# Crane NXT, Co.: Form 10-Q for the period ended Mar 31, 2021

- Company: [Crane NXT, Co.](/companies/cxt.md) (CIK 25445)
- Form: 10-Q
- Filed: 2021-05-05
- Accepted by EDGAR: May 5, 2021, 17:04 ET
- Period: 2021-03-31
- Accession: 0001628280-21-009124
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/25445/000162828021009124/cr-20210331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/25445/000162828021009124/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2021-01-01 to 2021-03-31 | $833.5m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2021-01-01 to 2021-03-31 | $513.6m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2021-01-01 to 2021-03-31 | $186.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2021-01-01 to 2021-03-31 | $146.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2021-01-01 to 2021-03-31 | $13.6m | us-gaap:InterestExpense |
| Income tax | 3 months, 2021-01-01 to 2021-03-31 | $28.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2021-01-01 to 2021-03-31 | $108.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2021-01-01 to 2021-03-31 | $1.84 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2021-01-01 to 2021-03-31 | $1.86 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2021-01-01 to 2021-03-31 | 58,900,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2021-01-01 to 2021-03-31 | $50.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2021-01-01 to 2021-03-31 | $25.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2021-01-01 to 2021-03-31 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2021-03-31 | $578.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2021-03-31 | $1.64bn | us-gaap:AssetsCurrent |
| Total assets | at 2021-03-31 | $4.59bn | us-gaap:Assets |
| Current liabilities | at 2021-03-31 | $1.03bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2021-03-31 | $2.99bn | us-gaap:Liabilities |
| Long-term debt | at 2021-03-31 | $843.2m | us-gaap:LongTermDebtNoncurrent |
| Short-term borrowings | at 2021-03-31 | $346.9m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2021-03-31 | $1.59bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,384 characters.

This Quarterly Report on Form 10-Q contains information about Crane Co., some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms.

Reference herein to “Crane,” “the Company,” “we,” “us” and “our” refer to Crane Co. and its subsidiaries unless the context specifically states or implies otherwise. References to “core business” or “core sales” in this report include sales from acquired businesses starting from and after the first anniversary of the acquisition, but exclude currency effects. Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated.

We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. There are a number of other factors, including risks and uncertainties related to the ongoing COVID-19 pandemic, that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements. Such factors also include, among others: uncertainties regarding the extent and duration of the impact of the COVID-19 pandemic on many aspects of our business, operations and financial performance, as detailed in Part II, Item 1A of this Quarterly Report on Form 10-Q; changes in economic, financial and end-market conditions in the markets in which we operate; fluctuations in raw material prices; the financial condition of our customers and suppliers; economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States; competitive pressures, including the need for technology improvement, successful new product development and introduction and any inability to pass increased costs of raw materials to customers; our ability to value and successfully integrate acquisitions and to realize synergies and opportunities for growth and innovation, and to attract and retain highly qualified personnel and key management; a reduction in congressional appropriations that affect defense spending and our ability to predict the timing and award of substantial contracts in our banknote business; adverse effects on our business and results of operations, as a whole, as a result of increases in asbestos claims or the cost of defending and settling such claims; adverse effects as a result of environmental remediation activities, costs, liabilities and related claims; investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions; and other risks noted in reports that we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and subsequent reports filed with the Securities and Exchange Commission. We do not undertake any obligation to update or revise any forward-looking statements.

### OUTLOOK

Our sales depend heavily on industries that are cyclical in nature or are subject to market conditions which may cause customer demand for our products to be volatile and unpredictable. Demand in these industries is affected by fluctuations in domestic and international economic conditions, as well as currency fluctuations, commodity costs, and a variety of other factors.

For 2021, we expect a total year-over-year sales increase of approximately 8%, driven by mid-single digit core growth following the substantial core sales decline in 2020 attributable to the COVID-19 pandemic, an approximate 2.5% benefit from favorable foreign exchange, and a slight acquisition benefit. We expect an improvement in operating profit of more than 70%, driven by a combination of operating leverage on higher volumes, restructuring and acquisition related charges recorded in 2020 that will not repeat in 2021, productivity and carry-over savings associated with COVID-19 related repositioning actions.

### Fluid Handling

In 2021, we expect Fluid Handling sales to increase in the high-single digit range compared to 2020, driven by core sales growth in the mid-single digit range following the substantial core sales decline in 2020 attributable to the COVID-19 pandemic; favorable foreign exchange of approximately 4%; and a small benefit from the I&S acquisition.

We expect Process Valves and Related Products sales to increase in the high-single digit range compared to 2020, driven by mid-single digit core sales growth, an approximate 3% benefit from favorable foreign exchange, and a small benefit from the I&S acquisition. We expect Commercial Valves sales to increase in the low double-digit range compared to 2020 driven by favorable foreign exchange in the mid- to high-single digit range, and low- to mid-single digit core sales growth. We expect Pumps and Systems sales to increase in the mid- to high-single digit range compared to 2020, driven by growth in the U.S. municipal markets and military.

We expect an improvement in the segment’s operating profit and operating margin compared to 2020, driven by the impact of higher sales volume, lower restructuring and acquisition related charges, and carry-over savings primarily associated with COVID-19 related repositioning actions.

### Payment & Merchandising Technologies

In 2021, we expect Payment & Merchandising Technologies sales to increase in the low-double digit range compared to 2020, driven primarily by high-single digit core sales growth, and an approximate 3% benefit from favorable foreign exchange.

At Crane Payment Innovations, we expect core sales growth in the high-single digit range, driven by broad-based strength across vertical markets following the substantial core sales decline in 2020 attributable to the COVID-19 pandemic. At Crane Currency, we expect core sales to increase in the high-single digit range compared to 2020 primarily driven by higher sales to the U.S. Government.

We expect the segment’s operating profit to increase substantially compared to 2020, driven by the impact from the higher sales volume, favorable product mix, productivity, carry-over savings primarily associated with COVID-19 related repositioning actions, and the absence of restructuring and acquisition-related costs.

### Aerospace & Electronics

In 2021, we expect Aerospace & Electronics core sales to decline in the mid-single digit range compared to 2020 as the COVID-19 pandemic continues to depress business and leisure air travel. Accordingly, we expect a decline in our commercial OEM business driven by lower aircraft build rates, and we expect a decline in our commercial aftermarket business given continued lower airline flight hours. We expect a decline in our defense OEM and aftermarket businesses given very challenging comparisons to 2020 where these markets exhibited very strong growth. We expect the segment’s operating profit to decrease compared to 2020 driven primarily by the impact of the lower sales volume, partially offset by carry-over savings associated with COVID-19 related repositioning actions, and the absence of restructuring related costs.

### Engineered Materials

In 2021, we expect Engineered Materials sales to increase approximately 20% compared to 2020 driven primarily by substantially stronger recreational vehicle industry build rates in response to increasing consumer preference for RV lifestyle and RV vacations, higher trailer industry build rates, and a recovery in certain building products end markets. Segment operating profit and operating margin are expected to increase compared to 2020 driven primarily by the impact of the higher sales volume.

### Results from Operations – Three Month Periods Ended March 31

The following information should be read in conjunction with our condensed consolidated financial statements and related notes. All comparisons below refer to the first quarter 2021 versus the first quarter 2020, unless otherwise specified.

*(dollars in millions)*

|  | First Quarter 2021 | 2020 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $833.5 | $797.9 | $35.6 | 4.5% |
| Operating profit | 146.4 | 88.6 | 57.8 | 65.2% |
| Acquisition-related and integration charges \* | — | 5.2 | (5.2) | NM |
| Restructuring and related (gain) charges, net \* | (11.7) | 0.1 | (11.8) | NM |
| Operating margin | 17.6% | 11.1% |  |  |
| Other income (expense): |  |  |  |  |
| Interest income | 0.4 | 0.4 | — | — |
| Interest expense | (13.6) | (12.5) | (1.1) | (8.8)% |
| Miscellaneous income, net | 3.9 | 3.8 | 0.1 | 2.6% |
| Total other expense | (9.3) | (8.3) | (1.0) | (12.0)% |
| Income before income taxes | 137.1 | 80.3 | 56.8 | 70.7% |
| Provision for income taxes | 28.7 | 17.5 | 11.2 | 64.0% |
| Net income attributable to common shareholders | $108.4 | $62.8 | $45.6 | 72.6% |
| \* Acquisition-related and integration charges and restructuring and related (gain) charges, net are included in operating profit and operating margin. |  |  |  |  |

Sales increased by $35.6 million, or 4.5%, to $833.5 million in 2021. Net sales related to operations outside the United States were 37.8% and 35.9% of total net sales for the quarters ended March 31, 2021 and 2020, respectively. The year-over-year change in sales included:

- favorable foreign currency translation of $25.2 million, or 3.2%.
- an increase in core sales of $5.4 million, or 0.7%; and
- an increase in sales related to a benefit from the January 2020 I&S acquisition of $5.0 million, or 0.6%

Operating profit increased by $57.8 million, or 65.2%, to $146.4 million in 2021. The increase in operating profit reflected higher operating profit in our Payment & Merchandising Technologies and Fluid Handling segments, partially offset by lower operating profit in our Aerospace & Electronics and Engineered Materials segments, and higher corporate costs. Operating profit in the first quarter of 2021 included a net restructuring and related gain of $11.7 million primarily related to prior repositioning actions. Operating profit in the first quarter of 2020 included acquisition-related and integration costs of $5.2 million related to the I&S and Cummins-Allison acquisitions.

Other expense increased $1.0 million, or 12.0%, primarily reflecting higher interest expense resulting from the 364-day credit facility entered into in April 2020.

Our effective tax rate is affected by a number of items, both recurring and discrete, including the amount of income we earn in different jurisdictions and their respective statutory tax rates, acquisitions and dispositions, changes in the valuation of our deferred tax assets and liabilities, changes in tax laws, regulations and accounting principles, the continued availability of statutory tax credits and deductions, the continued reinvestment of our overseas earnings, and examinations initiated by tax authorities around the world.

Our tax rate for the three months ended March 31, 2021 is lower than the prior year’s comparable period primarily due to higher tax credit utilization, partially offset by a lower statutory U.S. deduction related to our non-U.S. subsidiaries’ income.

Our tax rate for the three months ended March 31, 2021 is approximately equal to the statutory U.S. federal tax rate of 21%.

### Comprehensive Income

*(in millions)*

|  | Three Months Ended March 31, 2021 | 2020 |
| --- | ---: | ---: |
| Net income before allocation to noncontrolling interests | $108.4 | $62.8 |
| Components of other comprehensive income (loss), net of tax |  |  |
| Currency translation adjustment | (34.9) | (45.2) |
| Changes in pension and postretirement plan assets and benefit obligation, net of tax | 4.9 | 3.6 |
| Other comprehensive income (loss), net of tax | (30.0) | (41.6) |
| Comprehensive income before allocation to noncontrolling interests | 78.4 | 21.2 |
| Less: Noncontrolling interests in comprehensive income | 0.8 | (0.3) |
| Comprehensive income attributable to common shareholders | $77.6 | $21.5 |

For the three months ended March 31, 2021, comprehensive income before allocations to noncontrolling interests was $78.4 million compared to $21.2 million in the same period of 2020. The $57.2 million increase was driven by higher net income before allocation to noncontrolling interests of $45.6 million and a $10.3 million year over year favorable impact of foreign currency translation adjustments, primarily related to the euro and Japanese yen.

### Segment Results of Operations - Three Month Periods Ended March 31

### Fluid Handling

*(dollars in millions)*

| Net sales by product line: | First Quarter 2021 | 2020 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Process Valves and Related Products | $174.5 | $157.2 | $17.3 | 11.0% |
| Commercial Valves | 89.2 | 75.9 | 13.3 | 17.5% |
| Pumps and Systems | 24.3 | 23.6 | 0.7 | 3.0% |
| Total net sales | $288.0 | $256.7 | $31.3 | 12.2% |
| Operating profit | $49.9 | $28.0 | $21.9 | 78.2% |
| Acquisition-related and integration charges \* | $— | $2.0 | $(2.0) | NM |
| Restructuring and related (gain) charges, net \* | $(11.2) | $1.3 | $(12.5) | NM |
| Backlog | $325.4 | $293.4 | $32.0 | 10.9% |
| Operating margin | 17.4% | 10.9% |  |  |
| \* Acquisition-related and integration charges and restructuring and related (gain) charges, net are included in operating profit and operating margin. |  |  |  |  |

Fluid Handling sales increased by $31.3 million, or 12.2%, to $288.0 million in 2021, driven by higher core sales of $14.6 million, or 5.7%, favorable foreign currency translation of $11.7 million, or 4.6%, and a benefit from the January 2020 acquisition of I&S of $5.0 million, or 1.9%.

- Sales of Process Valves and Related Products increased by $17.3 million, or 11.0%, to $174.5 million in 2021. The increase reflected favorable foreign currency translation of $6.3 million, or 4.0%, primarily due to the euro strengthening against the U.S. dollar, higher core sales of $6.0 million, or 3.8%, and a benefit from the acquisition of I&S of $5.0 million, or 3.2%. The higher core sales primarily reflected the timing of services provided to support nuclear outages compared to the prior year.
- Sales of Commercial Valves increased by $13.3 million, or 17.5%, to $89.2 million in 2021, primarily driven by a core sales increase of $8.0 million, or 10.5%, and favorable foreign currency translation of $5.3 million, or 7.0%, as the Canadian dollar and British pound strengthened against the U.S. dollar. The higher core sales primarily reflected higher demand in Canadian non-residential construction markets.
- Sales of Pumps & Systems increased by $0.7 million, or 3.0%, to $24.3 million in 2021.

Fluid Handling operating profit increased by $21.9 million, or 78.2%, to $49.9 million in 2021. The increase primarily reflected a gain on the sale of real estate related to prior repositioning actions, productivity benefits, restructuring savings from 2020 repositioning actions and the impact of higher sales volumes.

### Payment & Merchandising Technologies

*(dollars in millions)*

| Net sales by product line: | First Quarter 2021 | 2020 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Payment Acceptance and Dispensing Products 1 | $185.0 | $203.2 | $(18.2) | (9.0)% |
| Banknotes and Security Products | 152.5 | 94.2 | 58.3 | 61.9% |
| Total net sales | $337.5 | $297.4 | $40.1 | 13.5% |
| Operating profit | $85.9 | $26.4 | $59.5 | 225.4% |
| Acquisition-related and integration charges \* | $— | $3.1 | $(3.1) | NM |
| Restructuring and related gain, net \* | $(0.5) | $(1.2) | $0.7 | NM |
| Backlog | $337.0 | $326.3 | $10.7 | 3.3% |
| Operating margin | 25.4% | 8.9% |  |  |
| 1 As a result of the third quarter 2020 internal merger of the CMS business into the vending vertical of the CPI business, Payment Acceptance and Dispensing Products now includes Merchandising Equipment. The prior period has been reclassified to conform to the current period presentation. |  |  |  |  |
| \* Acquisition-related and integration charges and restructuring and related gain, net are included in operating profit and operating margin. |  |  |  |  |

Payment & Merchandising Technologies sales increased $40.1 million, or 13.5%, to $337.5 million in 2021, driven by higher core sales of $26.8 million, or 9.0%, and favorable foreign currency translation of $13.3 million, or 4.5%.

- Sales of Payment Acceptance and Dispensing Products decreased $18.2 million, or 9.0%, to $185.0 million in 2021. The decrease reflected lower core sales of $22.1 million, or 10.9%, partially offset by favorable foreign currency translation of $3.9 million, or 1.9%, as the British pound strengthened against the U.S. dollar. The core sales decrease primarily reflected lower sales to vending customers driven by COVID-19 related demand impacts.
- Sales of Banknotes and Security Products increased $58.3 million, or 61.9%, to $152.5 million in 2021. The increase reflected higher core sales of $48.9 million, or 51.9%, and favorable foreign currency translation of $9.4 million, or 10.0%, as the euro strengthened against the U.S. dollar. The core sales increase reflected substantially higher sales to both the U.S. Government and international customers.

Payment & Merchandising Technologies operating profit increased by $59.5 million, or 225.4%, to $85.9 million in 2021. The increase primarily reflected favorable mix, productivity benefits, restructuring savings from 2020 repositioning actions and the impact of higher sales volumes.

### Aerospace & Electronics

*(dollars in millions)*

| Net sales by product line: | First Quarter 2021 | 2020 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Commercial Original Equipment | $54.7 | $80.6 | $(25.9) | (32.1)% |
| Military Original Equipment | 62.8 | 60.4 | 2.4 | 4.0% |
| Commercial Aftermarket Products | 19.5 | 33.9 | (14.4) | (42.5)% |
| Military Aftermarket Products | 17.1 | 18.0 | (0.9) | (5.0)% |
| Total net sales | $154.1 | $192.9 | $(38.8) | (20.1)% |
| Operating profit | $26.0 | $43.8 | $(17.8) | (40.6)% |
| Backlog | $481.6 | $547.5 | $(65.9) | (12.0)% |
| Operating margin | 16.9% | 22.7% |  |  |

Aerospace & Electronics sales decreased $38.8 million, or 20.1%, to $154.1 million in 2021.

- Sales of Commercial Original Equipment decreased $25.9 million, or 32.1%, to $54.7 million in 2021, primarily reflecting lower aircraft build rates as a result of COVID-19.
- Sales of Military Original Equipment increased $2.4 million, or 4.0%, to $62.8 million in 2021, reflecting broad-based military demand strength across solutions.
- Sales of Commercial Aftermarket Products decreased $14.4 million, or 42.5%, to $19.5 million in 2021, reflecting lower sales of commercial spares as airlines reduced flight schedules in response to COVID-19.
- Sales of Military Aftermarket Products decreased $0.9 million, or 5.0%, to $17.1 million in 2021.

Aerospace & Electronics operating profit decreased by $17.8 million, or 40.6%, to $26.0 million in 2021, primarily as a result of the impact of lower sales volumes, partially offset by restructuring savings from 2020 repositioning actions.

### Engineered Materials

*(dollars in millions)*

| Net sales by product line: | First Quarter 2021 | 2020 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| FRP- Recreational Vehicles | $24.3 | $18.8 | $5.5 | 29.3% |
| FRP- Building Products | 21.8 | 24.9 | (3.1) | (12.4)% |
| FRP- Transportation | 7.8 | 7.2 | 0.6 | 8.3% |
| Total net sales | $53.9 | $50.9 | $3.0 | 5.9% |
| Operating profit | $6.4 | $6.9 | $(0.5) | (7.2)% |
| Backlog | $17.0 | $10.8 | $6.2 | 57.4% |
| Operating margin | 11.8% | 13.6% |  |  |

Engineered Materials sales increased by $3.0 million, or 5.9%, to $53.9 million in 2021. The increase reflected higher sales to recreational vehicle manufacturers, partially offset by lower sales to building products customers. Engineered Materials operating profit decreased by $0.5 million, or 7.2%, to $6.4 million in 2021, primarily reflecting higher material costs, partially offset by the impact of higher sales volumes.

### Liquidity and Capital Resources

*(in millions)*

| Net cash provided by (used for): | Three Months Ended March 31, 2021 | 2020 |
| --- | ---: | ---: |
| Operating activities | $50.2 | $(35.5) |
| Investing activities | 29.6 | (177.4) |
| Financing activities | (44.9) | 134.3 |
| Effect of foreign currency exchange rate changes on cash and cash equivalents | (7.5) | (12.5) |
| Increase (decrease) in cash and cash equivalents | $27.4 | $(91.1) |

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to shareholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transaction.

Our current cash balance, together with cash we expect to generate from future operations along with our commercial paper program or borrowings available under our revolving credit facility is expected to be sufficient to finance our short- and long-term capital requirements, as well as to fund payments associated with our asbestos and environmental liabilities and expected pension contributions. In addition, we believe our investment grade credit ratings afford us adequate access to public and private debt markets.

In April 2020, to enhance financial flexibility and maintain maximum liquidity in response to the uncertainty in the global markets resulting from the COVID-19 pandemic, we entered into a senior unsecured 364-day credit facility (the “364-Day Credit Agreement”). On April 15, 2021, we repaid the amount outstanding under the 364-Day Credit Agreement with cash on hand and the issuance of commercial paper.

#### Operating Activities

Cash provided by operating activities was $50.2 million in the first three months of 2021, compared to cash used for operating activities of $35.5 million during the same period last year. The increase in cash provided by operating activities was primarily driven by higher net income and lower working capital levels, partially offset by higher pension contributions. Net asbestos-related payments in the first three months of 2021 and 2020 were $10.8 million and $11.7 million, respectively. In 2021, we expect to make payments related to asbestos settlement and defense costs, net of related insurance recoveries, of approximately $45 million.

#### Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions, capital expenditures and cash provided by divestitures of businesses or assets. Cash provided by investing activities was $29.6 million in the first three months of 2021, compared to cash used for investing activities of $177.4 million in the comparable period of 2020. The increase in cash provided by investing activities was driven by the absence of cash paid for the acquisition of I&S of $172.0 million, net cash proceeds from the sale of marketable securities of $20 million and proceeds from the sale of real estate related to prior repositioning actions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information systems. We expect capital expenditures of approximately $75 million in 2021.

#### Financing Activities

Financing cash flows consist primarily of dividend payments to shareholders, share repurchases, repayments of indebtedness, proceeds from the issuance of long-term debt and commercial paper and proceeds from the issuance of common stock. Cash used for financing activities was $44.9 million during the first three months of 2021, compared to cash provided by financing activities of $134.3 million in the comparable period of 2020. The increase in cash used for financing activities was driven by $27.1 million of repayments of commercial paper in the first quarter of 2021 compared to $184.5 million of net proceeds received from the issuance of commercial paper in the first quarter of 2020. This was partially offset by the absence of $70.0 million of cash used for the repurchase of shares in the first quarter of 2020.

#### Recent Accounting Pronouncements

Information regarding new accounting pronouncements is included in Note 1 to our Condensed Consolidated Financial Statements.

## Market risk

As filed, 171 characters.

There have been no material changes in the information called for by this item since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020.

## Controls and procedures

As filed, 1,400 characters.

***Disclosure Controls and Procedures.*** The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the information is accumulated and communicated to the Company’s Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that these controls are effective as of the end of the period covered by this quarterly report.

***Changes in Internal Control over Financial Reporting.*** During the fiscal quarter ended March 31, 2021, there have been no changes in the Company’s internal control over financial reporting, identified in connection with our evaluation thereof, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

## Risk factors

As filed, 140 characters.

Information regarding risk factors appears in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Filed May 5, 2021.
Source: SEC EDGAR, the filing index for accession 0001628280-21-009124. Last ingested by Listed: Nov 4, 2026, 17:36 ET. No prices; not investment advice.