10q10k10q10k.net

What changed in Crane NXT, Co.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Crane NXT, Co.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+179 added−187 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Crane NXT, Co.'s 2024 10-K

179 paragraphs added · 187 removed · 126 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

21 edited+10 added−15 removed13 unchanged
Biggest changeThe Company has a diverse global workforce located in 29 countries, spanning six continents. At December 31, 2023, we employed approximately 4,000 persons worldwide, of which substantially all were full time employees. In the United States, we employed approximately 2,000 people across 56 locations.
Biggest changeAt December 31, 2024, we employed approximately 4,500 persons worldwide, of which substantially all were full time employees. In the United States, we employed approximately 2,000 people across 42 locations. Employees based in some foreign countries may, from time to time, be represented by works councils or unions or subject to collective bargaining agreements.
Crane NXT, Co. operates through two reportable segments. Crane Payment Innovations CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions. CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions.
Crane NXT, Co. operates through two reportable segments. Crane Payment Innovations (CPI) CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions. CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions.
We are also committed to an inclusive and high-performance culture at all levels of the organization, based on trust and respect. 9 The manufacture and production of our products requires the use of a variety of tools, equipment, materials, and supplies.
We are also committed to an inclusive and high-performance culture at all levels of the organization, based on trust and respect. The manufacture and production of our products requires the use of a variety of tools, equipment, materials, and supplies.
“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 and Combined Financial Statements. Human Capital Resources To remain a premier industrial technology company, it is important that we continue to attract, develop, and retain exceptional talent across our global enterprise.
“Risk Factors.” For further discussion of our environmental matters, please refer to Part II, Item 8 under Note 13, “Commitments and Contingencies,” in the Notes to Consolidated and Combined Financial Statements. Human Capital Resources To remain a premier industrial technology company, it is important that we continue to attract, develop, and retain exceptional talent across our global enterprise.
Recent Transactions Separation On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings.
Separation On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”), through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings.
Although market forces have at times, includin g in 2023, caused increases in the costs of key raw materials, there have been no raw materials shortages that have had a material adverse impact on our business. We believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs.
Although market forces have, at times, caused increases in the costs of key raw materials, there have been no raw materials shortages that have had a material adverse impact on our business. We believe that we will generally be able to obtain adequate supplies of major raw material requirements or reasonable substitutes at acceptable costs.
Reportable Segments For additional information on recent business developments and other information about us and our business, please 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 and Combined Financial Statements for sales, operating profit and assets employed by each segment.
For additional information on recent business developments and other information about us and our business, please 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 4, “Segment Information,” in the Notes to Consolidated and Combined Financial Statements for sales, operating profit and assets employed by each segment.
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.
Our engineering and product development activities are focused on improving existing products, customizing existing products to meet customer requirements, as well as the development of new products. We own numerous patents, trademarks, copyrights, trade secrets and licenses to intellectual property, none of which is of such importance that termination would materially affect our business.
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.
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.
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, 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.
From time to time, we engage in litigation to protect our intellectual property. Raw Materials Our manufacturing operations employ a wide variety of raw materials, including steel, copper, electronic components, aluminum, plastics, cotton, flax, films and various petroleum-based products. We purchase raw materials from many independent sources around the world.
We are a leader in a number of distinct areas including materials and surface technology applied for anti-counterfeiting applications, differentiated capabilities in the design and manufacturing of detection systems, and image recognition software 8 built on advance algorithms to authenticate products.
We are a leader in several distinct areas including materials and surface technology applied for anti-counterfeiting applications, differentiated capabilities in the design and manufacturing of detection systems, digital content protection technology, and image recognition software built on advance algorithms to authenticate products.
The company is a pioneer in advanced, proprietary micro-optics technology for securing physical products, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. We are comprised of two reporting segments: Crane Payment Innovations (“CPI”) and Crane Currency.
The company is a pioneer in advanced, proprietary micro-optics technology for securing physical products, as well as digital authentication, and its sophisticated electronic equipment and associated software leverages proprietary core capabilities with detection and sensing technologies. We are comprised of two reporting segments: Crane Payment Innovations (“CPI”) and Security and Authentication Technologies (“SAT”).
Key research and development and manufacturing facilities are located in the United States, the United Kingdom, Mexico, Japan, and Germany, with additional sales offices across the world. Crane Currency Crane Currency provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products. Facilities are located in the United States, Sweden and Malta.
Key research and development and manufacturing facilities are located in the United States, the United Kingdom, Mexico, Japan, and Germany, with additional sales offices across the world. Security and Authentication Technologies (SAT) SAT provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods, and industrial products.
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.
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.
Credit Facilities We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for (i) a $500 million, five-year revolving credit facility (the “Revolving Facility”) and (ii) a $350 million, 3-year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.
Recent Transactions Credit Facilities We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for a $500 million, five-year revolving credit facility (the “Revolving Facility”), funding under which became available in connection with the Separation.
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 NXT, Co.
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.
For a further discussion of risks related to raw materials, please refer to Item 1A. “Risk Factors.” Government Contracts We have agreements relating to the sale of products to government entities, primarily involving products in our Currency segments. As a result, we are subject to various statutes and regulations that apply to companies doing business with the government.
For a further discussion of risks related to raw materials, please refer to Item 1A. “Risk Factors.” 8 Government Contracts We have agreements relating to the sale of products to government entities, primarily involving products in our Security and Authentication Technologies segment.
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.cranenxt.com. The content of our website is not part of this report. 10
These items are available in the “Investors – Corporate Governance” section of our website at www.cranenxt.com. The content of our website is not part of this report. 10
Our 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.
We are committed to developing our associates personally and professionally by leveraging a structured and disciplined Intellectual Capital (“IC”) process. Our 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.
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 developing our associates personally and professionally by leveraging a structured and disciplined Intellectual Capital (“IC”) process.
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.
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”).
For further discussion of our research and development activities, please refer to Part II, Item 8 under Note 1, “Nature of Operations and Significant Accounting Policies,” in the Notes to Consolidated and Combined Financial Statements. 9 Available Information We file annual, quarterly and current reports and amendments to these reports, proxy statements and other information with the U.S.
Removed
Due to SpinCo’s larger operations, greater tangible assets, greater fair value and greater net sales, in each case, relative to ours, among other factors, SpinCo was considered to be the “accounting spinnor” and therefore is the “accounting successor” to Holdings for accounting purposes, notwithstanding the legal form of the Separation.
Added
On December 9, 2024, we entered into an amendment to the Credit Agreement which increased the Revolving Facility by $200 million to an aggregate $700 million and provided a delayed draw term loan of 300 million British pounds to be used as part of the funding for the De La Rue Authentication Solutions acquisition discussed below, subject to customary closing conditions including the closing of the De La Rue Authentication Solutions transaction.
Removed
Therefore, following the Separation, our historical financial statements are comprised solely of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings.
Added
On March 17, 2023, we also entered into a $350 million, 3-year term loan facility (the “Term Facility”), funding under which became available in connection with the Separation. On December 9, 2024, proceeds from the Revolving Facility were used to repay the outstanding Term Facility.
Removed
On March 31, 2023, we borrowed the full amount of the Term Facility and $245.0 million was repaid as of December 31, 2023. Separation Agreements On April 3, 2023, we entered into definitive agreements with SpinCo in connection with the Separation.
Added
OpSec Acquisition On May 3, 2024, we acquired OpSec Security (“OpSec”), for a base purchase price of $270 million on a cash-free and debt-free basis, subject to customary purchase price adjustments. OpSec is a global leader in brand protection and authentication solutions, serving the world’s most recognized brands, as well as government agencies and financial insti tutions.
Removed
The agreements set forth the terms and conditions of the Separation and provide a framework for Crane NXT’s relationship with SpinCo following the Separation, including the allocation between Crane NXT and SpinCo of Crane NXT’s and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.
Added
De La Rue Authentication Solutions Acquisition On October 15, 2024, we signed a definitive agreement with De La Rue Holdings, a wholly-owned subsidiary of De La Rue plc, to acquire its authentication business (“De La Rue Authentication Solutions”) for 300 million British pounds in cash, subject to customary adjustments.
Removed
These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the Separation, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and an Intellectual Property Matters Agreement (each, as described below).
Added
The transaction is expected to close in the second quarter of 2025, subject to customary closing conditions. De La Rue Authentication Solutions is a leading global provider of digital and physical security and authentication technologies to governments and brands.
Removed
Separation and Distribution Agreement The Separation and Distribution Agreement sets forth, among other things, the agreements between us and SpinCo regarding the principal transactions necessary to effect the Separation. It also sets forth other agreements that govern certain aspects of our ongoing relationship with SpinCo after the completion of the Separation.
Added
De La Rue Authentication Solutions will be included within the Security and Authentication Technologies segment upon close. 7 Reportable Segments In connection with the acquisition of OpSec, we renamed our “Crane Currency” reportable segment to “Security and Authentication Technologies,” which consists of the Crane Currency business and the acquired OpSec business. The CPI segment remains unchanged.
Removed
Transition Services Agreement The Transition Services Agreement provides for the transition of Holdings into two independent, publicly-traded companies following the consummation of the Separation, and provides each party time to replace certain assets and employees that 7 have been allocated to the other party.
Added
SAT also provides brand protection, authentication solutions, and digital content protection across online marketplaces, social media platforms, and websites. These solutions serve various brands, as well as government agencies and financial insti tutions. Key research and development and manufacturing facilities are located in the United States, United Kingdom, Sweden and Malta.
Removed
Under the Transition Services Agreement, we agreed with SpinCo to provide transition service support to the other for various periods of time of up to 18 months in the areas of finance, tax, human resources, legal and information technology.
Added
Our associates are critical to our success, and we are committed to sustaining our culture grounded in our core values: people matter, do the right thing, trusted partner, innovate for growth, always improving. The Company has a diverse global workforce located in 32 countries, spanning six continents.
Removed
Such services are provided on customary commercial terms, and each such service can be terminated prior to the expected termination date of such service if it is no longer required. The Transition Services Agreement was negotiated in the context of a parent-subsidiary relationship and in the context of the Separation.
Added
For a discussion of risks related to employee relations, please refer to Item 1A. “Risk Factors.” Research and Development Research, development and engineering are of critical importance at Crane NXT to maintain our technological leadership in each segment. Activities support existing products, providing new features and enhancements, as well as the development of new products.
Removed
Transactions under this agreement did not have a material impact to our financial statements and services were substantially completed as of December 31, 2023.
Added
Also posted on our website are our Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and 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.
Removed
Tax Matters Agreement The Tax Matters Agreement, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits (including any taxes imposed that are attributable to the failure of the Distribution and certain related transactions to qualify as a transaction that is tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.
Removed
Although enforceable as between the parties, the Tax Matters Agreement will not be binding on the Internal Revenue Service or other tax authorities.
Removed
Employee Matters Agreement The Employee Matters Agreement, among other things, governs Crane NXT’s, SpinCo’s and their respective subsidiaries’ rights, responsibilities and obligations after the Separation with respect to the following matters: (i) employees and former employees (and their respective dependents and beneficiaries) who are or were employed with Crane NXT, SpinCo or their respective subsidiaries, (ii) the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans, (iii) employee compensation plans and director compensation plans, including equity plans, and (iv) other human resources, employment and employee benefits matters.
Removed
Intellectual Property Matters Agreement The Intellectual Property Matters Agreement, among other things, governs the continued ownership and use by Crane NXT and SpinCo of their respective trademarks and trade names that include or are comprised of the term “Crane” in their respective businesses.
Removed
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

37 edited+3 added−7 removed41 unchanged
Biggest changeOur costs are affected by price fluctuations of metals such as steel and copper as well as other raw materials such as electronic components, cotton and flax. We have seen a period of sustained price increases for components and raw materials, which has resulted in, and may continue to result in, increased costs for us.
Biggest changeOur operations require significant amounts of necessary components and raw materials that are critical to our profitability and can fluctuate in price. Our costs are affected by price fluctuations of metals such as steel and copper as well as other raw materials such as electronic components, cotton and flax.
In addition, our operations outside the U.S. are subject to the risks associated with conducting business internationally, including, but not limited to: • economic and political instability, including the risk of geopolitical conflict or territorial incursions, in the countries and regions in which we operate; • the risks of fluctuations in foreign currency exchange rates, primarily the euro, the British pound, the Japanese yen, and the Swedish krona, could adversely affect our reported results, as amounts earned in other countries are translated into U.S. dollars for reporting purposes; and • 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.
In addition, our operations outside the U.S. are subject to the risks associated with conducting business internationally, including, but not limited to: • economic and political instability, including the risk of geopolitical conflict or territorial incursions, in the countries and regions in which we operate; • the risks of fluctuations in foreign currency exchange rates, primarily the Japanese yen, the British pound, the euro, and the Swedish krona, could adversely affect our reported results, as amounts earned in other countries are translated into U.S. dollars for reporting purposes; and • 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.
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.
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 our markets are highly competitive.
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.
Our financial condition, results of operations and cash flow could be affected by changes to any or all 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 Crane Company in the future decides to engage in the type of business we conduct, it may have a competitive advantage over us, which may cause our business, financial condition and results of operations to be materially adversely affected. 15 Because of their positions with us prior to the completion of the separation transaction, certain of our executive officers and directors have a financial interest in shares of Crane Company common stock.
If Crane Company in the future decides to engage in the type of business we conduct, it may have a competitive advantage over us, which may cause our business, financial condition and results of operations to be materially adversely affected. • Because of their positions with us prior to the completion of the separation transaction, certain of our executive officers and directors have a financial interest in shares of Crane Company common stock.
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.
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. To operate more efficiently and control costs, from time to time we execute restructuring activities, which include workforce reductions and facility consolidations.
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 improve productivity, reduce costs and align manufacturing capacity with customer demand.
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. 14 We may be unable to improve productivity, reduce costs and align manufacturing capacity with customer demand.
Continuing ownership of shares of Crane Company common stock and equity awards could create, or appear to create, potential conflicts of interest if we and Crane Company pursue the same corporate opportunities or face decisions that could have different implications for Crane Company and us. Item 1B. Unresolved Staff Comments None
Continuing ownership of shares of Crane Company common stock and equity awards could create, or appear to create potential conflicts of interest if we and Crane Company pursue the same corporate opportunities or face decisions that could have different implications for Crane Company and us. Item 1B. Unresolved Staff Comments None 16
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.
We believe that we 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.
Our operations expose us to the risk of litigation, claims and investigations, including those related to product liability and warranties, and employee, commercial, intellectual property and environmental matters, that could adversely affect our 13 financial condition, results of operations, cash flows and reputation.
Our operations expose us to the risk of litigation, claims and investigations, including those related to product liability and warranties, and employee, commercial, intellectual property and environmental matters, that could adversely affect our financial condition, results of operations, cash flows and reputation.
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.
We could incur significant and/or unexpected costs in our efforts to 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.
Our CPI business 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.
Our CPI 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.
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.
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 considering new products that we develop.
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. A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, and other government regulations.
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. Several factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, and other government regulations.
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.
Item 1A. Risk Factors Our business, financial condition, results of operations and cash flows may be affected by several factors including but not limited to those set forth below.
If we are unable to timely source these components or raw materials, whether resulting from more stringent regulatory requirements; supplier financial condition; disruptions in transportation; an outbreak of a severe public health pandemic; severe weather; or the occurrence or threat of wars, including Russia’s invasion of Ukraine or other conflicts, our operations may be disrupted, or we could experience a delay or temporary stoppage in certain of our manufacturing operations.
If we are unable to timely source these components or raw materials, whether resulting from more stringent regulatory requirements; supplier financial condition; disruptions in transportation; an outbreak of a severe public health pandemic; severe weather; or the occurrence or threat of wars, our operations may be disrupted, or we could experience a delay or temporary stoppage in certain of our manufacturing operations.
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. 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.
Similarly, such macroeconomic fluctuations may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy. 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.
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.
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, including the use of artificial intelligence, new vulnerabilities or other developments will not compromise or breach the security solutions protecting our information technology, networks and systems.
Competitive pressures, including those discussed above, could cause one or more of our business segments to lose 14 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.
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. Additional tax expense or exposures could affect our financial condition, results of operations and cash flows.
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.
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.
Our future results of operations and financial condition could be adversely impacted by intangible asset impairment charges. As of December 31, 2023, we had goodwill and other intangible assets, net of accumulated amortization, of $1,150.1 million, which represented approximately 54% of our total assets.
Our future results of operations and financial condition could be adversely impacted by intangible asset impairment charges. As of December 31, 2024, we had goodwill and other intangible assets, net of accumulated amortization, of $1,375.9 million, which represented approximately 58% of our total assets.
While these are proactive actions to increase our productivity and operating effectiveness, our inability to adequately 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.
For example, we recorded pre-tax restructuring charges in 2024 and 2023. While these are proactive actions to increase our productivity and operating effectiveness, our inability to adequately 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.
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 and availability, inflationary pressures, exchange rates, levels of government spending and deficits, political conditions, extraordinary public health issues such as large-scale health epidemics or pandemics and other challenges that could affect the global economy including impacts associated with any economic sanctions imposed against Russia, including any territory within the Ukraine that Russia has occupied, in response to their invasion of the Ukraine.
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 and availability, inflationary pressures, exchange rates, levels of government spending and deficits, political conditions, market instability, extraordinary public health issues such as large-scale health epidemics or pandemics and other challenges that could affect the global economy including impacts associated with any economic sanctions imposed on countries or regions in which we are doing business.
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.
In addition, such conditions could adversely affect the ability of our customers to obtain financing for significant purchases, result in decreases in or cancellation of orders for our products and services, and impact the ability of our customers to make payments.
If the prices of critical components and raw materials continue to increase or we are unable to pass increased costs of components and raw materials to customers, our results of operations could be adversely affected.
If the prices of critical components and raw materials continue to increase or we are unable to pass increased costs of components and raw materials to customers, our results of operations could be adversely affected. Additionally, a disruption within our supply chain network could adversely affect our results of operations.
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.
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. Our business could be harmed if we are unable to protect our intellectual property.
We are subject to risks related to the Separation that could negatively impact our results including not obtaining the intended tax treatment of the Separation transaction, failure of Crane Company to perform under the various transaction agreements and actual or potential conflicts of interest with Crane Company. • In connection with the Separation, we received an Internal Revenue Service (the “IRS”) ruling (the “IRS Ruling”) on certain issues relevant to the qualification of the distribution under sections 368(a)(1)(D) and 355 of the Internal Revenue Code, based on certain facts and representations set forth in such request.
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. 15 We are subject to risks related to the Separation that could negatively impact our results including not obtaining the intended tax treatment of the Separation transaction, failure of Crane Company to perform under the various transaction agreements and actual or potential conflicts of interest with Crane Company. • In connection with the Separation, we received an Internal Revenue Service (the “IRS”) ruling (the “IRS Ruling”) on certain issues relevant to the qualification of the distribution under sections 368(a)(1)(D) and 355 of the Internal Revenue Code, based on certain facts and representations set forth in such request.
The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs (including in Mexico where our facility operates under the Mexican Maquiladora program, which provides for reduced tariffs and eased import regulations) 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 adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs (including in Mexico where our facility operates under the Mexican Maquiladora program, which provides for reduced tariffs and eased import regulations) 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. 11 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.
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 our business.
A substantial portion of our sales is concentrated in industries that are subject to market conditions which may cause customer demand for our products to be volatile. Global trends in the use of cash as well as increased durability of banknotes could impact demand. Reductions in demand by these industries would reduce the sales and profitability of our business.
We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future.
Net sales by destination outside the U.S. were 48% of our consolidated amounts in 2024. We expect that non-U.S. sales will continue to account for a significant portion of our revenues for the foreseeable future.
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.
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. 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.
In addition, our results in Currency 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 addition, our results in the SAT 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. We conduct a substantial portion of our business outside the U.S. and face risks inherent in non-domestic operations.
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, grow through operations or refinance maturing debt balances at economically favorable interest rates.
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 for growth or refinance maturing debt balances at economically favorable interest rates.
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. Additional tax expense or exposures could affect our financial condition, results of operations and cash flows.
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. If our internal controls are found to be ineffective, our financial results or our stock price may be adversely affected.
Our business is 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.
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. 13 Our business is 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.
Our ability to achieve our growth goals depends in part upon our ability to identify and successfully acquire, finance and integrate companies and businesses at appropriate prices and realize anticipated cost savings.
Our ability to achieve our growth goals depends in part upon our ability to identify and successfully acquire, finance and integrate companies and businesses at appropriate prices and realize anticipated cost savings. 12 Fluctuation in the prices of, or our ability to source, our components and raw materials, and delays in the distribution of our products could adversely affect our results of operations.
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. 12 We compete with other industrial technology businesses for highly qualified employees in the countries in which we operate, and we may not be able to retain our personnel or hire and retain additional personnel needed for us to sustain and grow our business as planned.
We compete with other industrial technology businesses for highly qualified employees in the countries in which we operate, and we may not be able to retain our personnel or hire and retain additional personnel needed for us to sustain and grow our business as planned.
Removed
Fluctuation in the prices of, or our ability to source, our components and raw materials, and delays in the distribution of our products could adversely affect our results of operations. Our operations require significant amounts of necessary components and raw materials that are critical to our profitability and can fluctuate in price.
Added
We have seen a period of sustained price increases for certain raw materials and increased trade tariffs may result in increased costs for us.
Removed
Additionally, a disruption within our supply chain network could adversely affect our results of operations. 11 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.
Added
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.
Removed
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. We conduct a substantial portion of our business outside the U.S. and face risks inherent in non-domestic operations. Net sales by destination outside the U.S. were 44% of our consolidated amounts in 2023.
Added
We are also subject to the anti-bribery laws of other jurisdictions.
Removed
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.
Removed
For example, we recorded pre-tax restructuring charges in 2023 and 2022 related to our 2022 restructuring program.
Removed
If our internal controls are found to be ineffective, our financial results or our stock price may be adversely affected.
Removed
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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+3 added−10 removed0 unchanged
Biggest changeOur cybersecurity program utilizes a risk-based, multi-layered information security approach following the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) and the Center for Internet Security (CIS) critical security controls. Our 16 program has adopted and implemented an approach to identify and mitigate cybersecurity risks that include commercially reasonable technologies for companies with similar risk profiles.
Biggest changeItem 1C. Cybersecurity Risk Management and Strategy Our enterprise risk management includes a comprehensive cybersecurity risk management program with policies, standards, processes and practices based on recognized industry standards and frameworks such as the National Institute of Standards and Technology (NIST), Cybersecurity Framework (CSF) and the Center for Internet Security (CIS) critical security controls.
In the event of a cybersecurity incident, the materiality of the incident will be evaluated and determined with appropriate input from the CEO, CFO, GC, CISO and other key participants in our cybersecurity program, including outside advisors to the extent appropriate. Our CISO, reporting to our CFO, leads our cybersecurity program.
In the event of a cybersecurity incident, the materiality of the incident will be evaluated and determined with appropriate input from the CEO, CFO, GC, CISO and other key participants in our cybersecurity program, including external advisors to the extent appropriate. 17
Cybersecurity Roles and Capabilities Our CISO, in coordination with members of our senior leadership team such as our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and General Counsel (“GC”), works collaboratively across the Company to operate a program designed to protect our business from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans.
Our CISO, in coordination with our cybersecurity teams, and members of our senior leadership team such as our Chief Executive Officer (“CEO”), CFO and General Counsel (“GC”), works collaboratively across the Company to operate a program designed to protect our business from cybersecurity threats and respond to any cybersecurity incidents in accordance with our incident response and recovery plans in real time.
We have established internal reporting processes so that the Board of Directors and the Audit Committee promptly will receive information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. Such processes are evaluated on a regular basis.
We have established internal reporting processes designed to ensure that our Board of Directors and the Audit Committee receive information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.
Cybersecurity represents an important component of our overall approach to enterprise risk management. The Audit Committee receives regular reports, including twice annually from our Chief Information Security Officer (“CISO”), on a wide range of cybersecurity topics, including our cybersecurity program’s performance, emerging threats, capability enhancements, recent developments, evolving standards, technological trends and other relevant topics.
The Audit Committee receives regular reports at least twice annually from our Chief Information Security Officers (“CISO”) on a wide range of cybersecurity topics, including our cybersecurity program’s performance, results of assessments, emerging threats, capability enhancements, and recent developments and trends.
Cybersecurity Identified Risks As of the date of the filing of this Current Report on Form 10-K, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, nor are they reasonably likely to affect, us, including our business strategy, results of operations, or financial conditions.
As of the date of the filing of this Current Report on Form 10-K, we have not identified any risks from a cybersecurity threat or incident that we believe has materially affected or is reasonably likely to materially affect the Company.
Our CISO has more than 20 years of cybersecurity experience and holds CISSP (2002) and CISM (2009) certifications. The cybersecurity team reporting to our CISO is staffed by highly skilled cybersecurity professionals, including both internal staff and external partners.
Our CISO, who reports to our Chief Financial Officer (“CFO”), leads our cybersecurity program and has more than 20 years of cybersecurity experience. The cybersecurity teams reporting to our CISO are staffed by highly skilled cybersecurity professionals, including both internal staff and external partners, with broad knowledge of cybersecurity issues from experience and through training and certifications.
Our security operations team is responsible for detecting, mitigating, and responding to cybersecurity threats through a network of technologies, capabilities, and best practices on a 24/7 basis. This team consists of both internal employees located in several countries as well as a partner organization who supports our security operations team 24/7.
Our cybersecurity teams are responsible for detecting, mitigating, and responding to cybersecurity threats through a network of technologies, capabilities, and best practices on a 24/7 basis.
Item 1C. Cybersecurity Cybersecurity Oversight Our Board of Directors is responsible for ensuring that the Company has effective procedures for assessing and managing risks to the Company’s operations, financial position, and reputation. The Board has charged the Audit Committee with responsibility for monitoring the Company’s processes and procedures for risk assessment and risk management.
Governance, Oversight and Leadership Our Board of Directors has charged the Audit Committee with responsibility for monitoring the Company’s processes and procedures for enterprise risk identification, assessment and management, and cybersecurity represents an important component of our overall approach to enterprise risk management.
Removed
The Audit Committee also receives an update at least quarterly on the Company’s cybersecurity metrics and key performance indicators. Executive leadership is continually apprised of developments pertaining to our cybersecurity program through electronic communications and senior leadership meetings.
Added
Our cybersecurity program includes regular training for personnel, an incident response protocol tested at least annually as part of our enterprise-wide crisis response program, cybersecurity insurance, and regular assessments through activities such as penetration testing, and compliance audits performed on our information technology networks and systems by both our internal cybersecurity teams and external service providers.
Removed
To facilitate the success of our cybersecurity risk management program, multidisciplinary teams are deployed to address cybersecurity threats. Through ongoing communications with these teams, our CISO and senior leadership team monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time.
Added
Although we have continued to invest in our due diligence, onboarding, and monitoring capabilities over external partners with whom we do business, including our third-party vendors and service providers, our control over the security posture of, and ability to monitor the cybersecurity practices of, such external partners remains limited, and there can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the cybersecurity infrastructure owned or controlled by such external partners.
Removed
Our CISO is responsible to communicate potential and actual cybersecurity incidents to our senior leadership team in a prompt manner.
Added
When we do become aware that an external partner has experienced such compromise or failure, we attempt to mitigate our risk, including by terminating such external partner’s connection to our information technology networks and systems where appropriate. For more information on cybersecurity risks and how they affect our business, operating results and financial condition, refer to Item 1A, Risk Factors.
Removed
Many team members have one or more industry recognized cybersecurity certifications such as Certified Information Systems Security Professional (CISSP), Global Information Assurance Certification (GIAC), Certified Information Security Manager/Auditor (CISM/CISA). In addition, our CEO, CFO and GC each hold undergraduate and graduate degrees in their respective fields, and each have extensive experience managing risks at Crane NXT and at similar companies.
Removed
Cybersecurity Risk Management and Strategy Our cybersecurity policies, standards, processes and practices are fully integrated into our enterprise risk management programs and are based on recognized frameworks and other applicable standards. Our cybersecurity program has comprehensive processes for assessing, identifying, and managing material risks from cybersecurity threats.
Removed
Our cybersecurity program is regularly assessed through activities such as penetration tests, internal audit assessments, an annual external PCI compliance audit in the CPI business, and ISO 27001 re-certification in the Currency business.
Removed
The results of these assessments are reported to our Audit Committee, and we adjust our cybersecurity policies, standards, processes and practices to reduce cybersecurity risk based on the information provided by these exercises and assessments. Our cybersecurity team also conducts an annual incident response exercise that includes executive leaders to ensure alignment should we experience a cybersecurity incident.
Removed
We provide regular training and awareness for personnel regarding cybersecurity threats as a means to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.
Removed
We could be adversely affected in the future by any information system or technology network failure or breach in data security, including any such failure or breach involving personally identifiable or other confidential information, any non-compliance with our contractual or other legal obligations regarding such information, or any violation of our privacy and security policies with respect to such information.
Removed
See also Item 1A, Risk Factors, “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.” 17

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeProperties The following is a summary of our principal facilities as of December 31, 2023: Facilities - Owned Location Crane Payment Innovations Crane Currency Corporate Total Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Manufacturing United States 2 663,558 6 852,773 — — 8 1,516,331 Europe 2 242,212 1 490,501 — — 3 732,713 Other international 2 294,666 — — — — 2 294,666 6 1,200,436 7 1,343,274 — — 13 2,543,710 Non-Manufacturing United States 3 135,689 3 18,811 — — 6 154,500 Europe 1 11,000 — — — — 1 11,000 4 146,689 3 18,811 — — 7 165,500 Facilities - Leased Location Crane Payment Innovations Crane Currency Corporate Total Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Manufacturing United States — — 1 141,049 — — 1 141,049 Europe — — 1 269,098 — — 1 269,098 — — 2 410,147 — — 2 410,147 Non-Manufacturing United States 37 203,373 1 119,528 3 18,503 41 341,404 Canada 2 11,704 — — — — 2 11,704 Europe 1 20,053 — — — — 1 20,053 Other international 6 23,257 — — — — 6 23,257 46 258,387 1 119,528 3 18,503 50 396,418 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. 18
Biggest changeProperties The following is a summary of our principal facilities as of December 31, 2024: Facilities - Owned Location Crane Payment Innovations Security and Authentication Technologies Corporate Total Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Manufacturing United States 2 663,558 6 852,773 — — 8 1,516,331 Europe 2 242,212 1 490,501 — — 3 732,713 Other international 2 294,666 — — — — 2 294,666 6 1,200,436 7 1,343,274 — — 13 2,543,710 Non-Manufacturing United States 3 135,689 3 18,811 — — 6 154,500 Europe 1 11,000 — — — — 1 11,000 4 146,689 3 18,811 — — 7 165,500 Facilities - Leased Location Crane Payment Innovations Security and Authentication Technologies Corporate Total Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Number Area (sq. ft.) Manufacturing United States — — 3 338,798 — — 3 338,798 Europe — — 2 324,151 — — 2 324,151 — — 5 662,949 — — 5 662,949 Non-Manufacturing United States 15 143,233 8 181,993 2 18,253 25 343,479 Canada 2 11,704 — — — — 2 11,704 Europe 2 31,734 6 39,626 — — 8 71,360 Other international 6 22,063 10 36,407 — — 16 58,470 25 208,734 24 258,026 2 18,253 51 485,013 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. 18

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 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 and Combined Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 19 Part II
Biggest changeItem 3. Legal Proceedings. Discussion of legal matters is incorporated by reference to Part II, Item 8 under Note 13, “Commitments and Contingencies,” in the Notes to Consolidated and Combined Financial Statements. Item 4. Mine Safety Disclosures. Not applicable. 19 Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures Page 19 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Page 20 Item 6. [Reserved] Page 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk Page 34 Item 8.
Biggest changeItem 4. Mine Safety Disclosures Page 19 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Page 20 Item 6. [Reserved] Page 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Page 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk Page 35 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Crane NXT, Co. common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol "CXT". As of December 31, 2023, there were 1,561 holders of record of Crane NXT, Co. common stock.
Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Crane NXT, Co. common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol "CXT". As of December 31, 2024, there were 1,468 holders of record of Crane NXT, 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 April 4, 2023, the date our stock commenced regular-way trading on the NYSE, through December 31, 2023 with the total stockholder returns for the S&P 500 Index and the S&P MidCap 400 Capital Goods Index.
Stock Performance Graph The following chart compares the total stockholder returns (stock price increase plus reinvested dividends) on our common stock from April 4, 2023, the date our stock commenced regular-way trading on the NYSE, through December 31, 2024 with the total stockholder returns for the S&P 500 Index and the S&P MidCap 400 Capital Goods Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+37 added−29 removed31 unchanged
Biggest changeIntellectual Property Matters Agreement The Intellectual Property Matters Agreement, among other things, governs the continued ownership and use by Crane NXT and SpinCo of their respective trademarks and trade names that include or are comprised of the term “Crane” in their respective businesses. 23 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results from Operations - For the Years ended December 31, 2023, 2022 and 2021 For the year ended December 31, 2023 vs 2022 Favorable / (Unfavorable) Change 2022 vs 2021 Favorable / (Unfavorable) Change (in millions, except %) 2023 2022 2021 $ % $ % Net sales: Crane Payment Innovations $ 886.4 $ 874.3 $ 805.7 $ 12.1 1.4 % $ 68.6 8.5 % Crane Currency 504.9 465.6 539.4 39.3 8.4 % (73.8) (13.7) % Total net sales $ 1,391.3 $ 1,339.9 $ 1,345.1 $ 51.4 3.8 % $ (5.2) (0.4) % Sales growth: Core business $ 57.5 4.3 % $ 60.1 4.5 % Foreign exchange (6.1) (0.5) % (65.3) (4.9) % Total sales growth $ 51.4 3.8 % $ (5.2) (0.4) % Cost of sales $ 737.2 $ 713.7 $ 746.2 $ (23.5) (3.3) % $ 32.5 4.4 % Selling, general and administrative $ 366.8 $ 318.7 $ 323.4 $ (48.1) (15.1) % $ 4.7 1.5 % Restructuring charges (gains), net $ 0.5 $ 6.2 $ (3.7) $ 5.7 (91.9) % $ (9.9) NM Operating profit (loss): Crane Payment Innovations $ 242.8 $ 217.1 $ 164.5 $ 25.7 11.8 % $ 52.6 32.0 % Crane Currency 116.3 117.3 145.1 (1.0) (0.9) % (27.8) (19.2) % Corporate (72.3) (33.1) (30.4) (39.2) (118.4) % (2.7) (8.9) % Total operating profit $ 286.8 $ 301.3 $ 279.2 $ (14.5) (4.8) % $ 22.1 7.9 % Operating margin: Crane Payment Innovations 27.4 % 24.8 % 20.4 % Crane Currency 23.0 % 25.2 % 26.9 % Total operating margin 20.6 % 22.5 % 20.8 % 24 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Items Affecting Comparability of Reported Results The comparability of our results for the years ended December 31, 2023, 2022 and 2021 is affected by the following significant items: The Separation Following the Separation, our historical financial statements are comprised solely of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated and combined financial statements and accounting records of Holdings.
Biggest changeDiscussions of 2022 items and year-to-year comparisons between 2023 and 2022 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 Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. 23 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results from Operations - For the Years ended December 31, 2024, 2023 and 2022 For the year ended December 31, 2024 vs 2023 Favorable / (Unfavorable) Change 2023 vs 2022 Favorable / (Unfavorable) Change (in millions, except %) 2024 2023 2022 $ % $ % Net sales: Crane Payment Innovations $ 873.2 $ 886.4 $ 874.3 $ (13.2) (1.5) % $ 12.1 1.4 % Security and Authentication Technologies 613.6 504.9 465.6 108.7 21.5 % 39.3 8.4 % Total net sales $ 1,486.8 $ 1,391.3 $ 1,339.9 $ 95.5 6.9 % $ 51.4 3.8 % Sales growth: Core sales $ 15.7 1.1 % $ 57.5 4.3 % Foreign exchange (6.2) (0.4) % (6.1) (0.5) % Acquisitions 86.0 6.2 % — — % Total sales growth $ 95.5 6.9 % $ 51.4 3.8 % Cost of sales $ 821.7 $ 737.2 $ 713.7 $ (84.5) (11.5) % $ (23.5) (3.3) % Selling, general and administrative $ 386.2 $ 366.8 $ 318.7 $ (19.4) (5.3) % $ (48.1) (15.1) % Restructuring charges $ 10.1 $ 0.5 $ 6.2 $ (9.6) NM $ 5.7 91.9 % Operating profit (loss): Crane Payment Innovations $ 228.4 $ 242.8 $ 217.1 $ (14.4) (5.9) % $ 25.7 11.8 % Security and Authentication Technologies 110.9 116.3 117.3 (5.4) (4.6) % (1.0) (0.9) % Corporate (70.5) (72.3) (33.1) 1.8 2.5 % (39.2) (118.4) % Total operating profit $ 268.8 $ 286.8 $ 301.3 $ (18.0) (6.3) % $ (14.5) (4.8) % Operating margin: Crane Payment Innovations 26.2 % 27.4 % 24.8 % Security and Authentication Technologies 18.1 % 23.0 % 25.2 % Total operating margin 18.1 % 20.6 % 22.5 % NON-GAAP FINANCIAL MEASURES References to "core," such as "core sales," exclude currency effects and, where applicable, the first-year impacts of acquisitions and divestitures.
Recent Transactions Separation On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings.
Separation On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings.
Net debt is comprised of components disclosed above which are presented on our Consolidated and Combined Balance Sheets. Net capitalization, a non-GAAP measure, represents Net Debt plus Equity. We report our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP).
Net debt is comprised of components disclosed above which are presented on our Consolidated Balance Sheets. Net capitalization, a non-GAAP measure, represents Net Debt plus Equity. We report our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP).
We do not believe that any discrete event or adjustment to an individual contract within the aggregate changes in contract estimates for 2023, 2022 or 2021 was material to the consolidated and combined statements of operations for such annual periods. Income Taxes.
We do not believe that any discrete event or adjustment to an individual contract within the aggregate changes in contract estimates for 2024, 2023 or 2022 was material to the consolidated and combined statements of operations for such annual periods. Income Taxes.
Credit Ratings As of December 31, 2023, Crane NXT’s Corporate Rating was BB+ by S&P Global Ratings with a Stable Outlook and Ba1 with a Stable Outlook by Moody’s Investor Services. Our senior secured debt was rated BB+ by S&P Global Ratings with a Stable outlook and Baa3 with a Stable Outlook by Moody’s Investor Service.
Credit Ratings As of December 31, 2024, Crane NXT’s Corporate Rating was BB+ by S&P Global Ratings with a Stable Outlook and Ba1 with a Stable Outlook by Moody’s Investor Services. Our senior secured debt was rated BB+ by S&P Global Ratings with a Stable outlook and Baa3 with a Stable Outlook by Moody’s Investor Service.
(b) Pension benefits are funded by the respective pension trusts. The postretirement benefit component of the obligation is approximately $1.1 million per year for which there is no trust and will be directly funded by us. Pension benefits are included through 2033.
(b) Pension benefits are funded by the respective pension trusts. The postretirement benefit component of the obligation is approximately $1.0 million per year for which there is no trust and will be directly funded by us. Pension benefits are included through 2034.
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 32 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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.
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.
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 monthly. In 2023, the Company recognized approximately $211 million in revenue over time related to products. These estimates are subject to uncertainties and require judgment.
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 monthly. In 2024, the Company recognized approximately $208 million in revenue over time related to products. These estimates are subject to uncertainties and require judgment.
Our operations are comprised of two segments, Crane Payment Innovations (“CPI”) and Crane Currency: • CPI provides electronic equipment and associated software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions.
Our operations are comprised of two segments, Crane Payment Innovations (“CPI”) and Security and Authentication Technologies (“SAT”): • CPI provides electronic equipment and software leveraging extensive and proprietary core capabilities with various detection and sensing technologies for applications including verification and authentication of payment transactions.
Our current cash balance, together with cash we expect to generate from future operations and borrowings available under our revolving credit facility, is expected to be sufficient to finance our short- and long-term capital requirements. In addition, we believe our credit ratings afford us adequate access to public and private debt markets.
Our current cash balance, together with cash we expect to generate from future operations along with borrowings available under the Credit Agreement, is expected to be sufficient to finance our short- and long-term capital requirements. In addition, we believe our credit ratings afford us adequate access to public and private debt markets.
We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line of the Consolidated and Combined Statement of Operations, while accrued interest and penalties are included within the related tax liability line of the Consolidated and Combined Balance Sheets.
We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line of the Consolidated and Combined 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.
The agreements set forth the terms and conditions of the Separation and provide a framework for Crane NXT’s relationship with SpinCo following the Separation, including the allocation between Crane NXT and SpinCo of Crane NXT’s and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.
The agreements set forth the terms and conditions of the Separation and provide a framework for our relationship with SpinCo following the Separation, including the allocation between us and SpinCo of our and SpinCo’s assets, liabilities and obligations attributable to periods prior to, at and after the Separation.
A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is set forth in Item 8 under Note 9, "Income Taxes" in the Notes to Consolidated and Combined Financial Statements. 28 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (in millions) For the year ended December 31, 2023 2022 2021 Net cash (used for) provided by: Operating activities $ 276.3 $ 306.0 $ 277.0 Investing activities (31.1) (21.3) (15.8) Financing activities (252.5) (135.0) (298.1) Effect of exchange rates on cash and cash equivalents 3.8 (20.2) (7.0) (Decrease) increase in cash and cash equivalents $ (3.5) $ 129.5 $ (43.9) Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares.
A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is set forth in Item 8 under Note 10, "Income Taxes" in the Notes to Consolidated and Combined Financial Statements. 28 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES (in millions) For the year ended December 31, 2024 2023 2022 Net cash provided by (used for): Operating activities $ 214.1 $ 276.3 $ 306.0 Investing activities (318.0) (31.1) (21.3) Financing activities 62.1 (252.5) (135.0) Effect of exchange rates on cash, cash equivalents and restricted cash (12.0) 3.8 (20.2) (Decrease) increase in cash, cash equivalents and restricted cash $ (53.8) $ (3.5) $ 129.5 Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio; by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio; by paying dividends and repaying prepayable debt.
We are a leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets. Our primary end markets include central banks and a wide range of consumer related end markets including retail and gaming.
We are a leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets. Our primary end markets include governments and a wide range of consumer-related end markets including convenience merchandising (vending), retail and gaming.
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.
The effect of a change in tax rates on deferred income taxes is recognized in income in the period when the change is enacted. 32 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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.
Our indebtedness as of December 31, 2023 was as follows: • $103.1 million related to the Term Facility; • $198.6 million of 6.55% notes due 2036; and • $346.6 million of 4.20% notes due 2048. See Item 8 under Note 13, “Financing,” in the Notes to Consolidated and Combined Financial Statements for details regarding our financing arrangements.
Our indebtedness as of December 31, 2024 was as follows: • $210.0 million related to the Revolving Facility; • $198.7 million of 6.55% notes due 2036; and • $346.8 million of 4.20% notes due 2048. See Item 8 under Note 14, “Financing,” in the Notes to Consolidated and Combined Financial Statements for details regarding our financing arrangements.
Transaction Related Expenses In connection with the Separation, we have incurred transaction related expenses of $20.9 million for the year ended December 31, 2023 recorded in “Selling, general and administrative” in the Consolidated and Combined Statements of Operations. Separation costs primarily consist of professional service fees.
Transaction Related Expenses We incurred transaction related expenses of $19.9 million for the year ended December 31, 2024, and $22.0 million for the year ended December 31, 2023, recorded in “Selling, general and administrative” in the Consolidated and Combined Statements of Operations. These transaction related expenses primarily consist of professional service fees incurred in connection with acquisitions and the Separation.
(c) As the timing of future cash outflows is uncertain, the following long-term liabilities (and related balances) are excluded from the above table: gross unrecognized tax benefits of $16.5 million and related gross interest and penalties of $2.8 million. 30 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, 2023 2022 Short-term borrowings $ 4.6 $ 299.7 Long-term debt 640.3 545.1 Total debt $ 644.9 $ 844.8 Equity $ 964.0 $ 783.8 Capitalization $ 1,608.9 $ 1,628.6 Debt to capitalization 40.1 % 51.9 % Total debt $ 644.9 $ 844.8 Less cash and cash equivalents 227.2 230.7 Net debt (a) $ 417.7 $ 614.1 Equity $ 964.0 $ 783.8 Net capitalization (a) $ 1,381.7 $ 1,397.9 Net debt to equity (a) 43.3 % 78.3 % Net debt to net capitalization (a) 30.2 % 43.9 % (a) Net debt, a non-GAAP measure, represents total debt less cash and cash equivalents.
(c) As the timing of future cash outflows is uncertain, the following long-term liabilities (and related balances) are excluded from the above table: gross unrecognized tax benefits of $8.1 million and related gross interest and penalties of $1.3 million. 30 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, 2024 2023 Short-term borrowings $ 210.0 $ 4.6 Long-term debt 540.6 640.3 Total debt $ 750.6 $ 644.9 Equity $ 1,064.9 $ 964.0 Capitalization $ 1,815.5 $ 1,608.9 Debt to capitalization 41.3 % 40.1 % Total debt $ 750.6 $ 644.9 Less cash and cash equivalents 165.8 227.2 Net debt (a) $ 584.8 $ 417.7 Equity $ 1,064.9 $ 964.0 Net capitalization (a) $ 1,649.7 $ 1,381.7 Net debt to equity (a) 54.9 % 43.3 % Net debt to net capitalization (a) 35.4 % 30.2 % (a) Net debt, a non-GAAP measure, represents total debt less cash and cash equivalents.
These increases were partially offset by net transfers to Crane of $285.2 million, cash dividends of $23.7 million, and changes in pension and postretirement plan assets and benefit obligations, net of tax of $5.2 million. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS APPLICATION OF CRITICAL ACCOUNTING ESTIMATES Our Consolidated and Combined Financial Statements are prepared in accordance with accounting principles generally accepted in the United States.
These increases were partially offset by currency translation adjustment of $50.9 million, cash dividends of $36.6 million, and changes in pension and postretirement plan assets and benefit obligations, net of tax of $3.1 million. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS APPLICATION OF CRITICAL ACCOUNTING ESTIMATES Our Consolidated and Combined Financial Statements are prepared in accordance with accounting principles generally accepted in the United States.
The following table summarizes our fixed cash obligations as of December 31, 2023: Payment due by Period (in millions) Total 2024 2025 -2026 2027 -2028 2029 and after Debt (a) $ 655.0 $ 4.6 $ 5.2 $ 95.2 $ 550.0 Fixed interest payments 536.2 27.8 55.6 55.6 397.2 Operating lease payments 79.6 9.4 13.7 9.3 47.2 Purchase obligations 42.0 41.5 0.5 — — Pension and postretirement benefits (b) 49.2 4.9 9.2 9.6 25.5 Other long-term liabilities reflected on Consolidated and Combined Balance Sheets (c) — — — — — Total $ 1,362.0 $ 88.2 $ 84.2 $ 169.7 $ 1,019.9 (a) Debt includes scheduled principal payments.
The following table summarizes our fixed cash obligations as of December 31, 2024: Payment due by Period (in millions) Total 2025 2026 -2027 2028 -2029 2030 and after Debt (a) $ 550.0 $ — $ — $ — $ 550.0 Fixed interest payments 508.4 27.8 55.6 55.6 369.4 Operating lease payments 95.1 13.6 19.0 13.1 49.4 Purchase obligations 39.9 38.0 1.9 — — Pension and postretirement benefits (b) 45.6 4.8 8.5 9.0 23.3 Other long-term liabilities reflected on Consolidated Balance Sheets (c) — — — — — Total $ 1,239.0 $ 84.2 $ 85.0 $ 77.7 $ 992.1 (a) Debt includes scheduled principal payments.
INCOME TAX (in millions, except %) For the year ended December 31, 2023 2022 2021 Income before tax — U.S. $ 97.4 $ 163.9 $ 173.9 Income before tax — non-U.S. 142.4 84.4 52.2 Income before tax — worldwide $ 239.8 $ 248.3 $ 226.1 Provision for income taxes $ 51.5 $ 43.4 $ 48.1 Effective tax rate 21.5 % 17.5 % 21.2 % 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.
INCOME TAX (in millions, except %) For the year ended December 31, 2024 2023 2022 Income before tax — U.S. $ 78.2 $ 97.4 $ 163.9 Income before tax — non-U.S. 148.2 142.4 84.4 Income before tax — worldwide $ 226.4 $ 239.8 $ 248.3 Provision for income taxes $ 42.3 $ 51.5 $ 43.4 Effective tax rate 18.7 % 21.5 % 17.5 % Our effective tax rate is affected by both recurring and discrete items, including the mix of jurisdictional earnings, acquisitions and dispositions, changes in the valuation of our deferred tax assets and liabilities, changing regulations, the continued availability of statutory tax credits and deductions, and examinations initiated by tax authorities around the world.
Investing Activities Cash used for investing activities consists of cash used for capital expenditures. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems. We expect capital expenditures of approximately $50 million in 2024. Cash used for investing activities was $31.1 million in 2023, compared with $21.3 million in 2022.
Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems. We expect capital expenditures of approximately $30 million in 2025. Cash used for investing activities was $318.0 million in 2024, compared with $31.1 million in 2023. The increase in cash used for investing activities was primarily driven by the OpSec acquisition.
Recent Accounting Pronouncements Information regarding new accounting pronouncements is included in Item 8 under Note 1 to the Consolidated and Combined Financial Statements. 33
Recent Accounting Pronouncements Information regarding new accounting pronouncements is included in Item 8 under Note 1 to the Consolidated and Combined Financial Statements. 34 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Increases were offset by lower volumes, primarily in the Currency segment, unfavorable mix in the Crane Payment Innovations segment, unfavorable foreign currency translation and higher net restructuring charges. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRANE PAYMENT INNOVATIONS (in millions, except %) For the year ended December 31, 2023 2022 2021 Net sales by product line: Payment Acceptance and Dispensing Products $ 758.7 $ 752.2 $ 692.2 Services 127.7 122.1 113.5 Total net sales $ 886.4 $ 874.3 $ 805.7 Cost of sales $ 439.4 $ 444.1 $ 432.9 Selling, general and administrative (a) $ 204.2 $ 213.1 $ 208.3 Operating profit $ 242.8 $ 217.1 $ 164.5 Assets $ 1,279.1 $ 1,266.1 $ 1,286.4 Backlog $ 216.8 $ 372.9 $ 313.7 Operating margin 27.4 % 24.8 % 20.4 % (a) Selling, general and administrative expense includes net restructuring charges of $0.5 million in 2023, $6.2 million in 2022 and net restructuring gains of $0.9 million in 2021. 2023 compared to 2022 Sales increased by $12.1 million, or 1.4%, to $886.4 million in 2023, driven by higher core sales of $21.3 million, or 2.4%, offset by unfavorable foreign currency translation of $9.2 million, or 1.0%. • Sales of Payment Acceptance and Dispensing Products increased $6.5 million, or 0.9%, to $758.7 million in 2023.
Both segments achieved productivity gains. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRANE PAYMENT INNOVATIONS (in millions, except %) For the year ended December 31, 2024 2023 2022 Net sales by product line: Payment Acceptance and Dispensing Products $ 739.9 $ 758.7 $ 752.2 Services 133.3 127.7 122.1 Total net sales $ 873.2 $ 886.4 $ 874.3 Cost of sales $ 440.4 $ 439.4 $ 444.1 Selling, general and administrative (a) $ 204.4 $ 204.2 $ 213.1 Operating profit $ 228.4 $ 242.8 $ 217.1 Assets $ 1,187.1 $ 1,279.1 $ 1,266.1 Backlog $ 145.8 $ 216.8 $ 372.9 Operating margin 26.2 % 27.4 % 24.8 % (a) Selling, general and administrative expense includes restructuring charges of $10.1 million, $0.5 million and $6.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. 2024 compared to 2023 Sales decreased by $13.2 million, or 1.5%, to $873.2 million in 2024, driven by lower core sales of $6.9 million, or 0.8%, and unfavorable foreign currency translation of $6.3 million, or 0.7%. • Sales of Payment Acceptance and Dispensing Products decreased $18.8 million, or 2.5%, to $739.9 million in 2024.
CPI also provides advanced automation solutions, and processing systems, field service solutions, and remote diagnostics and productivity software solutions. • Crane Currency provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products.
CPI also provides advanced automation solutions, processing systems, field service solutions, remote diagnostics and productivity software solutions. • SAT provides advanced security solutions based on proprietary technology for securing physical products, including banknotes, consumer goods and industrial products. SAT also provides brand protection, authentication solutions, and digital content protection across online marketplaces, social media platforms, and websites.
The increase reflected higher core sales of $15.5 million, or 2.1%, primarily due to favorable pricing, partially offset by unfavorable foreign currency translation of $9.0 million, or 1.2%, primarily reflecting the weakening of the Japanese Yen, British pound and Australian dollar against the U.S. dollar. • Service revenue increased by $5.6 million, or 4.6%, to $127.7 million in 2023, primarily driven by favorable pricing.
Included in the sales decrease was unfavorable foreign currency translation of $6.3 million, or 0.8%, primarily reflecting the weakening of the Japanese Yen, partially offset by the strengthening of the British pound against the U.S. dollar. • Service revenue increased by $5.6 million, or 4.4%, to $133.3 million in 2024, primarily driven by favorable pricing.
Related party interest expense decreased by $11.9 million, or 82.6%, in 2023 compared with 2022 as 2023 only included the period prior to the Separation.
Related party interest expense decreased by $2.5 million, or 100%, in 2024 compared with 2023 as related party interest expense was only incurred in the period prior to the Separation.
The increase primarily reflected favorable pricing net of inflation, and productivity gains of $85.6 million, or 52.0%, partially offset by unfavorable mix of $17.9 million, or 10.9%, net restructuring charges of $7.1 million, or 4.3%, and unfavorable foreign currency translation of $6.6 million, or 4.0%. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRANE CURRENCY (in millions, except %) For the year ended December 31, 2023 2022 2021 Net sales $ 504.9 $ 465.6 $ 539.4 Cost of sales $ 297.8 $ 269.6 $ 313.3 Selling, general and administrative (a) $ 90.8 $ 78.7 $ 81.0 Operating profit $ 116.3 $ 117.3 $ 145.1 Assets $ 814.4 $ 863.3 $ 812.7 Backlog $ 243.0 $ 192.7 $ 124.3 Operating margin 23.0 % 25.2 % 26.9 % (a) Selling, general and administrative expense includes net restructuring gains of $2.8 million in 2021. 2023 compared to 2022 Banknote and security product sales increased by $39.3 million, or 8.4%, to $504.9 million in 2023, reflecting higher core sales of $36.2 million, or 7.8%, predominantly driven by higher sales in international markets, as well as favorable foreign currency translation of $3.1 million, or 0.7%.
The decrease primarily reflected unfavorable mix of $36.3 million, or 15.0%, the impact of lower volumes of $14.4 million, or 5.9%, higher restructuring charges of $9.6 million, or 4.0%, and unfavorable foreign currency translation of $2.9 million, or 1.2%, partially offset by favorable pricing, lower material and other manufacturing costs and productivity gains of $41.8 million, or 17.2%, and the impact of cost saving actions of $9.1 million, or 3.7%. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SECURITY AND AUTHENTICATION TECHNOLOGIES (in millions, except %) For the year ended December 31, 2024 2023 2022 Net sales by product line: Banknotes and Security Products $ 521.9 $ 500.4 $ 461.0 Authentication Products and Solutions 91.7 4.5 4.6 Total net sales $ 613.6 $ 504.9 $ 465.6 Cost of sales $ 381.3 $ 297.8 $ 269.6 Selling, general and administrative $ 121.4 $ 90.8 $ 78.7 Operating profit $ 110.9 $ 116.3 $ 117.3 Assets $ 1,178.2 $ 814.4 $ 863.3 Backlog $ 248.3 $ 243.0 $ 192.7 Operating margin 18.1 % 23.0 % 25.2 % 2024 compared to 2023 Sales increased by $108.7 million, or 21.5%, to $613.6 million in 2024, primarily reflecting the sales benefit from the OpSec acquisition of $86.0 million, or 17.0%, and higher core sales of $22.6 million, or 4.5%. • Banknote and security product sales increased by $21.5 million, or 4.3%, to $521.9 million in 2024, driven by higher sales in international markets. • Authentication products and solutions sales increased by $87.2 million to $91.7 million in 2024, driven by the sales benefit from the OpSec acquisition.
Corporate expense increased by $2.7 million, or 8.9%, in 2022 compared with 2021 primarily related to higher compensation and benefit costs. 27 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTEREST AND MISCELLANEOUS INCOME, NET (in millions) For the year ended December 31, 2023 2022 2021 Interest income $ 1.1 $ 0.2 $ 0.1 Interest expense $ (48.1) $ (41.9) $ (41.8) Related party interest expense* $ (2.5) $ (14.4) $ (16.1) Miscellaneous income, net $ 2.5 $ 3.1 $ 4.7 * Related party interest with Crane Company incurred prior to the Separation.
INTEREST AND MISCELLANEOUS INCOME, NET (in millions) For the year ended December 31, 2024 2023 2022 Interest income $ 1.6 $ 1.1 $ 0.2 Interest expense $ (47.8) $ (48.1) $ (41.9) Related party interest expense* $ — $ (2.5) $ (14.4) Miscellaneous income, net $ 3.8 $ 2.5 $ 3.1 * Related party interest with Crane Company incurred prior to the Separation.
Credit Facilities We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for (i) a $500 million, five-year revolving credit facility (the “Revolving Facility”) and (ii) a $350 million, 3-year term loan facility (the “Term Facility”), funding under each of which became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.
As of December 31, 2024, the term of the Transition Services Agreement has expired. 22 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Recent Transactions Credit Facilities We are party to a senior secured credit agreement (the “Credit Agreement”) entered into on March 17, 2023, which provides for a $500 million, five-year revolving credit facility (the “Revolving Facility”), funding under which became available in connection with the Separation.
Therefore, following the Separation, our historical financial statements are comprised solely of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings.
As such, our financial statements for periods prior to the Separation are comprised of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings. Separation Agreements On April 3, 2023, we entered into definitive agreements with SpinCo in connection with the Separation.
Cost of sales increased by $11.2 million, or 2.6%, to $444.1 million in 2022, as increased manufacturing costs and unfavorable mix, were partially offset by favorable foreign currency translation, productivity gains and lower volumes.
Cost of sales increased by $1.0 million, or 0.2%, to $440.4 million in 2024, as lower material and other manufacturing costs, the impact of lower sales volumes and productivity gains were more than offset by unfavorable mix.
In 2023, equity increased $180.2 million as a result of the dividend from Crane of $275.0 million, net income attributable to common shareholders of $188.3 million, currency translation adjustment of $18.1 million, and the impact of equity-based awards and related settlement activities of $12.9 million.
In 2024, equity increased $100.9 million as a result of net income attributable to common shareholders of $184.1 million, and the impact of equity-based awards and related settlement activities of $7.4 million.
Our 2023 effective tax rate of 21.5% is higher than the prior year’s comparable period due to the mix in jurisdictional earnings. The Organization for Economic Co-operation and Development (OECD) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon by over 140 member jurisdictions including the United States.
The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon by over 140 member jurisdictions including the United States. Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions.
Financing Activities Financing cash flows consist primarily of dividend payments to shareholders, repayments of indebtedness, proceeds from the issuance of long-term debt and debt issuance cost on new credit facilities. Cash used for financing activities was $252.5 million in 2023, compared with $135.0 million in 2022.
Financing Activities Cash provided by (used for) financing activities consists primarily of d ividend payments to shareholders, repayments of indebtedness, and proceeds from our credit facilities . Cash provided by financing activities was $62.1 million in 2024, compared with cash used for financing activities of $252.5 million in 2023.
Selling, general and administrative expense increased by $4.8 million, or 2.3%, to $213.1 million in 2022, primarily reflecting higher net restructuring charges and higher selling costs, partially offset by favorable foreign currency translation. Operating profit increased by $52.6 million, or 32.0%, to $217.1 million in 2022.
Selling, general and administrative expense increased by $0.2 million, or 0.1%, to $204.4 million in 2024, primarily due to higher restructuring charges, partially offset by the impact of cost saving actions, and favorable foreign currency translation. Operating profit decreased by $14.4 million, or 5.9%, to $228.4 million in 2024.
These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the Separation, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and an Intellectual Property Matters Agreement (each, as described below). 22 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Separation and Distribution Agreement The Separation and Distribution Agreement sets forth, among other things, the agreements between us and SpinCo regarding the principal transactions necessary to effect the Separation.
These agreements include the Separation and Distribution Agreement, which contains certain key provisions related to the Separation, as well as a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and an Intellectual Property Matters Agreement.
Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions. We are currently assessing the impact of this minimum tax on our business. See "Application of Critical Accounting Policies" included later in this Item 7 for additional information about our provision for income taxes.
The impact of the adoption of Pillar 2 in 2024 was approximately $2.8 million. See "Application of Critical Accounting Policies" included later in this Item 7 for additional information about our provision for income taxes.
The increase was driven primarily by unfavorable mix of $69.2 million, or 9.7%, partially offset by productivity gains net of inflation, lower volumes and favorable foreign currency translation. Selling, general and administrative expenses increased by $48.1 million, or 15.1%, to $366.8 million in 2023.
Cost of sales increased by $84.5 million, or 11.5%, to $821.7 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition of $66.1 million, or 9.0%, and unfavorable mix, partially offset by productivity gains net of inflation and the impact of lower volumes in CPI.
The change in sales included: • an increase in core sales of $57.5 million, or 4.3%, driven primarily by favorable pricing across both segments, and • unfavorable foreign currency translation of $6.1 million, or 0.5%. Cost of sales increased by $23.5 million, or 3.3%, to $737.2 million in 2023.
OVERALL 2024 compared with 2023 Sales increased by $95.5 million, or 6.9%, to $1,486.8 million in 2024. The change in sales included: • sales benefit from the OpSec acquisition of $86.0 million, or 6.2%, • core sales growth of $15.7 million, or 1.1%, driven primarily by the Currency business, and • unfavorable foreign currency translation of $6.2 million, or 0.4%.
Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in identifying underlying growth trends in our business and facilitate comparison of our sales performance with prior and future periods that are complementary to GAAP metrics.
Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in identifying underlying growth trends in our business and facilitate comparison of our sales performance, for example, with prior and future periods that are complementary to GAAP metrics. 24 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Items Affecting Comparability of Reported Results The comparability of our results for the years ended December 31, 2024, 2023 and 2022 is affected by the following significant items: The Separation Our financial statements for periods prior to the Separation are comprised of combined carve-out financial statements representing only our operations, assets, liabilities and equity on a stand-alone basis derived from the consolidated financial statements and accounting records of Holdings.
There were no allocated transaction-related expenses in connection with the Separation for the years ended December 31, 2022 and 2021. OVERALL 2023 compared with 2022 Sales increased by $51.4 million, or 3.8%, to $1,391.3 million in 2023.
There were no allocated transaction-related expenses in connection with the Separation for the year ended December 31, 2022. Restructuring Charges In response to challenging industry conditions in the CPI segment, we recorded restructuring charges of $10.1 million, $0.5 million and $6.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
CORPORATE (in millions) For the year ended December 31, 2023 2022 2021 Corporate expense $ 72.3 $ 33.1 $ 30.4 Corporate expense increased by $39.2 million, or 118.4%, in 2023 compared with 2022, primarily related to transaction related expenses of $20.9 million, or 63.1%, and higher compensation and benefit costs.
Operating profit decreased by $5.4 million, or 4.6%, to $110.9 million in 2024, reflecting the dilutive impact of the OpSec acquisition of $10.2 million, or 8.7%, higher material and other manufacturing costs net of favorable pricing of $8.4 million, or 7.2%, and unfavorable mix of $3.1 million, or 2.7%, partially offset by productivity gains of $17.9 million, or 15.4%. 27 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CORPORATE (in millions) For the year ended December 31, 2024 2023 2022 Corporate expense $ 70.5 $ 72.3 $ 33.1 Corporate expense decreased by $1.8 million, or 2.5%, in 2024 compared with 2023, primarily related to lower transaction related expenses.
In March 2023, we entered into a senior secured credit agreement, which provides for a $500 million, five-year revolving credit facility and a $350 million, three-year term loan facility. Funding under each facility became available in connection with the Separation, upon the satisfaction of customary conditions of facilities of this type.
On March 17, 2023, we also entered into a $350 million, 3-year term loan facility (the “Term Facility”), funding under which became available in connection with the Separation. On December 9, 2024, proceeds from the Revolving Facility were used to repay the outstanding Term Facility.
Cost of sales increased by $28.2 million, or 10.5%, to $297.8 million in 2023, primarily due to unfavorable mix and higher volumes, partially offset by productivity gains net of inflation, and favorable fixed cost leverage resulting from increased backlog. Unfavorable mix is related to higher U.S. demand for lower denomination banknotes in 2023.
Cost of sales increased by $83.5 million, or 28.0%, to $381.3 million in 2024, primarily due to the impact of the OpSec acquisition of $66.1 million, or 22.2%, higher material and other manufacturing costs, the impact of higher volumes, and unfavorable mix, partially offset by productivity gains.
The decrease was driven primarily by favorable foreign currency translation, lower volumes, and productivity gains, partially offset by increased manufacturing costs and unfavorable mix. Selling, general and administrative expenses decreased by $4.7 million, or 1.5%, to $318.7 million in 2022. The decrease was driven primarily by favorable foreign currency translation, partially offset by increased selling costs.
Selling, general and administrative expenses increased by $19.4 million, or 5.3%, to $386.2 million in 2024. The increase was driven primarily by the impact of the OpSec acquisition of $29.7 million, or 8.1%, partially offset by cost saving actions. Operating profit decreased by $18.0 million, or 6.3%, to $268.8 million in 2024.
The decrease was driven by increased corporate costs related to the Separation and unfavorable mix primarily in the Currency segment, partially offset by favorable pricing, productivity gains, and cost saving actions. 2022 compared with 2021 Sales decreased by $5.2 million, or 0.4%, to $1,339.9 million in 2022.
The decrease was primarily driven by the CPI segment due to unfavorable mix, lower volumes and restructuring charges, partially offset by favorable pricing, lower material and other manufacturing costs, and cost saving actions.
The increase in cash used for investing activities was primarily driven by higher cash used for capital expenditures to support the U.S. Currency redesign program and other capital projects. Cash used for investing activities was $21.3 million in 2022, compared with $15.8 million in 2021.
Operating Activities Cash provided by operating activities was $214.1 million in 2024, compared with $276.3 million in 2023. The decrease in cash provided by operating activities was primarily driven by the timing of shipments which impacted working capital. Investing Activities Cash used for investing activities primarily consists of cash used for capital expenditures and acquisitions.
Please see Item 8 under Note 13, “Financing” to our Consolidated and Combined Financial Statements for additional details. On April 3, 2023, prior to the consummation of the Separation, SpinCo paid a dividend to Holdings in the amount of $275 million.
We had net proceeds of $210 million from the Revolving Facility as of December 31, 2024. As of December 31, 2024, we repaid in full the outstanding $105.0 million debt on the Term Facility. Please see Item 8 under Note 14, “Financing” in the Consolidated and Combined Financial Statements for additional details.
The decrease in cash used for financing activities was primarily driven by lower net transfers to Crane. Financing Arrangements Total debt was $644.9 million and $844.8 million as of December 31, 2023 and 2022, respectively.
Higher net proceeds from the Revolving Facility were offset by higher net repayments on the Term Facility in 2024. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financing Arrangements Total debt was $750.6 million and $644.9 million as of December 31, 2024, and 2023, respectively.
Removed
On March 31, 2023, we borrowed the full amount of the Term Facility and $245.0 million was repaid as of December 31, 2023. Separation Agreements On April 3, 2023, we entered into definitive agreements with SpinCo in connection with the Separation.
Added
On December 9, 2024, we entered into an amendment to the Credit Agreement which increased the Revolving Facility by $200 million to an aggregate $700 million and provided a delayed draw term loan of 300 million British pounds to be used as part of the funding for the De La Rue Authentication Solutions acquisition discussed below.
Removed
It also sets forth other agreements that govern certain aspects of our ongoing relationship with SpinCo after the completion of the Separation.
Added
OpSec Acquisition On May 3, 2024, we acquired OpSec Security (“OpSec”), for a base purchase price of $270 million on a cash-free and debt-free basis, subject to customary purchase price adjustments. We utilized $210.0 million from our Revolving Facility and cash on hand to fund the acquisition.
Removed
Transition Services Agreement The Transition Services Agreement provides for the transition of Holdings into two independent, publicly-traded companies following the consummation of the Separation, and provides each party time to replace certain assets and employees that have been allocated to the other party.
Added
OpSec is a global leader in brand protection and authentication solutions, serving the world’s most recognized brands, as well as government agencies and financial insti tutions. In connection with the acquisition of OpSec, we renamed our “Crane Currency” reportable segment to “Security and Authentication Technologies,” which consists of the Crane Currency business and the acquired OpSec business.
Removed
Under the Transition Services Agreement, we agreed with SpinCo to provide transition service support to the other for various periods of time of up to 18 months in the areas of finance, tax, human resources, legal and information technology.
Added
The integration of OpSec into our SAT segment is on track. De La Rue Authentication Solutions Acquisition On October 15, 2024, we signed a definitive agreement with De La Rue Holdings, a wholly-owned subsidiary of De La Rue plc, to acquire its authentication business (“De La Rue Authentication Solutions”) for 300 million British pounds in cash, subject to customary adjustments.
Removed
Such services are provided on customary commercial terms, and each such service can be terminated prior to the expected termination date of such service if it is no longer required. The Transition Services Agreement was negotiated in the context of a parent-subsidiary relationship and in the context of the Separation.
Added
The transaction is expected to close in the second quarter of 2025, subject to customary closing conditions. Transaction costs incurred for the year ended December 31, 2024, were $6.5 million. De La Rue Authentication Solutions is a leading global provider of digital and physical security and authentication technologies to governments and brands.
Removed
Transactions under this agreement did not have a material impact to our financial statements and services were substantially completed as of December 31, 2023.
Added
De La Rue Authentication Solutions will be included within the Security and Authentication Technologies segment upon close. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Removed
Tax Matters Agreement The Tax Matters Agreement, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits (including any taxes imposed that are attributable to the failure of the Distribution and certain related transactions to qualify as a transaction that is tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.
Added
In the SAT segment, the decrease in operating profit was driven by the dilutive impact of the OpSec acquisition and higher material and other manufacturing costs, partially offset by favorable pricing in the Currency business.
Removed
Although enforceable as between the parties, the Tax Matters Agreement will not be binding on the Internal Revenue Service or other tax authorities.
Added
The decrease reflected lower core sales of $12.5 million, or 1.6%, as favorable pricing was more than offset by lower volumes primarily in gaming.
Removed
Employee Matters Agreement The Employee Matters Agreement, among other things, governs Crane NXT’s, SpinCo’s and their respective subsidiaries’ rights, responsibilities and obligations after the Separation with respect to the following matters: (i) employees and former employees (and their respective dependents and beneficiaries) who are or were employed with Crane NXT, SpinCo or their respective subsidiaries, (ii) the allocation of assets and liabilities generally relating to employees, employment or service-related matters and employee benefit plans, (iii) employee compensation plans and director compensation plans, including equity plans, and (iv) other human resources, employment and employee benefits matters.
Added
Selling, general and administrative expense increased by $30.6 million, or 33.7%, to $121.4 million in 2024, primarily due to the impact of the OpSec acquisition of $29.7 million, or 32.7%.
Removed
The increase was driven primarily by higher administrative expenses related to professional services to support the Separation, including transaction related expenses of $20.9 million, or 6.6%, and higher compensation and benefit costs. Operating profit decreased by $14.5 million, or 4.8%, to $286.8 million in 2023.
Added
Our 2024 effective tax rate of 18.7% is lower than the prior year’s comparable period due to the mix in jurisdictional earnings and release of uncertain tax positions due to the expiration of statute of limitations.
Removed
The change in sales included: • unfavorable foreign currency translation of $65.3 million, or 4.9%, and • an increase in core sales of $60.1 million, or 4.5%, driven primarily by favorable pricing, partially offset by lower volumes. Cost of sales decreased by $32.5 million, or 4.4%, to $713.7 million in 2022.
Added
The increase in cash provided by financing activities was primarily driven by the redemption of senior notes in 2023.
Removed
Operating profit increased by $22.1 million, or 7.9%, to $301.3 million in 2022. The increase was driven by favorable pricing and productivity gains, primarily in the Crane Payment Innovations segment.
Added
As of December 31, 2024, we had $956.6 million of goodwill and $419.3 million of net intangible assets, of which $45.5 million were intangibles with indefinite useful lives included within intellectual property rights.
Removed
Cost of sales decreased by $4.7 million, or 1.1%, to $439.4 million in 2023, as lower volumes, productivity gains and favorable foreign currency translation, were partially offset by unfavorable mix. Selling, general and administrative expense decreased by $8.9 million, or 4.2%, to $204.2 million in 2023, primarily reflecting lower performance-based compensation and cost saving actions.
Added
As of December 31, 2023, we had $841.2 million of goodwill and $308.9 million of net intangible assets, of which $45.5 million were intangibles with indefinite useful lives included within intellectual property rights. Our business acquisitions have typically resulted in the recognition of goodwill and other intangible assets.
Removed
Operating profit increased by $25.7 million, or 11.8%, to $242.8 million in 2023.
Added
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 and Combined Financial Statements.
Removed
The increase primarily reflected favorable pricing net of inflation, and productivity gains, of $51.8 million, or 23.9%, and cost saving actions of $10.4 million, or 4.8%, partially offset by unfavorable mix of $21.6 million, or 9.9%, and lower volumes of $16.6 million, or 7.6%. 2022 compared to 2021 Sales increased by $68.6 million, or 8.5%, to $874.3 million in 2022, driven by higher core sales of $103.6 million, or 12.9%, offset by unfavorable foreign currency translation of $35.1 million, or 4.4%. • Sales of Payment Acceptance and Dispensing Products increased $60.0 million, or 8.7%, to $752.2 million in 2022.
Added
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.

… 36 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed3 unchanged
Biggest changeAs of December 31, 2023, a hypothetical 1% increase in prevailing interest rates would increase our 2023 interest expense by approximately $1.1 million. • Based on a sensitivity analysis as of December 31, 2023, a 10% change in the foreign currency exchange rates for the year ended December 31, 2023 would have impacted our net earnings by approximately $10.7 million, due primarily to the euro, British pound and Japanese yen.
Biggest changeAs of December 31, 2024, a hypothetical 1% increase in prevailing interest rates would increase our 2024 interest expense by approximately $2.1 million. • Based on a sensitivity analysis as of December 31, 2024, a 10% change in the foreign currency exchange rates for the year ended December 31, 2024 would have impacted our net earnings by approximately $10.3 million, due primarily to the euro, Japanese yen, and British pound.
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. • 84% of our year-end portfolio is comprised of fixed-rate debt; therefore, the effect of a market change in interest rates would not be significant.
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. • 72% of our year-end portfolio is comprised of fixed-rate debt; therefore, the effect of a market change in interest rates would not be significant.
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. 34
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. 35
Total debt outstanding was $644.9 million as of December 31, 2023, which was at fixed rates of interest ranging from 4.20% to 6.55% and variable rates of interest of: (a) an adjusted term Secured Overnight Financing Rate (SOFR) plus a credit spread adjustment of 0.10% for the applicable interest period plus a margin ranging from 1.50% to 2.25%, or (b) a base rate plus a m argin ranging from 0.50% to 1.25%, in each case, with such margin determined based on the lower of the ratings of our senior, unsecured long-term debt (the “Ratings”) and our total net leverage ratio.
Total debt outstanding was $750.6 million as of December 31, 2024, which was at fixed rates of interest ranging from 4.20% to 6.55% and variable rates of interest of: (a) an adjusted term Secured Overnight Financing Rate (SOFR) plus a credit spread adjustment of 0.10% for the applicable interest period plus a margin ranging from 1.50% to 2.25%, or (b) a base rate plus a m argin ranging from 0.50% to 1.25%, in each case, with such margin determined based on the lower of the ratings of our senior, unsecured long-term debt (the “Ratings”) and our total net leverage ratio.

Other CXT 10-K year-over-year comparisons