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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, 2019.

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.

Recent Accounting Pronouncements - Not Yet 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. Early adoption is permitted. Certain amendments should be applied prospectively, while other amendments should be applied retrospectively to all periods presented. We are currently evaluating the timing and impact of the amended guidance on our consolidated financial statements.

Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued amended guidance to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. The amended guidance removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the entity; and the effects of a one-percentage point change in assumed health care cost trend rates. The amended guidance requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The amended guidance is required to be applied on a retrospective basis to all periods presented. We are currently evaluating this guidance to determine the impact on our disclosures.

Recent Accounting Pronouncements - Adopted

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued amended guidance that changes the impairment model for most financial assets and certain other instruments. For trade receivables, contract assets and other receivables, held-to-maturity debt securities, loans and other instruments, entities are required to use a current expected credit loss ("CECL") model that will immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of this update, including trade receivables. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. The CECL model is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect collectability.

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.

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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.

Cummins-Allison Acquisition

On December 31, 2019, we completed the acquisition of Cummins-Allison Corp. (“Cummins-Allison”). The base purchase price of the acquisition was $160 million on a cash-free, debt-free basis, subject to a later adjustment reflecting Cummins-Allison’s net working capital, cash, and Cummins-Allison’s transaction expenses. The amount paid, net of cash acquired, was $156.2 million. We funded the acquisition through short-term borrowings consisting of $150 million of commercial paper, and cash on hand.

Cummins-Allison is a leading provider of high speed, cash and coin counting and sorting machines and retail cash office solutions which are primarily used in back-office applications. Cummins-Allison also has a nationwide service network to support these hardware sales. Cummins-Allison was integrated into the Payment & Merchandising Technologies segment. The amount allocated to goodwill reflects the expected synergies related to material costs, supply chain manufacturing productivity and research and development. Goodwill from this acquisition is not deductible for tax purposes.

Allocation of Consideration Transferred to Net Assets Acquired

The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of Cummins-Allison. The final determination of the fair value of certain assets and liabilities will be completed within the one year measurement period as required by ASC 805. The changes to the preliminary purchase price allocation primarily relate to the valuation of inventory. We have not yet completed our evaluation and determination of certain assets acquired and liabilities assumed, primarily related to the final assessment and valuation of certain tax amounts. Therefore, the final fair values of the assets acquired and liabilities assumed may vary from our preliminary estimates presented below:

Net assets acquired (in millions)
Total current assets		$	87.4
Property, plant and equipment		26.4
Other assets		12.0
Intangible assets		66.0
Goodwill		58.7
Total assets acquired		$	250.5
Total current liabilities		$	66.9
Other liabilities		27.4
Total assumed liabilities		$	94.3
Net assets acquired		$	156.2

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

Intangible Assets (dollars in millions)	Intangible Fair Value				Weighted Average Life
Trademarks/trade names	$	3.0			7
Customer relationships	54.5				18
Product technology	8.5				10
Total acquired intangible assets	$	66.0

The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset.

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Therefore, a portion of Cummins-Allison’s earnings, equal to the after-tax royalty that would have been paid for the use of the asset, can be attributed to our ownership. The trade name Cummins Allison is being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of seven years.

The fair values of the customer relationships intangible assets were determined by using an income approach which is a commonly accepted valuation approach. Under this approach, the net earnings attributable to the asset or liability being 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 18 years.

The fair values of the product technology intangible assets were also determined by the relief-from-royalty approach. Similarly, this approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of the technology. Therefore, a portion of Cummins-Allison’s earnings, equal to the after-tax royalty that would have been paid for the use of the technology, can be attributed to the firm’s ownership of the technology. The technology assets are being amortized on a straight-line basis (which approximates the economic pattern of benefits) over the estimated economic life of 10 years.

Supplemental Pro Forma Data

The following unaudited pro forma combined information assumes that the acquisition was completed on January 1, 2019. The unaudited pro forma consolidated net sales for the three and six months ended June 30, 2019 would have been $888.9 million and $1,769.0 million, respectively. The unaudited pro forma consolidated net sales are provided for illustrative purposes only and are not indicative of our actual consolidated results of operations or consolidated financial position. Consolidated pro forma net income attributable to common shareholders has not been presented since the impact is not material to our financial results.

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.

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 was integrated into the Fluid Handling segment. The amount allocated to goodwill reflects the expected sales synergies, manufacturing efficiency and procurement savings. Goodwill from this acquisition is not deductible for tax purposes.

Allocation of Consideration Transferred to Net Assets Acquired

The following amounts represent the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from our acquisition of I&S. The final determination of the fair value of certain assets and liabilities will be completed within the one-year measurement period as required by ASC 805. We have not yet completed our evaluation and determination of certain assets acquired and liabilities assumed, primarily the final assessment and valuation of current assets and other liabilities, and certain tax amounts. Any potential adjustments made could be material in relation to the preliminary values presented below:

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Net assets acquired (in millions)
Total current assets		$	21.0
Property, plant and equipment		11.7
Other assets		6.2
Intangible assets		52.5
Goodwill		108.6
Total assets acquired		$	200.0
Total current liabilities		$	8.1
Other liabilities		19.6
Total assumed liabilities		$	27.7
Net assets acquired		$	172.3

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

Intangible Assets (dollars in millions)	Intangible Fair Value				Weighted Average Life
Trademarks/trade names	$	2.6			13
Customer relationships	49.0				14
Backlog	0.9				1
Total acquired intangible assets	$	52.5

The fair values of the trademark and trade name intangible assets were determined by using an income approach, specifically the relief-from-royalty approach, which is a commonly accepted valuation approach. This approach is based on the assumption that in lieu of ownership, a firm would be willing to pay a royalty in order to exploit the related benefits of this asset. Therefore, a portion of I&S’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’s results of operations have been included in our financial statements for the period subsequent to the completion of the acquisition on January 31, 2020. Consolidated pro forma revenue and net income attributable to common shareholders has not been presented since the impact is not material to our financial results for either period.

Acquisition-Related Costs

Acquisition-related costs are expensed as incurred. For the three months ended June 30, 2020 and 2019, we recorded $2.3 million and $2.4 million, respectively, of integration and transaction costs in our Condensed Consolidated Statements of Operations. For the six months ended June 30, 2020 and 2019, we recorded $7.5 million and $3.5 million, respectively, of integration and transaction costs in our Condensed Consolidated Statements of Operations.

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Our segments are reported on the same basis used internally for evaluating performance and for allocating resources. We have four reportable segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics 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:

Fluid Handling

The Fluid Handling segment is a provider of highly engineered fluid handling equipment for critical performance applications that require high reliability. The segment is comprised of Process Valves and Related Products, Commercial Valves, and Pumps and Systems. Process Valves and Related Products include on/off valves and related products for critical and demanding applications in the chemical, oil & gas, power, and general industrial end markets globally. Commercial Valves includes the manufacturing and distribution of valves and related products for the non-residential construction, general industrial, and to a lesser extent, municipal markets. Pumps and Systems include pumps and related products primarily for water and wastewater applications in the industrial, municipal, commercial and military markets. The recent acquisition of I&S will be integrated into Process Valves and Related Products business. See discussion in Note 2, “Acquisitions” for further details.

Payment & Merchandising Technologies

The Payment & Merchandising Technologies segment consists of Crane Payment Innovations (“CPI”), Crane Merchandising Systems (“CMS”) and Crane Currency. CPI provides high technology payment acceptance and dispensing products to original equipment manufacturers, including coin accepters and dispensers, coin hoppers, coin recyclers, bill validators and bill recyclers. Crane Currency is a supplier of banknotes and highly engineered banknote security features. CMS provides merchandising equipment, including include food, snack and beverage vending machines and vending machine software and online solutions. The recent acquisition of Cummins-Allison will be integrated into our CPI business. See discussion in Note 2, “Acquisitions” for further details.

Aerospace & Electronics

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

Engineered Materials

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

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For the three- and six-months ended June 30, 2020 and 2019, operating profit includes acquisition-related and integration charges and restructuring charges, net. See Note 2, “Acquisitions” for discussion of the acquisition-related costs. See Note 14, “Restructuring” for discussion of the restructuring charges, net.

	Three Months Ended								Six Months Ended
	June 30,								June 30,
(in millions)	2020				2019				2020				2019
Net sales
Fluid Handling	$	239.3			$	290.6			$	495.9			$	564.3
Payment & Merchandising Technologies	247.6				291.0				544.9				594.8
Aerospace & Electronics	157.4				204.5				350.3				399.1
Engineered Materials	33.6				55.5				84.6				115.1
Total	$	677.9			$	841.6			$	1,475.7			$	1,673.3
Operating profit (loss)
Fluid Handling	$	20.2			$	37.3			$	48.2			$	71.4
Payment & Merchandising Technologies	2.0				46.5				28.4				89.7
Aerospace & Electronics	19.5				49.4				63.3				94.2
Engineered Materials	1.8				7.5				8.7				16.9
Corporate	(13.0		)		(17.9		)		(29.5		)		(35.7		)
Total	30.5				122.8				119.1				236.5
Interest income	0.3				0.7				0.7				1.3
Interest expense	(14.4		)		(11.4		)		(26.9		)		(23.3		)
Miscellaneous income, net	2.5				6.4				6.3				8.4
Income before income taxes	$	18.9			$	118.5			$	99.2			$	222.9

(in millions)	June 30, 2020				December 31, 2019
Assets
Fluid Handling	$	1,092.3			$	941.6
Payment & Merchandising Technologies	2,192.3				2,303.4
Aerospace & Electronics	629.0				638.1
Engineered Materials	217.7				219.6
Corporate	499.0				321.0
Total	$	4,630.3			$	4,423.7

 

(in millions)	June 30, 2020				December 31, 2019
Goodwill
Fluid Handling	$	349.0			$	240.9
Payment & Merchandising Technologies	855.2				857.8
Aerospace & Electronics	202.3				202.4
Engineered Materials	171.3				171.3
Total	$	1,577.8			$	1,472.4

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Disaggregation of Revenues

The following table presents net sales disaggregated by product line for each segment:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
(in millions)		2020				2019				2020				2019
Fluid Handling
Process Valves and Related Products		$	160.8			$	182.4			$	317.9			$	350.4
Commercial Valves		58.3				83.6				134.1				164.4
Pumps and Systems		20.2				24.6				43.9				49.5
Total Fluid Handling		$	239.3			$	290.6			$	495.9			$	564.3
Payment & Merchandising Technologies
Payment Acceptance and Dispensing Products		$	113.5			$	154.0			$	280.2			$	312.7
Banknotes and Security Products		106.7				88.5				200.8				187.1
Merchandising Equipment		27.4				48.5				63.9				95.0
Total Payment & Merchandising Technologies		$	247.6			$	291.0			$	544.9			$	594.8
Aerospace & Electronics
Commercial Original Equipment		$	51.9			$	91.3			$	132.5			$	181.7
Military and Other Original Equipment		65.5				55.4				125.9				106.9
Commercial Aftermarket Products		20.3				41.4				54.2				79.6
Military Aftermarket Products		19.7				16.4				37.7				30.9
Total Aerospace & Electronics		$	157.4			$	204.5			$	350.3			$	399.1
Engineered Materials
FRP - Recreational Vehicles		$	9.7			$	22.2			$	28.5			$	48.7
FRP - Building Products		19.4				24.0				44.3				47.7
FRP - Transportation		4.5				9.3				11.8				18.7
Total Engineered Materials		$	33.6			$	55.5			$	84.6			$	115.1
Total net sales		$	677.9			$	841.6			$	1,475.7			$	1,673.3

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 June 30, 2020, backlog was $1,099.9 million. We expect to recognize approximately 68.7% of our remaining performance obligations as revenue in 2020, an additional 25.1% in 2021 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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(in millions)	June 30, 2020				December 31, 2019
Contract assets	$	75.6			$	55.8
Contract liabilities	$	77.9			$	88.4

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.

	Three Months Ended								Six Months Ended
	June 30,								June 30,
(in millions, except per share data)	2020				2019				2020				2019
Net income attributable to common shareholders	$	14.8			$	91.0			$	77.6			$	173.4
Average basic shares outstanding	58.0				59.9				58.5				59.8
Effect of dilutive share-based awards	0.5				0.9				0.6				1.0
Average diluted shares outstanding	58.5				60.8				59.1				60.8
Earnings per basic share	$	0.26			$	1.52			$	1.33			$	2.90
Earnings per diluted share	$	0.25			$	1.50			$	1.31			$	2.85

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A summary of changes in equity for the year-to-date interim periods ended June 30, 2020 and 2019 is provided below:

(in millions, except share data)	Common Shares Issued at Par Value			Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Loss				Treasury Stock				Total Shareholders’ Equity				Noncontrolling Interest				Total Equity
BALANCE DECEMBER 31, 2018	72.4			$	303.5			$	2,072.1			$	(447.6	)		$	(476.2	)		$	1,524.2			$	2.9			$	1,527.1
Net income	—			—				82.4				—				—				82.4				0.1				82.5
Cash dividends ($0.39 per share)	—			—				(23.4		)		—				—				(23.4		)		—				(23.4		)
Impact from settlement of share-based awards, net of shares acquired	—			(9.8		)		—				—				9.6				(0.2		)						(0.2		)
Stock-based compensation expense	—			5.5				—				—				—				5.5				—				5.5
Deconsolidation of a joint venture	—			—				—				—				—				—				(0.5		)		(0.5		)
Changes in pension and postretirement plan assets and benefit obligation, net of tax	—			—				—				2.9				—				2.9				—				2.9
Currency translation adjustment	—			—				—				(0.8		)		—				(0.8		)		(0.1		)		(0.9		)
BALANCE MARCH 31, 2019	72.4			$	299.2			$	2,131.1			$	(445.5	)		$	(466.6	)		$	1,590.6			$	2.4			$	1,593.0
Net income	—			—				91.0				—				—				91.0				—				91.0
Cash dividends ($0.39 per share)	—			—				(23.3		)		—				—				(23.3		)		—				(23.3		)
Impact from settlement of share-based awards, net of shares acquired	—			(0.7		)		—				—				2.2				1.5				—				1.5
Stock-based compensation expense	—			5.6				—				—				—				5.6				—				5.6
Changes in pension and postretirement plan assets and benefit obligation, net of tax	—			—				—				1.9				—				1.9				—				1.9
Currency translation adjustment	—			—				—				4.7				—				4.7				—				4.7
BALANCE JUNE 30, 2019	72.4			$	304.1			$	2,198.8			$	(438.9	)		$	(464.4	)		$	1,672.0			$	2.4			$	1,674.4
BALANCE DECEMBER 31, 2019	72.4			$	315.6			$	2,112.2			$	(483.7	)		$	(542.8	)		$	1,473.7			$	2.6			$	1,476.3
Net income	—			—				62.8				—				—				62.8				—				62.8
Cash dividends ($0.43 per share)	—			—				(25.5		)		—				—				(25.5		)		—				(25.5		)
Reacquisition on open market of 1,221,233 shares	—			—				—				—				(70.0		)		(70.0		)		—				(70.0		)
Impact from settlement of share-based awards, net of shares acquired	—			(6.0		)		—				—				6.0				—								—
Stock-based compensation expense	—			5.8				—				—				—				5.8				—				5.8
Changes in pension and postretirement plan assets and benefit obligation, net of tax	—			—				—				3.6				—				3.6				—				3.6
Currency translation adjustment	—			—				—				(45.2		)		—				(45.2		)		(0.3		)		(45.5		)
BALANCE MARCH 31, 2020	72.4			$	315.4			$	2,149.5			$	(525.3	)		$	(606.8	)		$	1,405.2			$	2.3			$	1,407.5
Net income	—			—				14.8				—				—				14.8				—				$	14.8
Cash dividends ($0.43 per share)	—			—				(24.9		)		—				—				(24.9		)		—				(24.9		)
Impact from settlement of share-based awards, net of shares acquired	—			(1.4		)		—				—				1.9				0.5								0.5
Stock-based compensation expense	—			4.7				—				—				—				4.7				—				4.7
Changes in pension and postretirement plan assets and benefit obligation, net of tax	—			—				—				3.6				—				3.6				—				3.6
Currency translation adjustment	—			—				—				17.2				—				17.2				0.2				17.4
BALANCE JUNE 30, 2020	72.4			$	318.7			$	2,139.4			$	(504.5	)		$	(604.9	)		$	1,421.1			$	2.5			$	1,423.6

The table below provides the accumulated balances for each classification of accumulated other comprehensive loss, as reflected on our Condensed Consolidated Balance Sheets.

(in millions)		Defined Benefit Pension and Postretirement Items*				Currency Translation Adjustment				Total
Balance as of December 31, 2019		$	(366.0	)		$	(117.7	)		$	(483.7	)
	Other comprehensive income (loss) before reclassifications	—				(27.9		)		(27.9		)
	Amounts reclassified from accumulated other comprehensive loss	7.1				—				7.1
Net current-period other comprehensive income (loss)		7.1				(27.9		)		(20.8		)
Balance as of June 30, 2020		$	(358.9	)		$	(145.6	)		$	(504.5	)

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* Net of tax benefit of $137.3 million and $135.4 million as of June 30, 2020 and December 31, 2019, respectively.

The table below illustrates the amounts reclassified out of each component of accumulated other comprehensive loss for the three- and six-month periods ended June 30, 2020 and 2019. Amortization of pension and postretirement components have been recorded within “Miscellaneous income, net” on our Condensed Consolidated Statements of Operations.

		Three Months Ended June 30,								Six Months Ended June 30,
(in millions)		2020				2019				2020				2019
Amortization of pension items:
Prior-service costs		$	(0.1	)		$	(0.2	)		$	(0.1	)		$	(0.3	)
Net loss		4.9				3.3				9.7				6.7
Amortization of postretirement items:
Net gain		(0.3		)		(0.1		)		(0.5		)		(0.2		)
Total before tax		$	4.5			$	3.0			$	9.1			$	6.2
Tax impact		0.9				0.6				2.0				1.4
Total reclassifications for the period		$	3.6			$	2.4			$	7.1			$	4.8

For all plans, the components of net periodic benefit for the three months ended June 30, 2020 and 2019 are as follows:

	Pension								Postretirement
(in millions)	2020				2019				2020				2019
Service cost	$	1.6			$	1.3			$	0.1			$	—
Interest cost	6.6				7.7				0.2				0.1
Expected return on plan assets	(14.0		)		(14.2		)		—				—
Amortization of prior service cost	(0.1		)		(0.2		)		—
Amortization of net loss (gain)	4.9				3.3				(0.3		)		(0.1		)
Net periodic benefit	$	(1.0	)		$	(2.1	)		$	—			$	—

For all plans, the components of net periodic benefit for the six months ended June 30, 2020 and 2019 are as follows:

	Pension								Postretirement
(in millions)	2020				2019				2020				2019
Service cost	$	3.2			$	2.7			$	0.1			$	—
Interest cost	13.2				15.4				0.4				0.2
Expected return on plan assets	(28.7		)		(28.6		)		—				—
Amortization of prior service cost	(0.1		)		(0.3		)		—				—
Amortization of net loss (gain)	9.7				6.7				(0.5		)		(0.2		)
Net periodic benefit	$	(2.7	)		$	(4.1	)		$	—			$	—

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.

Based on current actuarial calculations, we expected to contribute $21.4 million to our pension plans. As permitted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020, we have chosen to defer pension contributions of $18.2 million until January 1, 2021. We now expect to contribute the following to our pension and postretirement plans:

(in millions)	Pension				Postretirement
Expected contributions in 2020	$	3.2			$	2.5
Amounts contributed during the six months ended June 30, 2020	$	1.1			$	1.2

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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:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Effective Tax Rate	21.5%		23.2%		21.7%		22.2%

Our tax rates for the three and six months ended June 30, 2020 are lower than the prior year’s comparable periods primarily due to the settlement of income tax audits, partially offset by a lower foreign tax credit utilization.

Our tax rate for the three months ended June 30, 2020 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. and certain expenses that are statutorily non-deductible for income tax purposes, partially offset by the statutory U.S. deduction related to our non-U.S. subsidiaries’ income.

Our tax rates for the six months ended June 30, 2020 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. and certain expenses that are statutorily non-deductible for income tax purposes, partially offset by excess share-based compensation benefits and the statutory U.S. deduction related to our non-U.S. subsidiaries’ income.

Unrecognized Tax Benefits

During the three and six months ended June 30, 2020, our gross unrecognized tax benefits, excluding interest and penalties, decreased by $1.4 million and $2.7 million respectively, primarily as a result of reductions resulting from the settlements with tax authorities in the current period and expiration of statutes of limitations, partially offset by increases in tax positions taken in the current and prior periods. During the three months and six months ended June 30, 2020, the total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate decreased by $1.5 million and $2.6 million, respectively. 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 and six months ended June 30, 2020, we recognized $(0.1) million and $0.3 million, respectively, of interest and penalty expense related to unrecognized tax benefits in our Condensed Consolidated Statement of Operations. At June 30, 2020 and December 31, 2019, the total amount of accrued interest and penalty expense related to unrecognized tax benefits recorded in our Condensed Consolidated Balance Sheets was $8.3 million and $8.0 million, respectively.

During the next twelve months, it is reasonably possible that our unrecognized tax benefits may decrease by $11.8 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.

Income Tax Examinations

During the second quarter of 2020, we settled the 2013-2015 audits of various German subsidiaries.

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 June 30, 2020, we had eight reporting units.

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Intangibles with indefinite useful lives are tested annually for impairment, or when events or changes in circumstances indicate the potential for impairment. If the carrying amount of an indefinite lived intangible asset exceeds its fair value, the intangible asset is written down to its fair value. Fair value is calculated using relief from royalty method. We amortize the cost of definite-lived intangibles over their estimated useful lives. 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.

During the first half of 2020, we observed a significant decline in the market valuation of our common shares as a result of the COVID-19 pandemic. As such, we performed sensitivity analyses based on more recent assumptions, including entity-specific and macroeconomic factors resulting from the COVID-19 pandemic. We concluded that it was not more likely than not that the fair values of the reporting units and indefinite-lived intangible assets were below their carrying values. While we believe we have made reasonable estimates and assumptions, it is possible a material change could occur. If actual results are not consistent with management’s estimates and assumptions, goodwill or indefinite-lived intangible assets may then be determined to be impaired and a charge would need to be taken against net earnings.

Changes to goodwill are as follows:

(in millions)	Fluid Handling				Payment & Merchandising Technologies				Aerospace & Electronics				Engineered Materials				Total
Balance as of December 31, 2018	$	240.8			$	789.2			$	202.4			$	171.3			$	1,403.7
Additions	—				63.4				—				—				63.4
Currency translation	0.1				5.2				—				—				5.3
Balance as of December 31, 2019	$	240.9			$	857.8			$	202.4			$	171.3			$	1,472.4
Additions	108.6				—				—				—				108.6
Adjustments to purchase price allocations	—				4.0				—				—				4.0
Currency translation	(0.5		)		(6.6		)		(0.1		)		—				(7.2		)
Balance at June 30, 2020	$	349.0			$	855.2			$	202.3			$	171.3			$	1,577.8

For the six months ended June 30, 2020, additions to goodwill represent the preliminary purchase price allocation related to the January 2020 acquisition of I&S and an adjustment to the purchase price allocation for the December 2019 acquisition of Cummins-Allison. For the year ended December 31, 2019, additions to goodwill represent the preliminary purchase price allocation related to the acquisition of Cummins-Allison and the finalization of the purchase price allocation of the January 2018 acquisition of Crane Currency. See discussion in Note 2, “Acquisitions” for further details.

As of June 30, 2020, we had $534.4 million of net intangible assets, of which $69.7 million were intangibles with indefinite useful lives, consisting of trade names. As of December 31, 2019, we had $505.1 million of net intangible assets, of which $69.9 million were intangibles with indefinite useful lives, consisting of trade names.

Changes to intangible assets are as follows:

(in millions)	Six Months Ended June 30, 2020				Year Ended December 31, 2019
Balance at beginning of period, net of accumulated amortization	$	505.1			$	481.8
Additions	52.5				66.0
Amortization expense	(23.7		)		(40.0		)
Currency translation	0.5				(2.7		)
Balance at end of period, net of accumulated amortization	$	534.4			$	505.1

For the six months ended June 30, 2020, additions to intangible assets represent the preliminary purchase price allocation related to the January 2020 acquisition of I&S. For the year ended December 31, 2019, additions to intangible assets represent the preliminary purchase price allocation related to the acquisition of Cummins-Allison. See discussion in Note 2, “Acquisitions” for further details.

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A summary of intangible assets follows:

			June 30, 2020												December 31, 2019
(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	15.6		$	135.7			$	56.6			$	79.1			$	134.2			$	56.8			$	77.4
Customer relationships and backlog	18.5		650.3				255.9				394.4				603.1				241.3				361.8
Drawings	40.0		11.1				10.6				0.5				11.1				10.5				0.6
Other	11.7		141.2				80.8				60.4				141.6				76.3				65.3
Total	18.0		$	938.3			$	403.9			$	534.4			$	890.0			$	384.9			$	505.1

Future amortization expense associated with intangible assets is expected to be:

(in millions)
Remainder of 2020	$	22.5
2021	42.2
2022	41.8
2023	41.6
2024 and after	316.6

Accrued liabilities consist of: 

(in millions)	June 30, 2020				December 31, 2019
Employee related expenses	$	98.5			$	120.6
Warranty	10.0				11.0
Current lease liabilities	22.8				24.0
Contract liabilities	77.9				88.4
Other	130.4				134.2
Total	$	339.6			$	378.2

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.

A summary of warranty liabilities is as follows:

(in millions)	Six Months Ended June 30, 2020				Year Ended December 31, 2019
Balance at beginning of period	$	11.0			$	18.2
Expense	5.2				8.9
Changes due to acquisitions	0.3				—
Payments / deductions	(6.5		)		(16.0		)
Currency translation	—				(0.1		)
Balance at end of period	$	10.0			$	11.0

 

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Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of June 30, 2020, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:

	Three Months Ended						Six Months Ended						Year Ended
	June 30,						June 30,						December 31,
	2020			2019			2020			2019			2019
Beginning claims	29,162			28,498			29,056			29,089			29,089
New claims	577			769			1,258			1,444			2,848
Settlements	(264	)		(178	)		(429	)		(586	)		(983	)
Dismissals	(548	)		(238	)		(958	)		(1,096	)		(1,898	)
Ending claims	28,927			28,851			28,927			28,851			29,056

Of the 28,927 pending claims as of June 30, 2020, approximately 18,000 claims were pending in New York, approximately 100 claims were pending in Texas, approximately 300 claims were pending in Mississippi, and approximately 200 claims were pending in Ohio, all jurisdictions in which legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.

We have tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court. We further have pursued appeals of certain adverse jury verdicts that have resulted in reversals in favor of the defense. We have also tried several other cases resulting in plaintiff verdicts which we paid or settled after unsuccessful appeals, the most recent of which are described below.

On March 23, 2010, a Philadelphia, Pennsylvania, state court jury found us responsible for a 1/11th share of a $14.5 million verdict in the James Nelson claim. On February 23, 2011, the court entered judgment on the verdict in the amount of $4.0 million, jointly, against us and two other defendants, with additional interest in the amount of $0.01 million being assessed against us, only. All defendants, including us, and the plaintiffs took timely appeals of certain aspects of those judgments. On September 5, 2013, a panel of the Pennsylvania Superior Court, in a 2-1 decision, vacated the Nelson verdict against all defendants, reversing and remanding for a new trial. Plaintiffs requested a rehearing in the Superior Court and by order dated November 18, 2013, the Superior Court vacated the panel opinion, and granted en banc reargument. On December 23, 2014, the Superior Court issued a second opinion reversing the jury verdict. Plaintiffs sought leave to appeal to the Pennsylvania Supreme Court, which defendants opposed. By order dated June 21, 2017, the Supreme Court of Pennsylvania denied plaintiffs’ petition for leave to appeal. The case was set for a new trial in April 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

On September 17, 2013, a Fort Lauderdale, Florida state court jury in the Richard DeLisle claim found us responsible for 16% of an $8 million verdict. The trial court denied all parties’ post-trial motions, and entered judgment against us in the amount of $1.3 million. We appealed and oral argument on the appeal took place on February 16, 2016. On September 14, 2016, a panel of the Florida Court of Appeals reversed and entered judgment in favor of us. Plaintiff filed with the Court of Appeals a motion for rehearing and/or certification of an appeal to the Florida Supreme Court, which the Court denied on November 9, 2016. Plaintiffs subsequently requested review by the Supreme Court of Florida. Plaintiffs' motion was granted on July 11, 2017. Oral argument took place on March 6, 2018. On October 15, 2018, the Supreme Court of Florida reversed and remanded with instructions to reinstate the trial court’s judgment. We paid the judgment on December 28, 2018.  That payment is reflected in the fourth quarter 2018 indemnity amount.

On July 2, 2015, a St. Louis, Missouri state court jury in the James Poage claim entered a $1.5 million verdict for compensatory damages against us. The jury also awarded exemplary damages against us in the amount of $10 million. We filed a motion seeking to reduce the verdict to account for the verdict set-offs. That motion was denied, and judgment was entered against us in the amount of $10.8 million. We initiated an appeal. Oral argument was held on December 13, 2016. In an opinion dated May 2, 2017, a Missouri Court of Appeals panel affirmed the judgment in all respects.  The Court of Appeals denied our motion to transfer the case to the Supreme Court of Missouri. We sought leave to appeal before the Supreme Court of Missouri, which denied that request. The Supreme Court of the United States denied further review on March 26, 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

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On April 22, 2016, a Phoenix, Arizona federal court jury found us responsible for a 20% share of a $9 million verdict in the George Coulbourn claim, and further awarded exemplary damages against us in the amount of $5 million.  The jury also awarded compensatory and exemplary damages against the other defendant present at trial.  The court entered judgment against us in the amount of $6.8 million. We filed post-trial motions, which were denied on September 20, 2016. We pursued an appeal to the Ninth Circuit Court of Appeals which affirmed the judgment on March 29, 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

Such judgment amounts were not included in our incurred costs until all available appeals were exhausted and the final payment amount was determined.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the six months ended June 30, 2020 and 2019 totaled $23.9 million and $40.3 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 six months ended June 30, 2020 and 2019 totaled $19.2 million and $17.9 million, respectively. Detailed below are the comparable amounts for the periods indicated.

	Three Months Ended								Six Months Ended								Year Ended
(in millions)	June 30,								June 30,								December 31,
	2020				2019				2020				2019				2019
Settlement / indemnity costs incurred (1)	$	7.6			$	8.6			$	15.8			$	30.0			$	45.5
Defense costs incurred (1)	3.6				5.2				8.1				10.3				20.7
Total costs incurred	$	11.2			$	13.8			$	23.9			$	40.3			$	66.2
Settlement / indemnity payments	$	5.9			$	6.8			$	16.9			$	15.6			$	38.9
Defense payments	4.2				6.2				8.5				10.2				21.4
Insurance receipts	(2.7		)		(4.8		)		(6.2		)		(7.9		)		(18.8		)
Pre-tax cash payments	$	7.4			$	8.2			$	19.2			$	17.9			$	41.5

 

⁽¹⁾ Before insurance recoveries and tax effects.

The amounts shown for settlement and defense costs incurred, and cash payments, are not necessarily indicative of future period amounts, which may be higher or lower than those reported.

Cumulatively through June 30, 2020, we have resolved (by settlement or dismissal) approximately 140,000 claims. The related settlement cost incurred by us and our insurance carriers is approximately $660 million, for an average settlement cost per resolved claim of approximately $4,700. The average settlement cost per claim resolved during the years ended December 31, 2019, 2018 and 2017 was $15,800, $11,300, and $7,800, 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 Condensed Consolidated Financial Statements.”

Effects on the Condensed 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

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would be filed against us and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for the costs of defending asbestos claims in the tort system using a forecast from us which is based upon discussions with our defense counsel. Based on this information, the actuarial consultants compile an estimate of our asbestos liability for pending and future claims using a range of reference periods based on claim experience and covering claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against us, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against us and (4) the aggregate defense costs incurred by us. These factors are interdependent, and no one factor predominates in determining the liability estimate.

In our view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year; the jurisdictions where such claims are filed, and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits; and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which have been estimated to provide $36 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, management continues to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.

Each quarter, the actuarial consultants compile an update based upon our experience in claims filed, settled and dismissed as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis). In addition to this claims experience, we also consider additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. As part of this process, we also consider trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of the actuarial consultants and determines whether a change in the estimate is warranted.

Liability Estimate. In June 2016, the New York State Court of Appeals issued its opinion in Dummitt v. Crane Co., affirming a 2012 verdict for $4.9 million against us. In that opinion, the court ruled that in certain circumstances we are legally responsible for asbestos-containing materials made and sold by third parties that others attached post-sale to our equipment. This decision provided clarity regarding the nature of claims that may proceed to trial in New York and greater predictability regarding future claim activity. We also reflected the impact of the Dummitt decision on our expected settlement values. Accordingly, on December 31, 2016 we updated and extended our asbestos liability estimate through 2059, the generally accepted end point.

Following our experience in the tort system post the Dummitt decision, we entered into several, increasingly similar, group settlements with various plaintiff firms, the most recent of which was in the fourth quarter of 2019. We expect this new trend of these types of group settlements to continue, and accordingly, effective as of December 31, 2019, we updated our estimate of the asbestos liability, including revised costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against us through the same expected end point of 2059. Our estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from our experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, we recorded an additional liability of $255 million as of December 31, 2019.

An aggregate liability of $712 million is recorded as of December 31, 2019 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2059, of which approximately 85% is attributable to settlement and defense costs for future claims projected to be filed through 2059. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $686 million as of June 30, 2020. It is not possible to forecast when cash payments related to the asbestos liability will be fully expended; however, it is expected such cash payments will continue for a number of years past 2059, due to the significant proportion of future claims included in the estimated asbestos liability and the lag time between the date a claim is filed and when it is resolved. None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments. The current portion of the total estimated liability at December 31, 2019 and June 30, 2020 is $65 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.

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We have made our best estimate of the costs through 2059. Through June 30, 2020, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate. In addition to this claims experience, we considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, we determined that no change in the estimate was warranted for the period ended June 30, 2020.

Insurance Coverage and Receivables. Prior to 2005, a significant portion of our settlement and defense costs were paid by our primary insurers. With the exhaustion of that primary coverage, we began negotiations with our excess insurers to reimburse us for a portion of our settlement and/or defense costs as incurred. To date, we have entered into agreements providing for such reimbursements, known as “coverage-in-place,” with eleven of our excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for our present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. Similarly, under a variant of coverage-in-place, we have entered into an agreement with a group of insurers confirming the aggregate amount of available coverage under the subject policies and setting forth a schedule for future reimbursement payments to us based on aggregate indemnity and defense payments made. In addition, with ten of our excess insurer groups, we entered into agreements settling all asbestos and other coverage obligations for an agreed sum, totaling $82.5 million in aggregate. 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 $92 million as of June 30, 2020.

We review the estimated reimbursement rate with our insurance consultants on a periodic basis in order to confirm overall consistency with our established reserves. The reviews encompass consideration of the performance of the insurers under coverage-in-place agreements and the effect of any additional lump-sum payments under other insurer agreements. Actual insurance reimbursements vary from period to period, and will decline over time, for the reasons cited above.

Uncertainties. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution. We caution that our estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on past

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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 June 30, 2020 is substantially related to the former manufacturing site in Goodyear, Arizona (the “Goodyear Site”) discussed below.

Goodyear Site

The Goodyear Site was operated by Unidynamics/Phoenix, Inc. (“UPI”), which became an indirect subsidiary in 1985 when we acquired UPI’s parent company, Unidynamics Corporation. UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S. government at the Goodyear Site from 1962 to 1993, under contracts with the Department of Defense and other government agencies and certain of their prime contractors. In 1990, the U.S. Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and carry out certain remedial actions, which UPI has done. Groundwater extraction and treatment systems have been in operation at the Goodyear Site since 1994. On July 26, 2006, we entered into a consent decree with the EPA with respect to the Goodyear Site 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, 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 $42.1 million as of June 30, 2020, and as described below, a portion is reimbursable by the U.S. Government. The current portion of the total estimated liability was $10.9 million as of June 30, 2020 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 June 30, 2020, we recorded a receivable

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of $8.7 million 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

We have been identified as a potentially responsible party (“PRP”) with respect to environmental contamination at the Crab Orchard National Wildlife Refuge Superfund Site (the “Crab Orchard Site”). The Crab Orchard Site is located near Marion, Illinois, and consists of approximately 55,000 acres. Beginning in 1941, the United States used the Crab Orchard Site for the production of ordnance and other related products for use in World War II. In 1947, about half of the Crab Orchard Site was leased to a variety of industrial tenants whose activities (which continue to this day) included manufacturing ordnance and explosives. A predecessor of us formerly leased portions of the Crab Orchard Site and conducted manufacturing operations at the Crab Orchard Site from 1952 until 1964. General Dynamics Ordnance and Tactical Systems, Inc. (“GD-OTS”) is in the process of conducting a remedial investigation and feasibility study for a portion of the Crab Orchard Site (the “AUS-OU”), which includes an area where we maintained operations, pursuant to an Administrative Order on Consent. A remedial investigation report was approved in February 2015, and work on the feasibility study is underway. It is unclear when the final feasibility study will be completed, or when a final Record of Decision may be issued.

GD-OTS has asked us to participate in a voluntary, multi-party mediation exercise with respect to response costs it has incurred or will incur with respect to the AUS-OU. We and other PRPs executed a non-binding mediation agreement on March 16, 2015, and the U.S. government executed the mediation agreement on August 6, 2015. The first phase of the mediation, involving certain former munitions or ordnance storage areas, began in November 2017, but did not result in a multi-party settlement agreement. Subsequently, we entered into discussions directly with GD-OTS and reached an agreement-in-principle with GD-OTS to contribute toward GD-OTS’s past RI-FS costs associated with the first-phase areas for a non-material amount. We have also agreed to pay a modest percentage of future RI-FS costs and the United States’ claimed past response costs relative to the first-phase areas, a sum that we expect in the aggregate to be immaterial. We understand that GD-OTS has also reached an agreement-in-principle with the U.S. Government and certain other PRPs related to the first-phase areas of concern, and that GD-OTS is negotiating with other PRPs. Negotiations 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.

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 June 30, 2020, there was no reasonable possibility that a material loss, or any additional material losses, may have been incurred for such matters, and that adequate provision has been made in our financial statements for the potential impact of all such matters.

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Our debt consisted of the following:

(in millions)		June 30, 2020				December 31, 2019
Commercial paper		$	241.4			$	149.4
364-Day Credit Agreement		343.9				—
Total short-term borrowings		$	585.3			$	149.4
4.45% notes due December 2023		$	299.0			$	298.9
6.55% notes due November 2036		198.4				198.3
4.20% notes due March 2048		346.1				346.1
Other deferred financing costs associated with credit facilities		(1.0		)		(1.3		)
Total long-term debt		$	842.5			$	842.0
Debt discounts and debt issuance costs totaled $6.5 million and $6.7 million as of each of June 30, 2020 and December 31, 2019, and have been netted against the aggregate principal amounts of the related debt in the components of the debt table above.

As of June 30, 2020 and December 31, 2019, there were $241.4 million and $149.4 million, respectively, of outstanding borrowings under the commercial paper program. We issued $100 million in January 2020 and $150 million in December 2019 of commercial paper to fund the acquisitions of I&S and Cummins-Allison, respectively. See discussion in Note 2, “Acquisitions” for further details. Amounts available under the commercial paper program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of the notes outstanding under the commercial paper program at any time not to exceed $550 million.

We also have a revolving credit agreement permitting borrowings of up to $550 million which expires in December 2022. The undrawn portion of this revolving credit agreement is also available to serve as a backstop facility for the issuance of commercial paper. In the second quarter of 2020, we repaid the outstanding amounts related to borrowings of $67 million used to fund the I&S acquisition in January 2020. See discussion in Note 2, “Acquisitions” for further details. As of June 30, 2020 and December 31, 2019, there were no outstanding borrowings.

On April 16, 2020, we entered into a new senior unsecured 364-day credit facility (the “364-Day Credit Agreement”). We borrowed term loans denominated in dollars (the “Dollar Term Loans”) in an aggregate principal amount equal to $300 million, and term loans denominated in euros (the “Euro Term Loans”) in an aggregate principal amount equal to €40 million under the 364-Day Credit Agreement. Interest on the Dollar Term Loans accrues at a rate per annum equal to (a) a base rate (determined in a customary manner), plus a margin dependent upon ratings of our senior unsecured long-term debt (the “Index Debt Rating”) or (2) an adjusted LIBO rate (determined in a customary manner) for an interest period to be selected by us, plus a margin dependent upon the Index Debt Rating. Interest on the Euro Term Loans accrues at an adjusted LIBO rate (determined in a customary manner) for an interest period to be selected by us, plus a margin. The 364-Day Credit Agreement contains customary affirmative and negative covenants and customary events of default and acceleration for credit facilities of this type. As of June 30, 2020, there was $343.9 million outstanding under the 364-Day Credit Agreement.

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.

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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 $42.5 million and $56.6 million as of June 30, 2020 and December 31, 2019, respectively. Our derivative assets and liabilities include foreign exchange contract derivatives that are measured at fair value using internal models based on observable market inputs such as forward rates and interest rates. Based on these inputs, the derivatives are classified within Level 2 of the valuation hierarchy. Such derivative receivable amounts are recorded within “Other current assets” on our Condensed Consolidated Balance Sheets and were less than $0.1 million and $0.1 million as of June 30, 2020 and December 31, 2019, respectively. Such derivative liability amounts are recorded within “Accrued liabilities” on our Condensed Consolidated Balance Sheets and were $0.1 million and less than $0.1 million as of June 30, 2020 and December 31, 2019, respectively.

The available-for-sale securities, which are included in “Other assets” on our Condensed Consolidated Balance Sheets, consist of two rabbi trusts that hold marketable securities for the benefit of participants in the SERP. Available-for-sale securities are measured at fair value using quoted market prices in an active market, and are therefore classified within Level 1 of the valuation hierarchy. The fair value of available-for-sale securities was $1.3 million and $1.4 million as of June 30, 2020 and December 31, 2019, respectively.

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Overview

2020 Repositioning - In the second quarter of 2020, we initiated actions to reduce our global workforce in response to the adverse economic impact of COVID-19 and integration actions related to the Cummins-Allison acquisition. These actions include workforce reductions of approximately 1,000 employees, or 9% of our global workforce.

2019 Repositioning - In the fourth quarter of 2019, we initiated actions to consolidate two manufacturing operations within our Fluid Handling segment. These actions included workforce reductions of approximately 180 employees, or less than 1% of our global workforce.

2017 Repositioning - In the fourth quarter of 2017, we initiated broad-based repositioning actions designed to improve profitability. These actions included headcount reductions of approximately 300 employees, or about 3% of our global workforce, and select facility consolidations in North America and Europe.

Acquisition-Related Restructuring - In the third quarter of 2018, we initiated actions within our Payment & Merchandising Technologies segment related to the closure of Crane Currency’s printing operations in Sweden, which were transitioned to a new print facility in Malta. These actions included workforce reductions of approximately 170 employees, or less than 2% of our global workforce. There is no remaining liability associated with these actions as of December 31, 2019, and we do not expect to incur additional restructuring charges.

Restructuring Charges, Net

During the three- and six-month periods ended June 30, 2020, we recorded pre-tax charges primarily related to new restructuring actions (“2020 Repositioning”) as described above. These charges are reflected in the Condensed Consolidated Statements of Operations as “Restructuring charges, net.”

Restructuring charges, net by segment are as follows:

	Three Months Ended June 30,								Six Months Ended June 30,
(in millions)	2020				2019				2020				2019
Fluid Handling 1	$	4.7			$	0.2			$	4.7			$	0.8
Payment & Merchandising Technologies 2	13.8				1.4				12.6				3.8
Aerospace & Electronics 3	4.7				—				4.7				(0.1		)
Engineered Materials	0.6				—				0.6				—
Total restructuring charges, net 4	$	23.8			$	1.6			$	22.6			$	4.5

¹ We also recorded related costs of $0.5 million and $2.3 million for the three months ended June 30, 2020 and 2019, respectively, and $1.9 million and $3.9 million for the six months ended June 30, 2020 and 2019, respectively. These costs are recorded within Cost of sales and Selling, general and administrative.

² We also recorded related costs of $0.8 million for the three months ended June 30, 2020 and 2019, and $0.7 million and $1.0 million for the six months ended June 30, 2020 and 2019, respectively. These costs are recorded within Cost of sales and Selling, general and administrative.

³ We also recorded related costs of $1.7 million and $2.1 million for the three and six months ended June 30, 2019, respectively. These costs are recorded within Cost of sales and Selling, general and administrative.

⁴ We also recorded related costs of $1.3 million and $4.8 million for the three months ended June 30, 2020 and 2019, respectively, and $2.6 million and $7.2 million for the six months ended June 30, 2020 and 2019, respectively. These costs are recorded within Cost of sales and Selling, general and administrative.

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The following table summarizes our restructuring charges, net by program, cost type and segment for the three months ended June 30, 2020 and 2019:

	Three months ended June 30, 2020										Three months ended June 30, 2019
(in millions)	Severance			Other			Total				Severance			Other			Total
Fluid Handling	$	4.7		$	—		$	4.7			$	—		$	—		$	—
Payment & Merchandising Technologies	13.8			1.0			14.8				—			—			—
Aerospace & Electronics	4.7			—			4.7				—			—			—
Engineered Materials	0.6			—			0.6				—			—			—
2020 Repositioning	$	23.8		$	1.0		$	24.8			$	—		$	—		$	—
Fluid Handling	$	—		$	—		$	—			$	0.2		$	—		$	0.2
Payment & Merchandising Technologies	(1.0		)	—			(1.0		)		0.2			0.6			0.8
Aerospace & Electronics	—			—			—				—			—			—
2017 Repositioning	$	(1.0	)	$	—		$	(1.0	)		$	0.4		$	0.6		$	1.0
Payment & Merchandising Technologies	$	—		$	—		$	—			$	0.2		$	0.4		$	0.6
Acquisition-Related Restructuring	$	—		$	—		$	—			$	0.2		$	0.4		$	0.6
Total	$	22.8		$	1.0		$	23.8			$	0.6		$	1.0		$	1.6

The following table summarizes our restructuring charges, net by program, cost type and segment for the six months ended June 30, 2020 and 2019:

	Six months ended June 30, 2020										Six months ended June 30, 2019
(in millions)	Severance			Other			Total				Severance			Other			Total
Fluid Handling	$	4.7		$	—		$	4.7			$	—		$	—		$	—
Payment & Merchandising Technologies	13.8			1.0			14.8				—			—			—
Aerospace & Electronics	4.7			—			4.7				—			—			—
Engineered Materials	0.6			—			0.6				—			—			—
2020 Repositioning	$	23.8		$	1.0		$	24.8			$	—		$	—		$	—
Fluid Handling	$	—		$	—		$	—			$	0.8		$	—		$	0.8
Payment & Merchandising Technologies 1	(1.0		)	(1.5		)	(2.5		)		0.2			0.8			1.0
Aerospace & Electronics	—			—			—				—			(0.1		)	(0.1		)
2017 Repositioning	$	(1.0	)	$	(1.5	)	$	(2.5	)		$	1.0		$	0.7		$	1.7
Payment & Merchandising Technologies	$	—		$	—		$	—			$	0.4		$	2.4		$	2.8
Acquisition-Related Restructuring	$	—		$	—		$	—			$	0.4		$	2.4		$	2.8
Payment & Merchandising Technologies	$	0.3		$	—		$	0.3			$	—		$	—		$	—
Other Restructuring	$	0.3		$	—		$	0.3			$	—		$	—		$	—
Total	$	23.1		$	(0.5	)	$	22.6			$	1.4		$	3.1		$	4.5

¹ We recorded a pre-tax gain of $1.5 million related to the sale of a facility in the first six months of 2020.

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The following table summarizes the cumulative restructuring costs incurred through June 30, 2020 and the remaining facility consolidation costs expected to complete these actions as of June 30, 2020:

	Cumulative Restructuring Costs										Remaining Costs
(in millions)	Severance			Other			Total				2020			2021			Total
Fluid Handling	$	4.7		$	—		$	4.7			$	—		$	—		$	—
Payment & Merchandising Technologies	13.8			1.0			14.8				—			—			—
Aerospace & Electronics	4.7			—			4.7				—			—			—
Engineered Materials	0.6			—			0.6				—			—			—
2020 Repositioning	$	23.8		$	1.0		$	24.8			$	—		$	—		$	—
Fluid Handling	$	9.9		$	—		$	9.9			$	4.5		$	4.2		$	8.7
2019 Repositioning	$	9.9		$	—		$	9.9			$	4.5		$	4.2		$	8.7
Fluid Handling	$	17.3		$	—		$	17.3			$	0.8		$	—		$	0.8
Payment & Merchandising Technologies	11.6			0.7			12.3				—			—			—
Aerospace & Electronics	1.3			(1.4		)	(0.1		)		—			—			—
2017 Repositioning	$	30.2		$	(0.7	)	$	29.5			$	0.8		$	—		$	0.8

Restructuring Liability

The following table summarizes the accrual balances related to these restructuring charges by program:

(in millions)		2020 Repositioning			2019 Repositioning			2017 Repositioning			Other Restructuring			Total
Severance:
Balance at December 31, 2019		$	—		$	9.9		$	12.5		$	—		$	22.4
Expense (Gain)1		23.8			—			(1.0		)	0.3			23.1
Utilization		(13.1		)	(0.1		)	(1.6		)	(0.3		)	(15.1		)
Balance at June 30, 20202		$	10.7		$	9.8		$	9.9		$	—		$	30.4
Other Restructuring Costs:
Balance at December 31, 2019		$	—		$	—		$	0.2		$	—		$	0.2
Expense (Gain)1		1.0			—			(1.5		)	—			(0.5		)
Utilization		(1.0		)	—			1.3			—			0.3
Balance at June 30, 20202		$	—		$	—		$	—		$	—		$	—

¹ Reflected in the Condensed Consolidated Statements of Operations as “Restructuring charges, net”

² Included within Accrued Liabilities in the Condensed Consolidated Balance Sheets

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•	a decrease in core sales of $203.2 million, or 24.1%, driven by lower demand related to COVID-19;

•	unfavorable foreign currency translation of $7.5 million, or 1.0%; and

•	an increase in sales related to a benefit from acquisitions of $47.0 million, or 5.6%.

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•

Sales of Process Valves and Related Products decreased by $21.6 million, or 11.8%, to $160.8 million in 2020. The decrease reflected lower core sales of $34.4 million, or 18.8%, and unfavorable foreign currency translation of $2.3 million, or 1.3%, primarily due to the euro weakening against the U.S. dollar, partially offset by a benefit from the acquisition of I&S of $15.1 million, or 8.3%. The core sales decline primarily reflected a broad-based decline in demand related to impacts from COVID-19, including sharply lower oil and gas prices.

•

Sales of Commercial Valves decreased by $25.3 million, or 30.3%, to $58.3 million in 2020, primarily driven by a core sales decrease of $23.1 million, or 27.7%, and unfavorable foreign currency translation of $2.2 million, or 2.6%, as the Canadian dollar and British pound weakened against the U.S. dollar. The core sales decline reflected a broad-based decline in demand related to COVID-19 across all geographies.

•	Sales of Pumps & Systems decreased by $4.4 million, or 17.9%, to $20.2 million in 2020. The decrease primarily reflected a broad-based decline across end markets related to COVID-19.

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Sales of Payment Acceptance and Dispensing Products decreased $40.5 million, or 26.3%, to $113.5 million in 2020. The decrease reflected lower core sales of $71.6 million, or 46.4%, and unfavorable foreign currency translation of $0.7 million, or 0.5%. The core sales decrease reflected lower sales to all vertical markets driven largely by COVID-19 related demand impacts. The decreases were partially offset by the benefit of the December 2019 acquisition of Cummins-Allison of $31.8 million, or 20.6%.

•	Sales of Banknotes and Security Products increased $18.2 million, or 20.6%, to $106.7 million. The increase reflected higher core sales of $20.2 million, or 22.9%, partially offset by unfavorable foreign currency translation of $2.0 million, or 2.3%, as the euro weakened against the U.S. dollar. The core sales increase primarily reflected higher sales to international customers.

•	Sales of Merchandising Equipment decreased $21.1 million, or 43.5%, to $27.4 million in 2020, reflecting lower sales related to demand impacts from COVID-19.

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•	Sales of Commercial Original Equipment decreased by $39.4 million, or 43.2%, to $51.9 million in 2020, primarily reflecting lower aircraft build rates as a result of COVID-19.

•	Sales of Military Original Equipment increased by $10.1 million, or 18.2%, to $65.5 million in 2020, reflecting broad-based military demand strength across solutions.

•	Sales of Commercial Aftermarket Products decreased by $21.1 million, or 51.0%, to $20.3 million in 2020, reflecting lower sales of commercial spares as airlines reduced flight schedules in response to COVID-19.

•	Sales of Military Aftermarket Products increased by $3.3 million, or 20.1%, to $19.7 million in 2020, primarily reflecting higher demand for military spares.

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•	a decrease in core sales of $283.5 million, or 16.9%, primarily due to lower demand related to COVID-19;

•	unfavorable foreign currency translation of $14.6 million, or 0.9%; and

•	an increase in sales related to a benefit from acquisitions of $100.5 million, or 6.0%.

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Sales of Process Valves and Related Products decreased by $32.5 million, or 9.3%, to $317.9 million in 2020. The decrease reflected lower core sales of $52.7 million, or 15.0%, and unfavorable foreign currency translation of $4.4 million, or 1.3%, primarily due to the euro weakening against the U.S. dollar, partially offset by a benefit from the acquisition of I&S of $24.6 million, or 7.0%. The core sales decline reflected a broad-based decline in demand related largely to impacts from COVID-19, including sharply lower oil and gas prices, and to a lesser extent, the impact of supply chain disruptions related to COVID-19.

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Sales of Commercial Valves decreased by $30.3 million, or 18.4%, to $134.1 million in 2020, primarily driven by a core sales decrease of $27.1 million, or 16.6%, and unfavorable foreign currency translation of $3.1 million, or 1.9%, as the Canadian dollar and British pound weakened against the U.S. dollar. The core sales decline reflected a broad-based decline in demand related to COVID-19 across all geographies.

•	Sales of Pumps and Systems decreased by $5.6 million, or 11.3%, to $43.9 million in 2020. The decrease primarily reflected lower sales to military customers.

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Sales of Payment Acceptance and Dispensing Products decreased $32.5 million, or 10.4%, to $280.2 million in 2020. The decrease reflected lower core sales of $107.0 million, or 34.2%, and unfavorable foreign currency translation of $1.5 million, or 0.5%, as the British pound weakened against the U.S. dollar, partially offset by a benefit from the December 2019 acquisition of Cummins-Allison of $76.0 million, or 24.3%. The core sales decrease reflected lower sales to all vertical markets driven largely by COVID-19 related demand impacts.

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Sales of Banknotes and Security Products increased $13.7 million, or 7.3%, to $200.8 million. The increase reflected higher core sales of $18.8 million, or 10.0%, and unfavorable foreign currency translation of $5.1 million, or 7.3%, as the euro weakened against the U.S. dollar. The core sales increase primarily reflected higher sales to international customers, partially offset by lower sales to the U.S. Government.

•	Sales of Merchandising Equipment decreased $31.1 million, or 32.7%, to $63.9 million in 2020, reflecting lower sales largely related to demand impacts of COVID-19.

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•	Sales of Commercial Original Equipment decreased by $49.2 million, or 27.1%, to $132.5 million in 2020, primarily reflecting lower aircraft build rates as a result of COVID-19, and to a lesser extent, the impact of Boeing’s 737 MAX production pause.

•	Sales of Military Original Equipment increased by $19.0 million, or 17.8%, to $125.9 million in 2020, primarily reflecting higher sales of power products.

•	Sales of Commercial Aftermarket products decreased by $25.4 million, or 31.9%, to $54.2 million in 2020, reflecting lower sales of commercial spares as airlines reduced flight schedules in response to COVID-19.

•	Sales of Military Aftermarket increased by $6.8 million, or 22.0%, to $37.7 million in 2020, primarily reflecting higher sales of military spares.

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