QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
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(check one): | ||||||||||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
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Part I - Financial Information | ||||||||||||||
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Part II - Other Information | ||||||||||||||
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Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions, except per share data) | 2022 | 2021 | |||||||||
Net sales | $ | $ | |||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | |||||||||||
Selling, general and administrative | |||||||||||
Restructuring (gains) charges, net | ( | ||||||||||
Operating profit | |||||||||||
Other income (expense): | |||||||||||
Interest income | |||||||||||
Interest expense | ( | ( | |||||||||
Miscellaneous income, net | |||||||||||
Total other expense | ( | ( | |||||||||
Income from continuing operations before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income from continuing operations attributable to common shareholders | |||||||||||
Income from discontinued operations, net of tax (Note 2) | |||||||||||
Net income attributable to common shareholders | $ | $ | |||||||||
Earnings per basic share: | |||||||||||
Earnings per basic share from continuing operations | $ | $ | |||||||||
Earnings per basic share from discontinued operations | |||||||||||
Earnings per basic share | $ | $ | |||||||||
Earnings per diluted share: | |||||||||||
Earnings per diluted share from continuing operations | $ | $ | |||||||||
Earnings per diluted share from discontinued operations | |||||||||||
Earnings per diluted share | $ | $ | |||||||||
Average shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
Dividends per share | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net income before allocation to noncontrolling interests | $ | $ | |||||||||
Components of other comprehensive income (loss), net of tax | |||||||||||
Currency translation adjustment | ( | ( | |||||||||
Changes in pension and postretirement plan assets and benefit obligation, net of tax | |||||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||
Comprehensive income before allocation to noncontrolling interests | |||||||||||
Less: Noncontrolling interests in comprehensive income | |||||||||||
Comprehensive income attributable to common shareholders | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||
Current insurance receivable - asbestos | ||||||||
Inventories, net: | ||||||||
Finished goods | ||||||||
Finished parts and subassemblies | ||||||||
Work in process | ||||||||
Raw materials | ||||||||
Inventories, net | ||||||||
Other current assets | ||||||||
Current assets held for sale | ||||||||
Total current assets | ||||||||
Property, plant and equipment: | ||||||||
Cost | ||||||||
Less: accumulated depreciation | ||||||||
Property, plant and equipment, net | ||||||||
Long-term insurance receivable - asbestos | ||||||||
Long-term deferred tax assets | ||||||||
Other assets | ||||||||
Intangible assets, net | ||||||||
Goodwill | ||||||||
Total assets | $ | $ |
(in millions, except per share and share data) | March 31, 2022 | December 31, 2021 | ||||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | $ | $ | ||||||
Accounts payable | ||||||||
Current asbestos liability | ||||||||
Accrued liabilities | ||||||||
U.S. and foreign taxes on income | ||||||||
Current liabilities held for sale | ||||||||
Total current liabilities | ||||||||
Long-term debt | ||||||||
Accrued pension and postretirement benefits | ||||||||
Long-term deferred tax liability | ||||||||
Long-term asbestos liability | ||||||||
Other liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Note 11) | ||||||||
Equity: | ||||||||
Preferred shares, par value $ | ||||||||
Common shares, par value $ | ||||||||
Capital surplus | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive loss | ( | ( | ||||||
Treasury stock | ( | ( | ||||||
Total shareholders’ equity | ||||||||
Noncontrolling interests | ||||||||
Total equity | ||||||||
Total liabilities and equity | $ | $ | ||||||
Share data: | ||||||||
Common shares issued | ||||||||
Less: Common shares held in treasury | ||||||||
Common shares outstanding |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Operating activities from continuing operations: | |||||||||||
Net income from continuing operations attributable to common shareholders | $ | $ | |||||||||
Gain on sale of property | ( | ||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Defined benefit plans and postretirement credit | ( | ( | |||||||||
Deferred income taxes | ( | ||||||||||
Cash used for operating working capital | ( | ( | |||||||||
Defined benefit plans and postretirement contributions | ( | ( | |||||||||
Environmental payments, net of reimbursements | ( | ( | |||||||||
Asbestos related payments, net of insurance recoveries | ( | ( | |||||||||
Other | |||||||||||
Total (used for) provided by operating activities from continuing operations | ( | ||||||||||
Investing activities from continuing operations: | |||||||||||
Proceeds from disposition of capital assets | |||||||||||
Capital expenditures | ( | ( | |||||||||
Purchase of marketable securities | ( | ||||||||||
Proceeds from sale of marketable securities | |||||||||||
Total (used for) provided by investing activities from continuing operations | ( | ||||||||||
Financing activities from continuing operations: | |||||||||||
Dividends paid | ( | ( | |||||||||
Reacquisition of shares on open market | ( | ||||||||||
Stock options exercised, net of shares reacquired | |||||||||||
Repayments of commercial paper with maturities greater than 90 days | ( | ||||||||||
Net borrowings from issuance of commercial paper with maturities of 90 days or less | |||||||||||
Total used for financing activities from continuing operations | ( | ( | |||||||||
Discontinued operations: | |||||||||||
Total (used for) provided by operating activities | ( | ||||||||||
Total used for investing activities | ( | ( | |||||||||
(Decrease) increase in cash and cash equivalents from discontinued operations | ( | ||||||||||
Effect of exchange rates on cash and cash equivalents | ( | ( | |||||||||
(Decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Detail of cash used for operating working capital from continuing operations: | |||||||||||
Accounts receivable | $ | ( | $ | ( | |||||||
Inventories | ( | ( | |||||||||
Other current assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued liabilities | ( | ( | |||||||||
U.S. and foreign taxes on income | |||||||||||
Total | $ | ( | $ | ( | |||||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net sales | $ | $ | |||||||||
Cost of sales | |||||||||||
Selling, general and administrative | |||||||||||
Income from discontinued operations | $ | $ | |||||||||
Income tax provision | |||||||||||
Income from discontinued operations, net of tax | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Assets: | ||||||||||||||
Accounts receivable, net | $ | $ | ||||||||||||
Inventories, net | ||||||||||||||
Other current assets | ||||||||||||||
Current assets held for sale (a) | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Other assets | ||||||||||||||
Intangible assets, net | ||||||||||||||
Goodwill | ||||||||||||||
Long-term assets held for sale (a) | ||||||||||||||
Assets held for sale | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued liabilities | ||||||||||||||
Current liabilities held for sale (a) | ||||||||||||||
Long-term deferred tax liability | ||||||||||||||
Other liabilities | ||||||||||||||
Long-term liabilities held for sale (a) | ||||||||||||||
Liabilities held for sale | $ | $ | ||||||||||||
(a) We reasonably expect to close on this transaction within one year and therefore have presented the assets and liabilities as current as of March 31, 2022. |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net sales: | |||||||||||
Aerospace & Electronics | $ | $ | |||||||||
Process Flow Technologies | |||||||||||
Payment & Merchandising Technologies | |||||||||||
Total | $ | $ | |||||||||
Operating profit: | |||||||||||
Aerospace & Electronics | $ | $ | |||||||||
Process Flow Technologies | |||||||||||
Payment & Merchandising Technologies | |||||||||||
Corporate | ( | ( | |||||||||
Total | $ | $ | |||||||||
Interest income | |||||||||||
Interest expense | ( | ( | |||||||||
Miscellaneous income, net | |||||||||||
Income from continuing operations before income taxes | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Assets: | |||||||||||
Aerospace & Electronics | $ | $ | |||||||||
Process Flow Technologies | |||||||||||
Payment & Merchandising Technologies | |||||||||||
Corporate | |||||||||||
Assets held for sale | |||||||||||
Total | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Goodwill: | |||||||||||
Aerospace & Electronics | $ | $ | |||||||||
Process Flow Technologies | |||||||||||
Payment & Merchandising Technologies | |||||||||||
Total | $ | $ |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
(in millions) | 2022 | 2021 | ||||||||||||
Aerospace & Electronics | ||||||||||||||
Commercial Original Equipment | $ | $ | ||||||||||||
Military and Other Original Equipment | ||||||||||||||
Commercial Aftermarket Products | ||||||||||||||
Military Aftermarket Products | ||||||||||||||
Total Aerospace & Electronics | $ | $ | ||||||||||||
Process Flow Technologies | ||||||||||||||
Process Valves and Related Products | $ | $ | ||||||||||||
Commercial Valves | ||||||||||||||
Pumps and Systems | ||||||||||||||
Total Process Flow Technologies | $ | $ | ||||||||||||
Payment & Merchandising Technologies | ||||||||||||||
Payment Acceptance and Dispensing Products | $ | $ | ||||||||||||
Banknotes and Security Products | ||||||||||||||
Total Payment & Merchandising Technologies | $ | $ | ||||||||||||
Net sales | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Contract assets | $ | $ | |||||||||
Contract liabilities | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions, except per share data) | 2022 | 2021 | |||||||||
Net income from continuing operations attributable to common shareholders | $ | $ | |||||||||
Income from discontinued operations, net of tax (Note 2) | |||||||||||
Net income attributable to common shareholders | $ | $ | |||||||||
Average basic shares outstanding | |||||||||||
Effect of dilutive share-based awards | |||||||||||
Average diluted shares outstanding | |||||||||||
Earnings per basic share: | |||||||||||
Earnings per basic share from continuing operations | $ | $ | |||||||||
Earnings per basic share from discontinued operations | |||||||||||
Earnings per basic share | $ | $ | |||||||||
Earnings per diluted share: | |||||||||||
Earnings per diluted share from continuing operations | $ | $ | |||||||||
Earnings per diluted share from discontinued operations | |||||||||||
Earnings per diluted share | $ | $ |
(in millions, except share data) | Common Shares Issued at Par Value | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total Share- holders’ Equity | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||
BALANCE DECEMBER 31, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Reacquisition on open market of | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Exercise of stock options, net of shares reacquired of | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Impact from settlement of share-based awards, net of shares acquired | — | ( | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Changes in pension and postretirement plan assets and benefit obligation, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2022 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
BALANCE DECEMBER 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Impact from settlement of share-based awards, net of shares acquired | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Changes in pension and postretirement plan assets and benefit obligation, net of tax | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
BALANCE MARCH 31, 2021 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
(in millions) | Defined Benefit Pension and Postretirement Items | Currency Translation Adjustment | Total a | |||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Other comprehensive income (loss) before reclassifications | — | ( | ( | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | |||||||||||||||||||
Net period other comprehensive income (loss) | ( | ( | ||||||||||||||||||
Balance as of March 31, 2022 | $ | ( | $ | ( | $ | ( |
a | Net of tax benefit of $ |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2022 | 2021 | ||||||||||||
Amortization of pension items: | ||||||||||||||
Net loss | $ | $ | ||||||||||||
Amortization of postretirement items: | ||||||||||||||
Prior service costs | ( | ( | ||||||||||||
Total before tax | $ | $ | ||||||||||||
Tax impact | ||||||||||||||
Total reclassifications for the period | $ | $ |
Pension | Postretirement | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | |||||||||||||||||||||
Recognized curtailment gain | — | ( | — | — | |||||||||||||||||||
Amortization of prior service cost | ( | ( | |||||||||||||||||||||
Amortization of net loss | |||||||||||||||||||||||
Net periodic benefit | $ | ( | $ | ( | $ | $ |
(in millions) | Pension | Postretirement | |||||||||
Expected contributions in 2022 | $ | $ | |||||||||
Amounts contributed during the three months ended March 31, 2022 | $ | $ |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Effective Tax Rate | |||||||||||
(in millions) | Aerospace & Electronics | Process Flow Technologies | Payment & Merchandising Technologies | Total | ||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | ||||||||||
Currency translation | ( | ( | ( | |||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ |
(in millions) | Three Months Ended March 31, 2022 | Year Ended December 31, 2021 | |||||||||
Balance at beginning of period, net of accumulated amortization | $ | $ | |||||||||
Amortization expense | ( | ( | |||||||||
Currency translation and other | ( | ( | |||||||||
Balance at end of period, net of accumulated amortization | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
(in millions) | Weighted Average Amortization Period of Finite Lived Assets (in years) | Gross Asset | Accumulated Amortization | Net | Gross Asset | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||||||
Intellectual property rights | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Customer relationships and backlog | |||||||||||||||||||||||||||||||||||||||||
Drawings | |||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in millions) | |||||
Remainder of 2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 and after |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Employee related expenses | $ | $ | |||||||||
Warranty | |||||||||||
Current lease liabilities | |||||||||||
Contract liabilities | |||||||||||
Other | |||||||||||
Total | $ | $ |
Three Months Ended March 31, | ||||||||
(in millions) | 2022 | 2021 | ||||||
Balance at beginning of period | $ | $ | ||||||
Expense | ||||||||
Payments / deductions | ( | ( | ||||||
Currency translation | ( | ( | ||||||
Balance at end of period | $ | $ |
Three Months Ended | Year Ended | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2022 | 2021 | 2021 | |||||||||||||||
Beginning claims | |||||||||||||||||
New claims | |||||||||||||||||
Settlements | ( | ( | ( | ||||||||||||||
Dismissals | ( | ( | ( | ||||||||||||||
Ending claims |
Three Months Ended | Year Ended | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
(in millions) | 2022 | 2021 | 2021 | ||||||||||||||
Settlement / indemnity costs incurred (1) | $ | $ | $ | ||||||||||||||
Defense costs incurred (1) | |||||||||||||||||
Total costs incurred | $ | $ | $ | ||||||||||||||
Settlement / indemnity payments | $ | $ | $ | ||||||||||||||
Defense payments | |||||||||||||||||
Insurance receipts | ( | ( | ( | ||||||||||||||
Pre-tax cash payments, net | $ | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Commercial paper | $ | $ | ||||||||||||
Total short-term borrowings | $ | $ | ||||||||||||
$ | $ | |||||||||||||
Other deferred financing costs associated with credit facilities | ( | ( | ||||||||||||
Total long-term debt | $ | $ | ||||||||||||
Debt discounts and debt issuance costs totaled $ |
Three Months Ended March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Process Flow Technologies | $ | $ | ( | ||||||||
Payment & Merchandising Technologies | ( | ||||||||||
Total restructuring (gains) charges, net | $ | $ | ( |
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||||||||||||||
(in millions) | Severance | Other | Total | Severance | Other | Total | |||||||||||||||||
Payment & Merchandising Technologies | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||
2020 Repositioning | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||
Process Flow Technologies | $ | $ | $ | $ | $ | $ | |||||||||||||||||
2019 Repositioning | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Process Flow Technologies 1 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||
2017 Repositioning | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||
Total | $ | $ | $ | $ | ( | $ | ( | $ | ( |
Cumulative Restructuring Costs, Net | |||||||||||
(in millions) | Severance | Other | Total | ||||||||
Aerospace & Electronics | $ | $ | $ | ||||||||
Process Flow Technologies | |||||||||||
Payment & Merchandising Technologies | |||||||||||
2020 Repositioning | |||||||||||
Process Flow Technologies | |||||||||||
2019 Repositioning | |||||||||||
Aerospace & Electronics | ( | ( | |||||||||
Process Flow Technologies | ( | ||||||||||
Payment & Merchandising Technologies | |||||||||||
2017 Repositioning | $ | $ | ( | $ | |||||||
(in millions) | 2019 Repositioning | 2017 Repositioning | Total | |||||||||||
Severance: | ||||||||||||||
Balance at December 31, 2021 (a) | $ | $ | $ | |||||||||||
Utilization | ( | ( | ( | |||||||||||
Balance at March 31, 2022 (a) | $ | $ | $ |
(a) | Included within Accrued Liabilities in the Condensed Consolidated Balance Sheets |
First Quarter | Change | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | $ | % | |||||||||||||||||||
Net sales | $ | 801.1 | $ | 779.6 | $ | 21.5 | 2.8 | % | |||||||||||||||
Cost of sales | 473.8 | 470.5 | 3.3 | 0.7 | % | ||||||||||||||||||
as a percentage of sales | 59.1 | % | 60.4 | % | |||||||||||||||||||
Selling, general and administrative | 193.7 | 182.2 | 11.5 | 6.3 | % | ||||||||||||||||||
as a percentage of sales | 24.2 | % | 23.4 | % | |||||||||||||||||||
Restructuring gain, net | — | (13.1) | 13.1 | NM | |||||||||||||||||||
Operating profit | 133.6 | 140.0 | (6.4) | (4.6) | % | ||||||||||||||||||
Operating margin | 16.7 | % | 18.0 | % | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 0.3 | 0.4 | (0.1) | (25.0) | % | ||||||||||||||||||
Interest expense | (11.1) | (13.6) | 2.5 | 18.4 | % | ||||||||||||||||||
Miscellaneous income, net | 3.5 | 3.9 | (0.4) | (10.3) | % | ||||||||||||||||||
Total other expense | (7.3) | (9.3) | 2.0 | 21.5 | % | ||||||||||||||||||
Income from continuing operations before income taxes | 126.3 | 130.7 | (4.4) | (3.4) | % | ||||||||||||||||||
Provision for income taxes | 31.6 | 27.3 | 4.3 | 15.8 | % | ||||||||||||||||||
Net income from continuing operations attributable to common shareholders | $ | 94.7 | $ | 103.4 | $ | (8.7) | (8.4) | % | |||||||||||||||
Supplemental Data: | |||||||||||||||||||||||
Transaction related expenses 1 | 6.1 | — | 6.1 | NM | |||||||||||||||||||
1 Amounts included within Selling, general & administrative costs. |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net income before allocation to noncontrolling interests | $ | 105.0 | $ | 108.4 | |||||||
Components of other comprehensive income, net of tax | |||||||||||
Currency translation adjustment | (21.6) | (34.9) | |||||||||
Changes in pension and postretirement plan assets and benefit obligation, net of tax | 3.3 | 4.9 | |||||||||
Other comprehensive income, net of tax | (18.3) | (30.0) | |||||||||
Comprehensive income before allocation to noncontrolling interests | 86.7 | 78.4 | |||||||||
Less: Noncontrolling interests in comprehensive income | 0.1 | 0.8 | |||||||||
Comprehensive income attributable to common shareholders | $ | 86.6 | $ | 77.6 |
First Quarter | Change | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | $ | % | |||||||||||||||||||
Net sales by product line: | |||||||||||||||||||||||
Commercial Original Equipment | $ | 58.7 | $ | 54.7 | $ | 4.0 | 7.3 | % | |||||||||||||||
Military Original Equipment | 57.4 | 62.8 | (5.4) | (8.6) | % | ||||||||||||||||||
Commercial Aftermarket Products | 28.6 | 19.5 | 9.1 | 46.7 | % | ||||||||||||||||||
Military Aftermarket Products | 12.5 | 17.1 | (4.6) | (26.9) | % | ||||||||||||||||||
Total net sales | $ | 157.2 | $ | 154.1 | $ | 3.1 | 2.0 | % | |||||||||||||||
Cost of sales | $ | 97.4 | $ | 99.4 | $ | (2.0) | (2.0) | % | |||||||||||||||
as a percentage of sales | 62.0 | % | 64.5 | % | |||||||||||||||||||
Selling, general and administrative | $ | 31.7 | $ | 28.7 | $ | 3.0 | 10.5 | % | |||||||||||||||
as a percentage of sales | 20.2 | % | 18.6 | % | |||||||||||||||||||
Operating profit | $ | 28.1 | $ | 26.0 | $ | 2.1 | 8.1 | % | |||||||||||||||
Operating margin | 17.9 | % | 16.9 | % | |||||||||||||||||||
Supplemental Data: | |||||||||||||||||||||||
Backlog | $ | 508.4 | $ | 481.6 | $ | 26.8 | 5.6 | % |
First Quarter | Change | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | $ | % | |||||||||||||||||||
Net sales by product line: | |||||||||||||||||||||||
Process Valves and Related Products | $ | 182.9 | $ | 174.5 | $ | 8.4 | 4.8 | % | |||||||||||||||
Commercial Valves | 98.2 | 89.2 | 9.0 | 10.1 | % | ||||||||||||||||||
Pumps and Systems | 30.2 | 24.3 | 5.9 | 24.3 | % | ||||||||||||||||||
Total net sales | $ | 311.3 | $ | 288.0 | $ | 23.3 | 8.1 | % | |||||||||||||||
Cost of sales | $ | 196.8 | $ | 190.7 | $ | 6.1 | 3.2 | % | |||||||||||||||
as a percentage of sales | 63.2 | % | 66.2 | % | |||||||||||||||||||
Selling, general and administrative | $ | 65.5 | $ | 60.0 | $ | 5.5 | 9.2 | % | |||||||||||||||
as a percentage of sales | 21.0 | % | 20.8 | % | |||||||||||||||||||
Restructuring charges (gains) | $ | — | $ | (12.6) | $ | 12.6 | NM | ||||||||||||||||
Operating profit | $ | 49.0 | $ | 49.9 | $ | (0.9) | (1.8) | % | |||||||||||||||
Operating margin | 15.7 | % | 17.4 | % | |||||||||||||||||||
Supplemental Data: | |||||||||||||||||||||||
Backlog | $ | 372.4 | $ | 325.4 | $ | 47.0 | 14.4 | % |
First Quarter | Change | ||||||||||||||||||||||
(dollars in millions) | 2022 | 2021 | $ | % | |||||||||||||||||||
Net sales by product line: | |||||||||||||||||||||||
Payment Acceptance and Dispensing Products | $ | 211.0 | $ | 185.0 | $ | 26.0 | 14.1 | % | |||||||||||||||
Banknotes and Security Products | 121.6 | 152.5 | (30.9) | (20.3) | % | ||||||||||||||||||
Total net sales | $ | 332.6 | $ | 337.5 | $ | (4.9) | (1.5) | % | |||||||||||||||
Cost of sales | $ | 179.1 | $ | 180.4 | $ | (1.3) | (0.7) | % | |||||||||||||||
as a percentage of sales | 53.8 | % | 53.5 | % | |||||||||||||||||||
Selling, general and administrative | $ | 69.3 | $ | 71.7 | $ | (2.4) | (3.3) | % | |||||||||||||||
as a percentage of sales | 20.8 | % | 21.2 | % | |||||||||||||||||||
Restructuring gain, net | $ | — | $ | (0.5) | $ | 0.5 | NM | ||||||||||||||||
Operating profit | $ | 84.2 | $ | 85.9 | $ | (1.7) | (2.0) | % | |||||||||||||||
Operating margin | 25.3 | % | 25.4 | % | |||||||||||||||||||
Supplemental Data: | |||||||||||||||||||||||
Backlog | $ | 429.0 | $ | 337.0 | $ | 92.0 | 27.3 | % | |||||||||||||||
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
(in millions) | 2022 | 2021 | ||||||||||||
Net cash provided by (used for): | ||||||||||||||
Operating activities from continuing operations | $ | (49.3) | $ | 47.6 | ||||||||||
Investing activities from continuing operations | (12.5) | 29.8 | ||||||||||||
Financing activities from continuing operations | (97.8) | (44.8) | ||||||||||||
Discontinued operations | (6.7) | 2.3 | ||||||||||||
Effect of exchange rates on cash and cash equivalents | (5.1) | (7.5) | ||||||||||||
(Decrease) increase in cash and cash equivalents | $ | (171.4) | $ | 27.4 |
Total number of shares purchased (a) | Average price paid per share (b) | Total number of shares purchased as part of publicly announced plans or programs | Maximum dollar value of shares that may yet be purchased under the plans or programs (in millions) | |||||||||||||||||||||||
January 1-31 | 628,179 | $ | 102.91 | 1,587,592 | $ | 137.4 | ||||||||||||||||||||
February 1-28 | 504,792 | $ | 102.51 | 2,092,384 | $ | 85.7 | ||||||||||||||||||||
March 1-31 | 660,246 | $ | 105.78 | 2,752,630 | $ | 15.8 | ||||||||||||||||||||
Total January 1 — March 31, 2022 | 1,793,217 | $ | 103.86 |
Exhibit 10.1 | ||||||||
Exhibit 31.1* | ||||||||
Exhibit 31.2* | ||||||||
Exhibit 32.1** | ||||||||
Exhibit 32.2** | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema (filed herewith) | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase (filed herewith) | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase (filed herewith) | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase (filed herewith) | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase (filed herewith) | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
CRANE CO. | ||||||||
REGISTRANT | ||||||||
Date | ||||||||
May 4, 2022 | By | /s/ Max H. Mitchell | ||||||
Max H. Mitchell | ||||||||
President and Chief Executive Officer | ||||||||
Date | By | /s/ Richard A. Maue | ||||||
May 4, 2022 | Richard A. Maue | |||||||
Senior Vice President and Chief Financial Officer |
By /s/ Max H. Mitchell | ||
President and Chief Executive Officer | ||
May 4, 2022 |
By /s/ Richard A. Maue | ||
Principal Financial Officer | ||
May 4, 2022 |
By /s/ Max H. Mitchell | ||
Max H. Mitchell | ||
President and Chief Executive Officer | ||
May 4, 2022 |
By Richard A. Maue | ||
Richard A. Maue | ||
Principal Financial Officer | ||
May 4, 2022 |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions to Form 10-Q and, therefore, reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These interim condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures. Certain amounts in the prior periods’ condensed consolidated financial statements have been reclassified to conform to the current period presentation. Pending Separation On March 30, 2022, Crane Co. announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies (the “Separation”). The Separation is expected to occur through a tax-free distribution and is expected to be completed within approximately 12 months, subject to the satisfaction of customary conditions and final approval by Crane Co.’s Board of Directors. Discontinued Operations On May 16, 2021, we entered into an agreement to sell the Engineered Materials segment to Grupo Verzatec S.A. de C.V. for $360 million on a cash-free and debt-free basis. The sale is subject to customary closing conditions and regulatory approvals. The historical results of Engineered Materials are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated, amounts and activity are presented on a continuing operations basis. Please see Note 2, “Discontinued Operations” for additional details. Recent Accounting Pronouncements - Adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued amended guidance to simplify the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Certain amendments are to be applied prospectively, while other amendments are to be applied retrospectively to all periods presented. We have adopted this standard effective January 1, 2021. The adoption of this new standard did not impact our consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
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Statement of Comprehensive Income [Abstract] | ||
Net income before allocation to noncontrolling interests | $ 105.0 | $ 108.4 |
Components of other comprehensive income (loss), net of tax | ||
Currency translation adjustment | (21.6) | (34.9) |
Changes in pension and postretirement plan assets and benefit obligation, net of tax | 3.3 | 4.9 |
Other comprehensive loss, net of tax | (18.3) | (30.0) |
Comprehensive income before allocation to noncontrolling interests | 86.7 | 78.4 |
Less: Noncontrolling interests in comprehensive income | 0.1 | 0.8 |
Comprehensive income attributable to common shareholders | $ 86.6 | $ 77.6 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9.3 | $ 10.4 |
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 72,426,139 | 72,426,139 |
Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Acquisitions are accounted for in accordance with ASC Topic 805, “Business Combinations” (“ASC 805”). Accordingly, we make an initial allocation of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed liabilities. We obtain this information during due diligence and through other sources. In the months after closing, as we obtain additional information about these assets and liabilities, including through tangible and intangible asset appraisals, we are able to refine estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment to the purchase price allocation. We will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required. In order to allocate the consideration transferred for our acquisitions, the fair values of all identifiable assets and liabilities must be established. For accounting and financial reporting purposes, fair value is defined under ASC Topic 820, “Fair Value Measurement and Disclosure” as the price that would be received upon sale of an asset or the amount paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are assumed to be buyers and sellers in the principal (most advantageous) market for the asset or liability. Additionally, fair value measurements for an asset assume the highest and best use of that asset by market participants. Use of different estimates and judgments could yield different results. Instrumentation & Sampling Business Acquisition On January 31, 2020, we completed the acquisition of CIRCOR International, Inc.’s Instrumentation & Sampling business (“I&S”) for $172.3 million on a cash-free and debt-free basis, subject to a later adjustment reflecting I&S' net working capital, cash, the assumption of certain debt-like items, and I&S' transaction expenses. We funded the acquisition through short-term borrowings consisting of $100 million of commercial paper and $67 million from our revolving credit facility, and cash on hand. In August 2020, we received $3.1 million related to the final working capital adjustment which resulted in net cash paid of $169.2 million. I&S designs, engineers and manufactures a broad range of critical fluid control instrumentation and sampling solutions used in severe service environments which complements our existing portfolio of chemical, refining, petrochemical and upstream oil and gas applications. I&S has been integrated into the Process Flow Technologies segment. The amount allocated to goodwill reflects the expected synergies, manufacturing efficiencies and procurement savings. Goodwill from this acquisition is not deductible for tax purposes. Allocation of Consideration Transferred to Net Assets Acquired The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S. The fair value of certain assets and liabilities has been completed as required by ASC 805.
The amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:
The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Therefore, a portion of I&S’ earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership. The trade names are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 13 years. The fair values of the customer relationships and backlog intangible assets were determined by using an income approach which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being measured are isolated using the discounted projected net cash flows. These projected cash flows are isolated from the projected cash flows of the combined asset group over the remaining economic life of the intangible asset or liability being measured. Both the amount and the duration of the cash flows are considered from a market participant perspective. Our estimates of market participant net cash flows considered historical and projected pricing, operational performance including market participant synergies, aftermarket retention, product life cycles, material and labor pricing, and other relevant customer, contractual and market factors. Where appropriate, the net cash flows were adjusted to reflect the potential attrition of existing customers in the future, as existing customers are expected to decline over time. The attrition-adjusted future cash flows are then discounted to present value using an appropriate discount rate. The customer relationship asset is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 14 years. Supplemental Pro Forma Data I&S’ results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 31, 2020. Consolidated pro forma revenue and net income attributable to common shareholders has not been presented since the impact was not material to our financial results. Acquisition-Related Costs Acquisition-related costs are expensed as incurred. For the three months ended March 31, 2022, we recorded $2.7 million , of integration and transaction costs in our Condensed Consolidated Statements of Operations.
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate. Executing on our strategy to focus our growth investments on our three remaining segments, on May 16, 2021, we entered into an agreement to sell our Engineered Materials segment to Grupo Verzatec S.A. de C.V. for $360 million on a cash-free and debt-free basis. The sale is subject to customary closing conditions and regulatory approvals. In the second quarter of 2021, the assets and liabilities of the segment were classified as held for sale, and the segment’s results were presented as discontinued operations. This change was applied on a retrospective basis. On March 17, 2022, the Department of Justice (DOJ) filed a complaint to enjoin the sale transaction. The parties are responding to the complaint and engaging with the DOJ in the normal course to address the DOJ’s antitrust concerns regarding a minor overlap in a narrow range of material used in certain commercial building applications. We believe that the sale is probable of closing and, as such, continue to present the segment’s results as discontinued operations as of March 31, 2022. Financial results from discontinued operations:
Major classes of assets and liabilities to be transferred in the transaction:
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Segment Results |
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Segment Results | Segment Results Our segments are reported on the same basis used internally for evaluating performance and for allocating resources. We have four reportable segments: Aerospace & Electronics, Process Flow Technologies, Payment & Merchandising Technologies and Engineered Materials. Assets of the reportable segments exclude general corporate assets, which principally consist of cash, deferred tax assets, insurance receivables, certain property, plant and equipment, and certain other assets. Corporate consists of corporate office expenses including compensation and benefits for corporate employees, occupancy, depreciation, and other administrative costs. A brief description of each of our segments are as follows: Aerospace & Electronics The Aerospace & Electronics segment supplies critical components and systems, including original equipment and aftermarket parts, primarily for the commercial aerospace, and the military aerospace, defense and space markets. Products include a wide range of custom designed, highly engineered products used in landing systems, sensing and utility systems, fluid management, seat actuation, power and microelectronic applications, and microwave systems. Process Flow Technologies The Process Flow Technologies segment is a provider of highly engineered fluid handling equipment for mission critical applications that require high reliability. The segment is comprised of Process Valves and Related Products, Commercial Valves, and Pumps and Systems. Process Valves and Related Products manufactures on/off isolation valves, instrumentation and controls, and related products for critical and demanding applications primarily in the chemical and petrochemical, general industrial, energy- related and pharmaceutical end markets globally. Commercial Valves is engaged primarily in the manufacturing of valves and related products for the non-residential construction, general industrial, and municipal markets, and the distribution of pipe, valves and fittings (PVF) for the non-residential construction market. Pumps and Systems manufactures pumps and related products for water and wastewater applications in the industrial, municipal, commercial and military markets. On April 8, 2022, the Company entered into an agreement to sell Crane Supply for CAD 380 million on a cash-free and debt-free basis. The sale is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2022. Payment & Merchandising Technologies The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (“CPI”) and Crane Currency. CPI provides high technology payment acceptance and dispensing products to original equipment manufacturers, and for certain vertical markets, it also provides currency handling and processing systems, complete cash and cashless payment and merchandising solutions, equipment service solutions, and fully connected managed service solutions. Crane Currency is a supplier of banknotes and highly engineered banknote security features as well as a provider of security features for product authentication. A pioneer in advanced micro-optics technology, Crane Currency provides a wide range of engaging visual effects in features that increase the level of security and public trust in banknotes and for the product brand authentication market. Crane Currency offers uniquely designed banknotes, substrate (paper) and printing capabilities for over 50 central banks around the world. Engineered Materials The Engineered Materials segment manufactures fiberglass-reinforced plastic panels and coils, primarily for use in the manufacturing of recreational vehicles ("RVs"), and in commercial and industrial buildings applications, with some additional applications including trailers and other transportation-related products. Engineered Materials sells the majority of its products directly to RV, trailer, and truck manufacturers, and it uses distributors and retailers to serve the commercial and industrial construction markets. In the second quarter of 2021, the assets and liabilities of the Engineered Materials segment were reclassified as held for sale and results are presented as discontinued operations and, therefore, not included in the tables below. This change was applied on a retrospective basis. Please see Note 2, “Discontinued Operations” for additional details.
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Revenue |
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Revenue | Revenue Disaggregation of Revenues The following table presents net sales disaggregated by product line for each segment:
Remaining Performance Obligations The transaction price allocated to remaining performance obligations represents the transaction price of firm orders which have not yet been fulfilled, which we also refer to as total backlog. As of March 31, 2022, total backlog was $1,309.8 million. We expect to recognize approximately 85% of our remaining performance obligations as revenue in 2022, an additional 13% in 2023 and the balance thereafter. Contract Assets and Contract Liabilities Contract assets represent unbilled amounts that typically arise from contracts for customized products or contracts for products sold directly to the U.S. government or indirectly to the U.S. government through subcontracts, where revenue recognized using the cost-to-cost method exceeds the amount billed to the customer. Contract assets are assessed for impairment and recorded at their net realizable value. Contract liabilities represent advance payments from customers. Revenue related to contract liabilities is recognized when control is transferred to the customer. We report contract assets, which are included within “Other current assets” in our Condensed Consolidated Balance Sheets, and contract liabilities, which are included within “Accrued liabilities” on our Condensed Consolidated Balance Sheets, on a contract-by-contract net basis at the end of each reporting period. Net contract assets and contract liabilities consisted of the following:
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share Our basic earnings per share calculations are based on the weighted average number of common shares outstanding during the period. Potentially dilutive securities include outstanding stock options, restricted share units, deferred stock units and performance-based restricted share units. The effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method. Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the period.
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Changes in Equity and Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Equity and Accumulated Other Comprehensive Loss | Changes in Equity and Accumulated Other Comprehensive Loss A summary of changes in equity for the year-to-date interim periods ended March 31, 2022 and 2021 is provided below:
The table below provides the accumulated balances for each classification of accumulated other comprehensive income (loss), as reflected on our Condensed Consolidated Balance Sheets.
The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three month periods ended March 31, 2022 and 2021. Amortization of pension and postretirement components has been recorded within “Miscellaneous income, net” on our Condensed Consolidated Statements of Operations.
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Defined Benefit and Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit and Postretirement Benefits | Defined Benefit and Postretirement Benefits For all plans, the components of net periodic benefit for the three months ended March 31, 2022 and 2021 are as follows:
The components of net periodic benefit, other than the service cost component, are included in “Miscellaneous income, net” in our Condensed Consolidated Statements of Operations. Service cost is recorded within “Cost of sales” and “Selling, general and administrative” in our Condensed Consolidated Statements of Operations. We expect to contribute the following to our pension and postretirement plans:
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Income Taxes |
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Income Taxes | Income Taxes Effective Tax Rates Our quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. Our effective tax rates are as follows:
Our effective tax rate attributable to continuing operations for the three months ended March 31, 2022 is higher than the prior year’s comparable period primarily due to higher non-U.S. taxes, partially offset by a greater benefit related to share-based compensation. Our effective tax rate attributable to continuing operations for the three months ended March 31, 2022 is higher than the statutory U.S. federal tax rate of 21% primarily due to earnings in jurisdictions with statutory tax rates higher than the U.S., expenses that are statutorily non-deductible for income tax purposes and U.S. state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S. deduction related to our non-U.S. subsidiaries’ income. Unrecognized Tax Benefits During the three months ended March 31, 2022, our gross unrecognized tax benefits, excluding interest and penalties, increased by $0.4 million, primarily due to increases in tax positions taken in the current period, partially offset by reductions from expiration of statutes of limitations. During the three months ended March 31, 2022, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate increased by $0.6 million. The difference between these amounts relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes. During the three months ended March 31, 2022, we recognized $0.3 million of interest expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations. As of March 31, 2022, and December 31, 2021, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $5.2 million and $4.9 million, respectively. During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $6.6 million due to expiration of statutes of limitations and settlements with tax authorities. However, if the ultimate resolution of income tax examinations results in amounts that differ from this estimate, we will record additional income tax expense or benefit in the period in which such matters are effectively settled.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Our business acquisitions have typically resulted in the recognition of goodwill and other intangible assets. We follow the provisions under ASC Topic 350, “Intangibles – Goodwill and Other” as it relates to the accounting for goodwill in our condensed consolidated financial statements. These provisions require that we, on at least an annual basis, evaluate the fair value of the reporting units to which goodwill is assigned and attributed and compare that fair value to the carrying value of the reporting unit to determine if an impairment has occurred. We perform our annual impairment testing during the fourth quarter. Impairment testing takes place more often than annually if events or circumstances indicate a change in status that would indicate a potential impairment. We believe that there have been no events or circumstances which would more likely than not reduce the fair value for our reporting units below its carrying value. A reporting unit is an operating segment unless discrete financial information is prepared and reviewed by segment management for businesses one level below that operating segment (a “component”), in which case the component would be the reporting unit. As of March 31, 2022, we had seven reporting units. In the second quarter of 2021, the assets and liabilities of our Engineered Materials segment (which was a separate reportable segment and reporting unit) were classified as held for sale. Please see Note 2 for additional details. Intangibles with indefinite useful lives, consisting of trade names, are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value. Fair value is calculated using relief from royalty method. We amortize the cost of definite-lived intangibles over their estimated useful lives. We also review all of our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Changes to goodwill are as follows:
As of March 31, 2022, we had $452.1 million of net intangible assets, of which $70.4 million were intangibles with indefinite useful lives. As of December 31, 2021, we had $465.9 million of net intangible assets, of which $70.6 million were intangibles with indefinite useful lives. Changes to intangible assets are as follows:
A summary of intangible assets follows:
Future amortization expense associated with intangible assets is expected to be:
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Accrued Liabilities |
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Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of:
We accrue warranty liabilities when it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Warranty provision is included within “Cost of sales” in our Condensed Consolidated Statements of Operations. The following table summarizes warranty activity recorded during the three months ended March 31, 2022 and 2021.
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Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Asbestos Liability Information Regarding Claims and Costs in the Tort System As of March 31, 2022, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:
Of the 30,312 pending claims as of March 31, 2022, approximately 18,000 claims were pending in New York of which approximately 16,000 are non-malignancy claims that were filed over 15 years ago and have been inactive under New York court orders. We have tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court. We further have pursued appeals of certain adverse jury verdicts that have resulted in reversals in favor of the defense. We have also tried several other cases resulting in plaintiff verdicts which we paid or settled after unsuccessful appeals. The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the three months ended March 31, 2022 and 2021 totaled $13.0 million and $9.1 million, respectively. In contrast to the recognition of settlement and defense costs, which reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more, and may show some fluctuation from period to period. Cash payments of settlement amounts are not made until all releases and other required documentation are received by us, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements. Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the three months ended March 31, 2022 and, 2021 totaled $7.5 million and $10.8 million, respectively. Detailed below are the comparable amounts for the periods indicated.
The amounts shown for settlement and defense costs incurred, and cash payments, are not necessarily indicative of future period amounts, which may be higher or lower than those reported. Cumulatively through March 31, 2022, we have resolved (by settlement or dismissal) approximately 144,000 claims. The related settlement cost incurred by us and our insurance carriers is approximately $730 million, for an average settlement cost per resolved claim of approximately $5,100. The average settlement cost per claim resolved during the years ended December 31, 2021, 2020 and 2019 was $18,800, $13,900, and $15,800, respectively. Because claims are sometimes dismissed in large groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate significantly from period to period. In addition to large group dismissals, the nature of the disease and corresponding settlement amounts for each claim resolved will also drive changes from period to period in the average settlement cost per claim. Accordingly, the average cost per resolved claim is not considered in our periodic review of our estimated asbestos liability. For a discussion regarding the four most significant factors affecting the liability estimate, see “Effects on the Consolidated Financial Statements.” Effects on the Consolidated Financial Statements We have retained an independent actuarial firm to assist management in estimating our asbestos liability in the tort system. The actuarial consultants review information provided by us concerning claims filed, settled and dismissed, amounts paid in settlements and relevant claim information such as the nature of the asbestos-related disease asserted by the claimant, the jurisdiction where filed and the time lag from filing to disposition of the claim. The methodology used by the actuarial consultants to project future asbestos costs is based on our recent historical experience for claims filed, settled and dismissed during a base reference period. Our experience is then compared to estimates of the number of individuals likely to develop asbestos-related diseases determined based on widely used previously conducted epidemiological studies augmented with current data inputs. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, the actuarial consultants estimate the number of future claims that would be filed against us and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for the costs of defending asbestos claims in the tort system using a forecast from us which is based upon discussions with our defense counsel. Based on this information, the actuarial consultants compile an estimate of our asbestos liability for pending and future claims using a range of reference periods based on claim experience and claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against us, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against us and (4) the aggregate defense costs incurred by us. These factors are interdependent, and no one factor predominates in determining the liability estimate. In our view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year; the jurisdictions where such claims are filed, and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits; and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which have been estimated to provide $36 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, management continues to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate. Each quarter, the actuarial consultants compile an update based upon our experience in claims filed, settled and dismissed as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis). In addition to this claims experience, we also consider additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. As part of this process, we also consider trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of the actuarial consultants and determines whether a change in the estimate is warranted. Liability Estimate. In June 2016, the New York State Court of Appeals issued its opinion in Dummitt v. Crane Co., affirming a 2012 verdict for $4.9 million against us. In that opinion, the court ruled that in certain circumstances we are legally responsible for asbestos-containing materials made and sold by third parties that others attached post-sale to our equipment. This decision provided clarity regarding the nature of claims that may proceed to trial in New York and greater predictability regarding future claim activity. We also reflected the impact of the Dummitt decision on our expected settlement values. Accordingly, on December 31, 2016, we updated and extended our asbestos liability estimate through 2059, the generally accepted end point. Following our experience in the tort system post the Dummitt decision, we entered into several, increasingly similar, group settlements with various plaintiff firms and we expect this new trend of these types of group settlements to continue. Accordingly, effective as of December 31, 2019, we updated our estimate of the asbestos liability, including revised costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against us through the same expected end point of 2059. Our estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from our experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, we recorded an additional liability of $255 million as of December 31, 2019. An aggregate liability of $712 million was recorded as of December 31, 2019 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2059, of which approximately 85% is attributable to settlement and defense costs for future claims projected to be filed through 2059. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $600 million and $612 million as of March 31, 2022 and December 31, 2021, respectively. It is not possible to forecast when cash payments related to the asbestos liability will be fully expended; however, it is expected such cash payments will continue for a number of years past 2059, due to the significant proportion of future claims included in the estimated asbestos liability and the lag time between the date a claim is filed and when it is resolved. None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments. The current portion of the total estimated liability at March 31, 2022 and December 31, 2021 is $62.3 million and represents our best estimate of total asbestos costs expected to be paid during the twelve-month period. Such amount is based upon the actuarial model together with our prior year payment experience for both settlement and defense costs. We have made our best estimate of the costs through 2059. Through March 31, 2022, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate. In addition to this claims experience, we considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, we determined that no change in the estimate was warranted for the period ended March 31, 2022. Insurance Coverage and Receivables. Prior to 2005, a significant portion of our settlement and defense costs were paid by our primary insurers. With the exhaustion of that primary coverage, we began negotiations with our excess insurers to reimburse us for a portion of our settlement and/or defense costs as incurred. To date, we have entered into agreements providing for such reimbursements, known as “coverage-in-place,” with eleven of our excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for our present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. Similarly, under a variant of coverage-in-place, we have entered into an agreement with a group of insurers confirming the aggregate amount of available coverage under the subject policies and setting forth a schedule for future reimbursement payments to us based on aggregate indemnity and defense payments made. In addition, with ten of our excess insurer groups, we entered into agreements settling all asbestos and other coverage obligations for an agreed sum and received a total of $82.5 million in aggregate as a result of those settlements. Reimbursements from insurers for past and ongoing settlement and defense costs allocable to their policies have been made in accordance with these coverage-in-place and other agreements. All these agreements include provisions for mutual releases, indemnification of the insurer and, for coverage-in-place, claims handling procedures. With the agreements referenced above, we have concluded settlements with all but two of our solvent excess insurers with policies expected to respond to the aggregate costs included in the liability estimate. The first such insurer, which issued a single applicable policy, has been paying for many years the shares of defense and indemnity costs we have allocated to it, subject to a reservation of rights. The second insurer issued a single applicable policy in a layer of coverage that we do not anticipate reaching until many years from now, and, prior to the policy being reached, we anticipate opening a dialogue with that insurer about the execution of a suitable agreement. There are no pending legal proceedings between us and any insurer contesting our asbestos claims under our insurance policies. In conjunction with developing the aggregate updated liability estimate referenced above, we also developed an updated estimate of probable insurance recoveries for our asbestos liabilities. In developing this estimate, we considered our coverage-in-place and other settlement agreements described above, as well as several additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits. In addition, the timing and amount of reimbursements will vary because our insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage. In addition to consulting with legal counsel on these insurance matters, we retained insurance consultants to assist management in the estimation of probable insurance recoveries based upon the aggregate liability estimate described above and assuming the continued viability of all solvent insurance carriers. Based upon the analysis of policy terms and other factors noted above by our legal counsel, and incorporating risk mitigation judgments by us where policy terms or other factors were not certain, our insurance consultants compiled a model indicating how our historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and us. Using the estimated liability as of December 31, 2019 (for claims filed or expected to be filed through 2059), the insurance consultant’s model forecasted that approximately 14% of the liability would be reimbursed by our insurers. While there are overall limits on the aggregate amount of insurance available to us with respect to asbestos claims, certain limits were not reached by the total estimated liability currently recorded by us, and such overall limits did not influence our determination of the asset amount to record. We allocate to ourselves the amount of the asbestos liability (for claims filed or expected to be filed through 2059) that is in excess of available insurance coverage allocated to such years. An asset of $98 million was recorded as of December 31, 2019 representing the probable insurance reimbursement for claims expected through 2059. The asset is reduced as reimbursements and other payments from insurers are received. The asset was $70 million and $74 million as of March 31, 2022 and December 31, 2021, respectively. We review the estimated reimbursement rate with our insurance consultants on a periodic basis in order to confirm overall consistency with our established reserves. The reviews encompass consideration of the performance of the insurers under coverage-in-place agreements and the effect of any additional lump-sum payments under other insurer agreements. Actual insurance reimbursements vary from period to period, and will decline over time, for the reasons cited above. Uncertainties. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution. We caution that our estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on past experience that may not prove reliable as predictors; the assumptions are interdependent and no single factor predominates in determining the liability estimate. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law could also change the estimated liability. The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance reimbursements, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, due to the uncertainties inherent in litigation matters, no assurances can be given regarding the outcome of any litigation, if necessary, to enforce our rights under our insurance policies or settlement agreements. Many uncertainties exist surrounding asbestos litigation, and we will continue to evaluate our estimated asbestos-related liability and corresponding estimated insurance reimbursement as well as the underlying assumptions and process used to derive these amounts. These uncertainties may result in our incurring future charges or increases to income to adjust the carrying value of recorded liabilities and assets, particularly if the number of claims and settlement and defense costs change significantly, or if there are significant developments in the trend of case law or court procedures, or if legislation or another alternative solution is implemented. Although the resolution of these claims will likely take many years, the effect on the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material. Other Contingencies Environmental Matters For environmental matters, we record a liability for estimated remediation costs when it is probable that we will be responsible for such costs and they can be reasonably estimated. Generally, third party specialists assist in the estimation of remediation costs. The environmental remediation liability as of March 31, 2022 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below. On June 21, 2021, we completed the sale of substantially all of the property associated with what we have historically called the Goodyear Site for $8.7 million, retaining only a small parcel on which our remediation and treatment systems are located. We will continue to be responsible for all remediation costs associated with the Goodyear Site. Goodyear Site The Goodyear Site was operated by Unidynamics/Phoenix, Inc. (“UPI”), which became an indirect subsidiary in 1985 when we acquired UPI’s parent company, UniDynamics Corporation. UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S. government at the Goodyear Site from 1962 to 1993, under contracts with the Department of Defense and other government agencies and certain of their prime contractors. In 1990, the U.S. Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and carry out certain remedial actions, which UPI has done. Groundwater extraction and treatment systems have been in operation at the Goodyear Site since 1994. On July 26, 2006, we entered into a consent decree with the EPA with respect to the Goodyear Site providing for, among other things, a work plan for further investigation and remediation activities (inclusive of a supplemental remediation investigation and feasibility study). During the third quarter of 2014, the EPA issued a Record of Decision (“ROD”) amendment permitting, among other things, additional source area remediation resulting in us recording a charge of $49.0 million, extending the accrued costs through 2022. Following the 2014 ROD amendment, we continued our remediation activities and explored an alternative strategy to accelerate remediation of the site. During the fourth quarter of 2019, we received conceptual agreement from the EPA on our alternative remediation strategy which is expected to further reduce the contaminant plume. Accordingly, in 2019, we recorded a pre-tax charge of $18.9 million, net of reimbursements, to extend our forecast period through 2027 and reflect our revised workplan. The total estimated gross liability was $30.6 million and $32.3 million as of March 31, 2022 and December 31, 2021, respectively and as described below, a portion is reimbursable by the U.S. Government. The current portion of the total estimated liability was $7.8 million and $7.1 million as of March 31, 2022 and December 31, 2021, respectively, and represents our best estimate, in consultation with our technical advisors, of total remediation costs expected to be paid during the twelve-month period. It is not possible at this point to reasonably estimate the amount of any obligation in excess of our current accruals through the 2027 forecast period because of the aforementioned uncertainties, in particular, the continued significant changes in the Goodyear Site conditions and additional expectations of remediation activities experienced in recent years. On July 31, 2006, we entered into a consent decree with the U.S. Department of Justice on behalf of the Department of Defense and the Department of Energy pursuant to which, among other things, the U.S. Government reimburses us for 21% of qualifying costs of investigation and remediation activities at the Goodyear Site. As of March 31, 2022 and December 31, 2021, we recorded a receivable of $6.6 million and $7.3 million, respectively, for the expected reimbursements from the U.S. Government in respect of the aggregate liability as at that date. The receivable is reduced as reimbursements and other payments from the U.S. Government are received. Other Environmental Matters Marion, IL Site We have been identified as a potentially responsible party (“PRP”) with respect to environmental contamination at the Crab Orchard National Wildlife Refuge Superfund Site (the “Crab Orchard Site”). The Crab Orchard Site is located near Marion, Illinois, and consists of approximately 55,000 acres. Beginning in 1941, the United States used the Crab Orchard Site for the production of ordnance and other related products for use in World War II. In 1947, about half of the Crab Orchard Site was leased to a variety of industrial tenants whose activities (which continue to this day) included manufacturing ordnance and explosives. A predecessor of us formerly leased portions of the Crab Orchard Site and conducted manufacturing operations at the Crab Orchard Site from 1952 until 1964. General Dynamics Ordnance and Tactical Systems, Inc. (“GD-OTS”) is in the process of conducting a remedial investigation and feasibility study for a portion of the Crab Orchard Site (the “AUS-OU”), which includes an area where we maintained operations, pursuant to an Administrative Order on Consent. A remedial investigation report was approved in February 2015, and work on the feasibility study is underway. It is unclear when the final feasibility study will be completed, or when a final Record of Decision may be issued. GD-OTS has asked us to participate in a voluntary, multi-party mediation exercise with respect to response costs it has incurred or will incur with respect to the AUS-OU. We and other PRPs executed a non-binding mediation agreement on March 16, 2015, and the U.S. government executed the mediation agreement on August 6, 2015. The first phase of the mediation, involving certain former munitions or ordnance storage areas, began in November 2017, but did not result in a multi-party settlement agreement. Subsequently, we entered into discussions directly with GD-OTS and reached an agreement, as of July 13, 2021, to contribute toward GD-OTS’s past RI-FS costs associated with the first-phase areas for an immaterial amount. We have also agreed to pay a modest percentage of future RI-FS costs and the United States’ claimed past response costs relative to the first-phase areas, a sum that we expect in the aggregate to be immaterial. We understand that GD-OTS has also reached agreements-in-principle with the U.S. Government and the other participating PRPs related to the first-phase areas of concern. Negotiations between GD-OTS and the U.S. Government are underway with respect to resolution of the remaining areas of the site, including those portions of the Crab Orchard Site where our predecessor conducted manufacturing and research activities. We at present cannot predict whether these further negotiations will result in an agreement, or when any determination of the ultimate allocable shares of the various PRPs, including the U.S. Government, is likely to be completed. It is not possible at this time to reasonably estimate the total amount of any obligation for remediation of the Crab Orchard Site as a whole because the allocation among PRPs, selection of remediation alternatives, and concurrence of regulatory authorities have not yet advanced to the stage where a reasonable estimate can be made. We notified our insurers of this potential liability and have obtained defense and indemnity coverage, subject to reservations of rights, under certain of our insurance policies. Roseland, NJ Site The Roseland Site was operated by Resistoflex Corporation (“Resistoflex”), which became an indirect subsidiary of ours in 1985 when we acquired Resistoflex’s parent company, UniDynamics Corporation. Resistoflex manufactured specialty lined pipe and fittings at the site from the 1950s until it was closed in the mid-1980s. We undertook an extensive soil remediation effort at the Roseland Site following our closure and had been monitoring the Site’s condition in the years that followed. In response to changes in remediation standards, in 2014 we began to conduct further site characterization and delineation studies at the Site. We are in the late stages of our remediation activities at the Site, which include a comprehensive delineation of contaminants of concern in soil, groundwater, surface water, sediment, and indoor air testing, all in accordance with the New Jersey Department of Environmental Protection guidelines and directives. Other Proceedings We regularly review the status of lawsuits, claims and proceedings that have been or may be asserted against us relating to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters. We record a provision for a liability for such matters when it is considered probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions, if any, are reviewed quarterly and adjusted as additional information becomes available. If either or both of the criteria are not met, we assess whether there is at least a reasonable possibility that a loss, or additional losses, may have been incurred. If there is a reasonable possibility that a loss or additional loss may have been incurred for such matters, we disclose the estimate of the amount of loss or range of loss, disclose that the amount is immaterial, or disclose that an estimate of loss cannot be made, as applicable. We believe that as of March 31, 2022, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters, and that adequate provision has been made in our financial statements for the potential impact of all such matters.
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Financing |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing | Financing Our debt consisted of the following:
Commercial paper program - On July 28, 2021, we increased the size of the commercial paper program (“CP Program”) to permit the issuance of short-term, unsecured commercial paper notes in an aggregate principal amount not to exceed $650 million at any time outstanding. Prior to this increase, the CP Program permitted us to issue commercial paper notes in an aggregate principal amount not to exceed $550 million at any time outstanding. The other terms and conditions of the CP program remain the same. Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time. The notes will have maturities of up to 397 days from date of issue. The notes rank at least pari passu with all of our other unsecured and unsubordinated indebtedness. As of March 31, 2022 and December 31, 2021, there was $104.0 million and $0.0 million, respectively, of outstanding borrowings under the commercial paper program.
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Fair Value Measurements |
3 Months Ended |
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Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are to be considered from the perspective of a market participant that holds the asset or owes the liability. The standards also establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standards describe three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical or similar assets and liabilities. Level 2: Quoted prices for identical or similar assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. Level 2 assets and liabilities include over-the-counter derivatives, principally forward foreign exchange contracts, whose value is determined using pricing models with inputs that are generally based on published foreign exchange rates and exchange traded prices, adjusted for other specific inputs that are primarily observable in the market or can be derived principally from or corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Valuation Technique The carrying value of our financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable approximate fair value, without being discounted, due to the short periods during which these amounts are outstanding. We are exposed to certain risks related to our ongoing business operations, including market risks related to fluctuation in currency exchange. We use foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on our earnings and cash flows. We do not hold or issue derivative financial instruments for trading or speculative purposes. Foreign exchange contracts not designated as hedging instruments had a notional value of $94.0 million and $3.0 million as of March 31, 2022 and December 31, 2021, respectively. Our derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates. Based on these inputs, the derivatives are classified within Level 2 of the valuation hierarchy. Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and were $1.6 million and $0.0 million as of March 31, 2022 and December 31, 2021, respectively. Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were $0.0 million and less than $0.1 million as of March 31, 2022 and December 31, 2021, respectively. Available-for-sale securities consist of rabbi trust investments that hold marketable securities for the benefit of participants in our Supplemental Executive Retirement Plan. These investments are measured at fair value using quoted market prices in an active market and are therefore classified within Level 1 of the valuation hierarchy. The fair value of available-for-sale securities was $0.6 million and $1.6 million as of March 31, 2022 and December 31, 2021, respectively. These investments are included in “Other assets” on our Condensed Consolidated Balance Sheets. Long-term debt rates currently available to us for debt with similar terms and remaining maturities are used to estimate the fair value for debt issues that are not quoted on an exchange. The estimated fair value of total debt, measured using Level 2 inputs, was $881.2 million and $984.9 million as of March 31, 2022 and December 31, 2021, respectively.
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Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring Overview 2020 Repositioning - In the second quarter of 2020, we initiated actions in response to the adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition. These actions include workforce reductions of approximately 1,200 employees, or about 11% of our global workforce, and the exiting of two leased office facilities and one leased warehouse facility. We have completed this program and do not expect to incur additional restructuring charges. 2019 Repositioning - In the fourth quarter of 2019, we initiated actions to consolidate two manufacturing operations in Europe within our Process Flow Technologies segment. In 2020, we recorded additional severance costs related to the final negotiation with the works council/union at both locations. These actions, taken together, included workforce reductions of approximately 180 employees, or less than 1% of our global workforce. We expect to complete the program in the fourth quarter of 2023. 2017 Repositioning - In the fourth quarter of 2017, we initiated broad-based repositioning actions designed to improve profitability. These actions included headcount reductions of approximately 300 employees, or about 3% of our global workforce, and select facility consolidations in North America and Europe. In 2020, we adjusted the estimate downward to reflect the impact of employees that chose to voluntarily terminate prior to receiving severance at the conclusion of the actions in North America. In 2021, we recorded a gain on sale of real estate related to these actions. We expect to complete the program in the first quarter of 2023. Restructuring (gains) charges, net We recorded restructuring (gains) charges, net which are reflected in the Condensed Consolidated Statements of Operations, as follows:
The following table summarizes our restructuring gains, net by program, cost type and segment for the three months ended March 31, 2022 and 2021:
1 Reflects a pre-tax gain related to the sale of real estate in 2021 The following table summarizes the cumulative restructuring costs, net incurred through March 31, 2022. We do not expect to incur additional facility consolidation costs to complete these actions as of March 31, 2022.
Restructuring Liability The following table summarizes the accrual balances related to each restructuring program:
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Subsequent Event |
3 Months Ended |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On April 8, 2022, the Company entered into an agreement to sell Crane Supply for CAD 380 million on a cash-free and debt-free basis. The sale is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2022. |
Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements - Adopted | Recent Accounting Pronouncements - Adopted Simplifying the Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued amended guidance to simplify the accounting for income taxes. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Certain amendments are to be applied prospectively, while other amendments are to be applied retrospectively to all periods presented. We have adopted this standard effective January 1, 2021. The adoption of this new standard did not impact our consolidated financial statements.
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Acquisitions (Tables) |
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Schedule of Business Acquisitions, by Acquisition | The following amounts represent the determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S. The fair value of certain assets and liabilities has been completed as required by ASC 805.
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The amounts allocated to acquired intangible assets, and their associated weighted-average useful lives which were determined based on the period in which the assets are expected to contribute directly or indirectly to our future cash flows, consist of the following:
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Results and Major Classes of Assets and Liabilities from Discontinued Operations | Financial results from discontinued operations:
Major classes of assets and liabilities to be transferred in the transaction:
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Segment Results (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Information By Reportable Segment |
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Schedule Of Assets By Segment |
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Schedule Of Goodwill By Segment |
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Revenue (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Products and Services | The following table presents net sales disaggregated by product line for each segment:
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Contract with Customer, Asset and Liability | Net contract assets and contract liabilities consisted of the following:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings per Share |
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Changes in Equity and Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Changes In Equity | A summary of changes in equity for the year-to-date interim periods ended March 31, 2022 and 2021 is provided below:
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Classification Of Accumulated Other Comprehensive Income Reflected On Consolidated Balance Sheets | The table below provides the accumulated balances for each classification of accumulated other comprehensive income (loss), as reflected on our Condensed Consolidated Balance Sheets.
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Amounts Reclassified out of each Component of AOCI | The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three month periods ended March 31, 2022 and 2021. Amortization of pension and postretirement components has been recorded within “Miscellaneous income, net” on our Condensed Consolidated Statements of Operations.
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Defined Benefit and Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures | For all plans, the components of net periodic benefit for the three months ended March 31, 2022 and 2021 are as follows:
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Schedule of Contributions By Benefit Plan Type | We expect to contribute the following to our pension and postretirement plans:
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Our effective tax rates are as follows:
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Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes To Goodwill | Changes to goodwill are as follows:
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Changes To Intangible Assets | Changes to intangible assets are as follows:
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Summary Of Intangible Assets | A summary of intangible assets follows:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future amortization expense associated with intangible assets is expected to be:
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Accrued Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule Of Accrued Liabilities | Accrued liabilities consist of:
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Summary Of Warranty Liabilities | The following table summarizes warranty activity recorded during the three months ended March 31, 2022 and 2021.
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Activity Related To Asbestos Claims | Activity related to asbestos claims during the periods indicated was as follows:
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Schedule Of Settlement And Defense Costs | Detailed below are the comparable amounts for the periods indicated.
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Financing (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Debt | Our debt consisted of the following:
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Restructuring Restructuring (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | We recorded restructuring (gains) charges, net which are reflected in the Condensed Consolidated Statements of Operations, as follows:
The following table summarizes our restructuring gains, net by program, cost type and segment for the three months ended March 31, 2022 and 2021:
1 Reflects a pre-tax gain related to the sale of real estate in 2021 The following table summarizes the cumulative restructuring costs, net incurred through March 31, 2022. We do not expect to incur additional facility consolidation costs to complete these actions as of March 31, 2022.
Restructuring Liability The following table summarizes the accrual balances related to each restructuring program:
|
Basis of Presentation Basis of Presentation (Details) $ in Millions |
May 16, 2021
USD ($)
|
---|---|
Discontinued Operations, Held-for-sale | Engineered Materials | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Consideration for discontinued operations | $ 360 |
Acquisitions - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Jan. 31, 2020 |
Aug. 31, 2020 |
Mar. 31, 2021 |
|
Business Acquisition [Line Items] | |||
Acquisition-related and integration charges | $ 2,700,000 | ||
I&S (acquisition) | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 172,300,000 | ||
Debt instrument, face amount | 100,000,000 | ||
Proceeds from Lines of Credit | $ 67,000,000 | ||
Working Capital Adjustment | $ 3,100,000 | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 169,200,000 | ||
Trademarks and Trade Names | I&S (acquisition) | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 13 years | ||
Customer relationships and backlog | I&S (acquisition) | |||
Business Acquisition [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 14 years |
Discontinued Operations - Narrative (Details) $ in Millions |
May 16, 2021
USD ($)
segment
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Number of remaining segments | segment | 3 |
Discontinued Operations, Held-for-sale | Engineered Materials | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Consideration for discontinued operations | $ | $ 360 |
Discontinued Operations - Schedule of Financial Results from Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from discontinued operations, net of tax | $ 10.3 | $ 5.0 |
Engineered Materials | Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net sales | 70.4 | 53.9 |
Cost of sales | 52.4 | 43.1 |
Selling, general and administrative | 4.6 | 4.4 |
Income from discontinued operations | 13.4 | 6.4 |
Income tax provision | 3.1 | 1.4 |
Income from discontinued operations, net of tax | $ 10.3 | $ 5.0 |
Segment Results (Narrative) (Detail) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
segment
|
Apr. 08, 2022
USD ($)
|
|
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 4 | |
Crane Supply | Discontinued Operations, Held-for-sale | Subsequent Event | ||
Segment Reporting Information [Line Items] | ||
Consideration for discontinued operations | $ | $ 380 |
Segment Results (Schedule Of Financial Information By Reportable Segment) (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Operating profit (loss) from continuing operations | ||
Revenues | $ 801.1 | $ 779.6 |
Operating profit (loss) | 133.6 | 140.0 |
Interest income | 0.3 | 0.4 |
Interest expense | (11.1) | (13.6) |
Miscellaneous income, net | 3.5 | 3.9 |
Income from continuing operations before income taxes | 126.3 | 130.7 |
Aerospace & Electronics | ||
Operating profit (loss) from continuing operations | ||
Revenues | 157.2 | 154.1 |
Operating profit (loss) | 28.1 | 26.0 |
Process Flow Technologies | ||
Operating profit (loss) from continuing operations | ||
Revenues | 311.3 | 288.0 |
Operating profit (loss) | 49.0 | 49.9 |
Payment & Merchandising Technologies | ||
Operating profit (loss) from continuing operations | ||
Revenues | 332.6 | 337.5 |
Operating profit (loss) | 84.2 | 85.9 |
Corporate | ||
Operating profit (loss) from continuing operations | ||
Operating profit (loss) | $ (27.7) | $ (21.8) |
Segment Results (Schedule Of Assets By Segment) (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 4,353.2 | $ 4,486.6 |
Engineered Materials | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 234.1 | 220.5 |
Aerospace & Electronics | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 625.6 | 604.7 |
Process Flow Technologies | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 1,282.5 | 1,240.4 |
Payment & Merchandising Technologies | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 2,057.6 | 2,096.5 |
Corporate | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 153.4 | $ 324.5 |
Segment Results (Schedule Of Goodwill By Segment) (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Goodwill | $ 1,402.7 | $ 1,412.5 |
Aerospace & Electronics | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 202.5 | 202.5 |
Process Flow Technologies | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 346.1 | 349.4 |
Payment & Merchandising Technologies | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 854.1 | $ 860.6 |
Revenue - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 78.0 | $ 73.0 |
Contract liabilities | $ 96.5 | $ 101.1 |
Earnings Per Share (Narrative) (Detail) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Average options excluded from computation of diluted earnings per share | 0.3 | 1.8 |
Changes in Equity and Accumulated Other Comprehensive Loss (Details of Accumulated Other Comprehensive Income Components) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Tax impact | $ 31.6 | $ 27.3 |
Total reclassifications for the period | 3.3 | |
Reclassification out of Accumulated Other Comprehensive Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Total before tax | 4.5 | 6.2 |
Tax impact | 1.2 | 1.3 |
Total reclassifications for the period | 3.3 | 4.9 |
Pension | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Net loss | 4.8 | 6.5 |
Prior service costs | 0.0 | 0.0 |
Postretirement | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Net loss | 0.0 | 0.0 |
Prior service costs | $ (0.3) | $ (0.3) |
Defined Benefit and Postretirement Benefits (Components Of Net Periodic Cost) (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1.3 | $ 1.5 |
Interest cost | 5.2 | 5.1 |
Expected return on plan assets | (13.9) | (14.1) |
Recognized curtailment gain | (0.7) | |
Amortization of prior service cost | 0.0 | 0.0 |
Amortization of net loss | 4.8 | 6.5 |
Net periodic cost | (2.6) | (1.7) |
Postretirement | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0.1 | 0.1 |
Interest cost | 0.2 | 0.2 |
Expected return on plan assets | 0.0 | 0.0 |
Amortization of prior service cost | (0.3) | (0.3) |
Amortization of net loss | 0.0 | 0.0 |
Net periodic cost | $ 0.0 | $ 0.0 |
Defined Benefit and Postretirement Benefits Contributions by Plan Type (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Pension | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected contributions in 2022 | $ 18.9 |
Amounts contributed during the three months ended March 31, 2022 | 2.8 |
Postretirement | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected contributions in 2022 | 2.6 |
Amounts contributed during the three months ended March 31, 2022 | $ 0.0 |
Income Taxes (Narrative) (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Company's effective tax rate | 25.00% | 20.90% | |
Increase in unrecognized tax benefits | $ (0.4) | ||
Increase in unrecognized tax benefits that would impact the effective tax rate | (0.6) | ||
Unrecognized tax benefits, interest expense | 0.3 | ||
Unrecognized tax benefits, income tax penalties and interest accrued | 5.2 | $ 4.9 | |
Reasonable possible decrease in unrecognized tax benefits during the next twelve months | $ 6.6 |
Goodwill and Intangible Assets (Narrative) (Detail) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
segment
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Number of reporting units | segment | 7 | ||
Intangible assets, net (excluding goodwill) | $ 452.1 | $ 465.9 | $ 519.1 |
Intangibles with indefinite useful lives | $ 70.4 | $ 70.6 |
Goodwill And Intangible Assets (Changes To Goodwill) (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 1,412.5 |
Currency translation | (9.8) |
Balance at end of period | 1,402.7 |
Aerospace & Electronics | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 202.5 |
Currency translation | 0.0 |
Balance at end of period | 202.5 |
Process Flow Technologies | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 349.4 |
Currency translation | (3.3) |
Balance at end of period | 346.1 |
Payment & Merchandising Technologies | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 860.6 |
Currency translation | (6.5) |
Balance at end of period | $ 854.1 |
Goodwill And Intangible Assets (Changes To Intangible Assets) (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill [Roll Forward] | ||
Balance at beginning of period, net of accumulated amortization | $ 465.9 | $ 519.1 |
Amortization expense | (10.6) | (44.5) |
Currency translation and other | (3.2) | (8.7) |
Balance at end of period, net of accumulated amortization | $ 452.1 | $ 465.9 |
Goodwill And Intangible Assets (Future Amortization Expense) (Detail) $ in Millions |
Mar. 31, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 32.0 |
2023 | 42.0 |
2024 | 41.2 |
2025 | 35.7 |
2026 and after | $ 230.8 |
Accrued Liabilities (Schedule Of Accrued Liabilities) (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Disclosure Accrued Liabilities Summary Of Warranty Liabilities [Abstract] | ||
Employee related expenses | $ 89.0 | $ 175.1 |
Warranty | 7.3 | 7.3 |
Current lease liabilities | 22.0 | 22.5 |
Contract liabilities | 96.5 | 101.1 |
Other | 118.3 | 124.7 |
Total | $ 333.1 | $ 430.7 |
Accrued Liabilities (Summary Of Warranty Liabilities) (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Payables and Accruals [Roll Forward] | ||
Balance at beginning of period | $ 7.3 | $ 8.1 |
Expense | 1.0 | 3.1 |
Payments / deductions | (0.8) | (0.9) |
Currency translation | (0.2) | (0.1) |
Balance at end of period | $ 7.3 | $ 10.2 |
Commitments and Contingencies (Schedule Of Activity Related To Asbestos Claim) (Detail) - Asbestos Commitments and Contingencies - claim |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Loss Contingency Accrual [Roll Forward] | |||
Beginning claims | 29,958 | 29,138 | 29,138 |
New claims | 657 | 733 | 2,975 |
Settlements | (201) | (160) | (980) |
Dismissals | (102) | (304) | (1,175) |
Ending claims | 30,312 | 29,407 | 29,958 |
Commitments and Contingencies (Schedule Of Settlement And Defense Costs) (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Loss Contingencies [Line Items] | |||
Pre-tax cash payments, net | $ 7.5 | $ 10.8 | |
Asbestos Commitments and Contingencies | |||
Loss Contingencies [Line Items] | |||
Settlement / indemnity costs incurred | 10.5 | 5.5 | $ 40.6 |
Defense costs incurred | 2.5 | 3.6 | 14.6 |
Total costs incurred | 13.0 | 9.1 | 55.2 |
Settlement / indemnity payments | 9.6 | 10.1 | 42.6 |
Defense payments | 2.1 | 3.2 | 15.4 |
Insurance receipts | (4.2) | (2.5) | (13.1) |
Pre-tax cash payments, net | $ 7.5 | $ 10.8 | $ 44.9 |
Financing (Components Of Debt) (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Short-term debt | $ 104.0 | $ 0.0 |
Long-term debt | 842.7 | 842.4 |
Debt discounts and debt issuance costs | $ 5.6 | $ 5.7 |
4.45% notes due December 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 4.45% | 4.45% |
Long-term debt | $ 299.5 | $ 299.4 |
6.55% notes due November 2036 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 6.55% | 6.55% |
Long-term debt | $ 198.5 | $ 198.5 |
4.20% notes due March 2048 | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 4.20% | 4.20% |
Long-term debt | $ 346.4 | $ 346.3 |
Other deferred financing costs associated with credit facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1.7 | 1.8 |
Commercial paper | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 104.0 | $ 0.0 |
Financing - Narrative (Details) - USD ($) |
Jul. 28, 2021 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Jul. 27, 2021 |
---|---|---|---|---|
Short-term Debt [Line Items] | ||||
Short-term debt | $ 104,000,000.0 | $ 0 | ||
Commercial paper | ||||
Short-term Debt [Line Items] | ||||
Debt instrument, maximum borrowing capacity | $ 650,000,000 | $ 550,000,000 | ||
Debt instrument, term (in days) | 397 days | |||
Short-term debt | $ 104,000,000 | $ 0 |
Fair Value Measurements (Summary Of Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Derivative, notional amount | $ 94.0 | $ 3.0 |
Derivative asset | 1.6 | 0.0 |
Derivative liability | 0.0 | 0.1 |
Other assets, fair value disclosure | 0.6 | 1.6 |
Long-term debt, fair value | $ 881.2 | $ 984.9 |
Restructuring (Restructuring Charges by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring (gains) charges, net | $ 0.0 | $ (13.1) |
Process Flow Technologies | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring (gains) charges, net | 0.0 | (12.6) |
Payment & Merchandising Technologies | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring (gains) charges, net | $ 0.0 | $ (0.5) |
Restructuring (Restructuring Liability) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Restructuring Reserve [Roll Forward] | ||
Utilization | $ 0.0 | $ 13.1 |
2019 Repositioning Actions | ||
Restructuring Reserve [Roll Forward] | ||
Utilization | 0.0 | (0.1) |
2017 Repositioning Actions | ||
Restructuring Reserve [Roll Forward] | ||
Utilization | 0.0 | $ 12.7 |
Severance | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 12.2 | |
Utilization | (5.0) | |
Ending balance | 7.2 | |
Severance | 2019 Repositioning Actions | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 11.5 | |
Utilization | (4.4) | |
Ending balance | 7.1 | |
Severance | 2017 Repositioning Actions | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0.7 | |
Utilization | (0.6) | |
Ending balance | $ 0.1 |
Subsequent Event (Details) $ in Millions |
Apr. 08, 2022
USD ($)
|
---|---|
Discontinued Operations, Held-for-sale | Crane Supply | Subsequent Event | |
Subsequent Event [Line Items] | |
Consideration for discontinued operations | $ 380 |
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