall also cause to be carried and maintained, at Lessor's cost and expense, third party aircraft liability insurance, passenger legal liability insurance, property damage liability insurance, and medical expense insurance in amounts no less than the amounts set forth below:

Combined Liability Coverage for Bodily Injury and Property Damage Including Passengers -
Each Occurrence
$200,000,000
Medical Expense Coverage - Each Person

$    25,000

Lessor shall also bear the cost of paying any deductible amount on any policy of insurance in the event of a claim or loss.

Any policies of insurance carried in accordance with this Lease: (i) shall name Lessee as an additional insured; and (ii) shall contain a waiver by the underwriter thereof of any right of subrogation against Lessee; and (iii) shall provide that in respect of the interests of Lessee, such policies of insurance shall not be invalidated by any action or inaction of Lessor or any other person and shall insure Lessee (subject to the limits of liability and war risk exclusion set forth in such policies) regardless of any breach or any violation of any warranty, declarations or conditions contained in such policies by Lessor or any other person; and (iv) shall provide that if the insurers cancel insurance for any reason whatsoever, or the same is allowed to lapse for non payment of premium, or if there is any material change in policy terms and conditions, such a cancellation, lapse or change shall not be effective as to Lessee. Each liability policy shall be primary without right of contribution from any other insurance which is carried by Lessee or


-3-


Exhibit 10(l)
Lessor and shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

Lessor shall submit this Lease for approval to the insurance canier for each policy of insurance on the Aircraft. Lessor shall arrange for a Certificate of Insurance evidencing appropriate coverage as to the Aircraft and the satisfaction of the requirements set forth above to be given by its insurance carriers to Lessor.

1.Lessee warrants that:

a.he will use the Aircraft for and on account of his own business or personal transportation only, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire;

b.he shall refrain from incurring any mechanics or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft, whether permissible or impermissible under this Agreement, nor shall there be any attempt by any party hereto to convey, mortgage, assign, lease or any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft or do anything or take any action that might mature into such a lien; and

c.during the term of this Agreement, he will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft by a timesharing Lessee.

2.For purposes of this Agreement, the permanent base of operation of the Aircraft shall be Hanger V, 154 Airport Road, White Plains, New York, 10604.

3.Neither this Agreement nor any party's interest herein shall be assignable to any other party whatsoever. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their heirs, representatives and successors.












-4-




4.TRUTH IN LEASING STATEMENT

Exhibit 10(l)
THE AIRCRAFT. A DASSAULT FALCON. MANUFACTURER'S SERIAL NO.
29.CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N300CR. HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERJOD PRECEDING THE DATE OF THIS I.EASE.

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. DURING THE DURUTION OF THIS LEASE, CRANE CO., 100 FIRST STAMFORD PLACE, STAMFORD, CONNECTICUT, IS CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF
THE AIRCRAFT UNDER THIS I.EASE.
AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS D1STR1CT OFFICE.

THE “INSTRUCTIONS FOR C'OMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS" ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.

1.1
THE UNDERSIGNED RICHARD A. MAUE, AS VICE PRESIDENT, CHIEF FINANCIAL OFFICER OFCRANE CO. CERTIFY THAT CRANE CO. IS RESPONSIBLE FOR OPERATIONA L, CONTROL OF THE AIRCRA FT AND THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION
REGULATIONS.
IN WITNESS WHEREOF, the Lessor and Lessee have executed and delivered this Amendment as of the date first above written.

LESSOR:    CRANE CO.

By:     /s/ Richard A. Maue
Name: Richard A. Maue
Title:     SVP and Chief Financial Officer



LESSEE: /s/ James L.L. Tullis
                             James L.L. Tullis









-5-





Exhibit 10(l)
INSTRUCTIONS FOR COMPLIANCE WITH "TRUTH IN LEASING" REQUIREMENTS


1.Mail a copy of the lease to the following address via certified mail, return· receipt requested, immediately upon execution of the lease (14 C.F.R.
91.23 requires that the copy be sent within twenty-four hours. after it is signed):

Federal Aviation Administration Aircraft Registration Branch ATTN: Technical Section
P.O. Box 25724
Oklahoma City, Oklahoma 73125

2.Telephone the nearest Flight Standards District Office at least forty-eight hours prior to the first flight under this lease.

3.Carry a copy of the lease in the aircraft at all times.































-6-





Exhibit 21
Crane Co.
Exhibit 21 to FORM 10-K
Annual Report for the Year Ended December 31, 2020
Subsidiaries of Registrant
The following is a list of the subsidiaries of the registrant and their jurisdictions of incorporation. Except as noted, all of these subsidiaries are wholly owned, directly or indirectly, and all are included in the consolidated financial statements.
"CPI-Kiev" LLC Ukraine
ARDAC Inc. Ohio
Armature d.o.o. Slovenia
Automatic Products (UK) Ltd. UK
Barksdale GmbH Germany
Barksdale, Inc. Delaware
CA-MC Acquisition UK Ltd. UK
Coin Controls International Ltd. UK
Coin Holdings Ltd. UK
Coin Industries Ltd. UK
Coin Overseas Holdings Ltd. UK
Coin Pension Trustees Ltd. UK
CR Holdings C.V. Netherlands
Crane & Co., Inc. Massachusetts
Crane (Asia Pacific) Pte. Ltd. Singapore
Crane AB Sweden
Crane Aerospace, Inc. Delaware
Crane Australia Pty. Ltd. Australia
Crane Canada Co. Canada
Crane Composites Ltd. UK
Crane Composites, Inc. Delaware
Crane Controls, Inc. Delaware
Crane Currency Malta Holding Ltd. Malta
Crane Currency Malta Ltd. Malta
Crane Currency Malta Property Ltd. Malta
Crane Currency Netherlands Holdings B.V. Netherlands
Crane Currency US, LLC Massachusetts
Crane Dutch Holdings B.V. Netherlands
Crane Electronics Corporation Taiwan
Crane Electronics, Inc. Delaware
Crane Environmental Inc. Delaware
Crane European Financing LLC Delaware
Crane Fengqiu (Zhejiang) Pump Company Limited China (4.9%)
Crane Fluid & Gas Systems (Suzhou) Co. Ltd. China
Crane Global Holdings S.L. Spain
Crane Holding AB Sweden
Crane Holdings (Germany) GmbH Germany
Crane Instrumentation & Sampling, Inc. New York
Crane International Capital S.a.r.l. Luxembourg
Crane International Holdings, Inc. Delaware
Crane International Trading (Beijing) Co. Ltd. China
Crane Ireland Ventures Designated Activity Company Ireland
Crane Ltd. UK
Crane Merchandising Systems Ltd. UK
Crane Merchandising Systems, Inc. Delaware
Crane Merger Co. LLC Delaware


Crane Middle East & Africa FZE UAE
Crane Netherlands Holdings B.V. Netherlands
Crane Ningjin Valve Co., Ltd. China
Crane Nuclear, Inc. Delaware
Crane Overseas, LLC Delaware
Crane Payment Innovations AG Switzerland
Crane Payment Innovations GmbH Germany
Crane Payment Innovations International Ltd. UK
Crane Payment Innovations Ltd. UK
Crane Payment Innovations Pty Ltd. Australia
Crane Payment Innovations S.a.r.l. France
Crane Payment Innovations S.r.l. Italy
Crane Payment Innovations, Inc. Delaware
Crane Pension Trustee Company (UK) Limited UK
Crane Process Flow Technologies (India) Pvt. Ltd. India
Crane Process Flow Technologies GmbH Germany
Crane Process Flow Technologies Ltd. UK
Crane Process Flow Technologies S.P.R.L. Belgium
Crane Process Flow Technologies S.r.l. Italy
Crane Pumps and Systems, Inc. Delaware
Crane Resistoflex GmbH Germany
Crane Saudi Limited Liability Company Saudi Arabia
Crane SC Holdings Ltd. UK
Crane Security Technologies, Inc. New Hampshire
Crane Stockham Valve Ltd. UK
Crane Yongxiang (Ningbo) Valve Company Ltd. China (4.9%)
Croning Livarna d.o.o. Slovenia
Cummins Illinois, Inc. Illinois
Cummins-Allison Corp. Indiana
Cummins-Allison GmbH Germany
Cummins-Allison Investment Co. Delaware
Cummins-Allison Ireland Ltd. Ireland
Cummins-Allison Limited Delaware
Cummins-Allison Pty Ltd. Australia
Cummins-Allison SAS France
Cummins-Allison ULC Canada
Delta Fluid Products Ltd. UK
Dopak, Inc. Texas
Dovianus B.V. Netherlands
ELDEC Corporation Washington
ELDEC France S.A.R.L France
Exbrownall Ltd. UK
Exrhodes Ltd. UK
Flow Technology Inc. Ohio
Friedrich Krombach GmbH Armaturenwerke Germany
Hattersly Newman Hender Ltd. UK
Hydro-Aire, Inc. California
Inta-Lok Ltd. UK
Interpoint U.K. Limited UK
MCC Holdings, Inc. Delaware
MEI Australia LLC Delaware
MEI Conlux Holdings (Japan), Inc. Japan
MEI Conlux Holdings (US), Inc. Delaware
MEI de Mexico LLC Delaware
MEI Payment Systems Hong Kong Ltd. Hong Kong
MEI Queretaro S. de R.L. de CV Mexico


Merrimac Industries, Inc. Delaware
Micro-Optic Films LLP India
Money Controls Argentina SA Argentina
Money Controls Holdings Ltd. UK
Multi-Mix Microtechnology SRL Costa Rica
NABIC Valve Safety Products Ltd. UK
Nippon Conlux Co. Ltd. Japan
Noble Composites, Inc. Indiana
P.T. Crane Indonesia Indonesia (51%)
Pegler Hattersly Ltd. UK
Sperryn & Company Ltd. UK
Terminal Manufacturing Co. Delaware
Unidynamics / Phoenix, Inc. Delaware
Viking Johnson Ltd. UK
Visual Physics, LLC Georgia
W.T. Armatur GmbH Germany
Wade Couplings Ltd. UK
Wask Ltd. UK
Westlock Controls Corporation Delaware
Xomox Chihuahua S.A. de C.V. Mexico
Xomox Corporation Ohio
Xomox Corporation de Venezuela C.A. Venezuela
Xomox France S.A.S. France
Xomox Hungary Manufacturing Limited Liability Company Hungary
Xomox International GmbH & Co. OHG Germany
Xomox Japan Ltd. Japan
Xomox Korea Ltd. South Korea
Xomox Sanmar Ltd. India (49%)



Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-202554, 333-224427, 333-142305, 333-142308, 333-158660, 333-158662 on Form S-8 and 333-222781 on Form S-3 of our reports dated February 23, 2021, relating to the consolidated financial statements of Crane Co. and subsidiaries (“the Company”), and the effectiveness of the Company’s internal control over financial reporting appearing in this Annual Report on Form 10-K of Crane Co. for the year ended December 31, 2020.

/s/ Deloitte & Touche LLP
Stamford, Connecticut
February 23, 2021





Exhibit 31.1
CERTIFICATION
I, Max H. Mitchell, certify that:
(1)I have reviewed this Annual Report on Form 10-K of Crane Co.;
(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
By /s/ Max H. Mitchell
Chief Executive Officer
February 23, 2021



Exhibit 31.2
CERTIFICATION
I, Richard A. Maue, certify that:
(1) I have reviewed this Annual Report on Form 10-K of Crane Co.;
(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
By /s/ Richard A. Maue
Senior Vice President
Chief Financial Officer
February 23, 2021



Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Crane Co. (the “Registrant”) on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Max H. Mitchell, Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, hereby certify to the best of my knowledge that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
This Certification accompanies this Annual Report on Form 10-K and shall not be treated as having been filed as part of this Annual Report on Form 10-K.
 
By /s/ Max H. Mitchell
Max H. Mitchell
Chief Executive Officer
February 23, 2021



Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Crane Co. (the “Registrant”) on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard A. Maue, Principal Financial Officer of the Registrant, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, hereby certify to the best of my knowledge that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
This Certification accompanies this Annual Report on Form 10-K and shall not be treated as having been filed as part of this Annual Report on Form 10-K.
 
By /s/ Richard A. Maue
Richard A. Maue
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
February 23, 2021