Crane CoCR
Crane Co Income Taxes Disclosure
Income Taxes
Currently, we and our subsidiaries are under examination in Canada (2013 through 2018)
Provision for Income Taxes
Our income before taxes is as follows:
| (in millions) For year ended December 31, | 2025 | 2024 | 2023 | |||||||||||||||||
| U.S. operations | $ | 312.8 | $ | 207.0 | $ | 127.1 | ||||||||||||||
| Non-U.S. operations | 120.0 | 131.5 | 106.0 | |||||||||||||||||
| Total | $ | 432.8 | $ | 338.5 | $ | 233.1 | ||||||||||||||
Our provision (benefit) for income taxes consists of:
| (in millions) For the year ended December 31, | 2025 | 2024 | 2023 | |||||||||||||||||
| Current: | ||||||||||||||||||||
| U.S. federal tax | $ | 58.7 | $ | 39.7 | $ | 36.0 | ||||||||||||||
| U.S. state and local tax | 6.7 | 4.0 | 3.8 | |||||||||||||||||
| Non-U.S. tax | 37.8 | 38.2 | 36.1 | |||||||||||||||||
| Total current | 103.2 | 81.9 | 75.9 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| U.S. federal tax | 1.2 | (7.4) | (13.0) | |||||||||||||||||
| U.S. state and local tax | 0.1 | (1.7) | (1.5) | |||||||||||||||||
| Non-U.S. tax | (3.4) | (2.5) | (4.2) | |||||||||||||||||
| Total deferred | (2.1) | (11.6) | (18.7) | |||||||||||||||||
| Total provision for income taxes | $ | 101.1 | $ | 70.3 | $ | 57.2 | ||||||||||||||
We adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with the year ended December 31, 2025.
A reconciliation of the statutory U.S. federal tax rate to our effective tax rate is as follows:
| (in millions, except %) For the year ended December 31, 2025 | Amount | Percent | ||||||||||||
| US Federal Statutory Tax Rate | $ | 90.9 | 21.0 | % | ||||||||||
| State and Local Income Taxes, Net of Federal Income Tax Effect* | 5.1 | 1.2 | % | |||||||||||
| Foreign Tax Effects | ||||||||||||||
| Other Foreign jurisdictions | 9.3 | 2.1 | % | |||||||||||
| Effect of Cross-Boarder Tax Laws | ||||||||||||||
| Global intangible low-taxed income | 11.0 | 2.5 | % | |||||||||||
| Foreign-derived intangible income | (7.2) | (1.7) | % | |||||||||||
| Other | 2.2 | 0.5 | % | |||||||||||
| Tax Credits | ||||||||||||||
| Research and development tax credits | (3.0) | (0.7) | % | |||||||||||
| Foreign tax credits | (11.9) | (2.7) | % | |||||||||||
| Changes in valuation allowances | (0.1) | — | % | |||||||||||
| Nontaxable or Nondeductible Items | ||||||||||||||
| Equity Compensation | (9.8) | (2.3) | % | |||||||||||
| Non-Deductible Officers Compensation | 9.4 | 2.2 | % | |||||||||||
| Other | 3.4 | 0.8 | % | |||||||||||
| Changes in unrecognized tax benefits | 2.1 | 0.5 | % | |||||||||||
| Other Adjustments | (0.3) | — | % | |||||||||||
| Effective Tax Rate | $ | 101.1 | 23.4 | % | ||||||||||
* State taxes in New York, Illinois, Texas, Ohio, and Massachusetts made up the majority (greater than 50 percent) of the tax effect in this category.
| For the year ended December 31, | 2024 | 2023 | |||||||||||||||
| Statutory U.S. federal tax rate | 21.0 | % | 21.0 | % | |||||||||||||
| Increase (reduction) from: | |||||||||||||||||
| Income taxed at non-U.S. rates | 2.4 | % | 4.1 | % | |||||||||||||
| Non-U.S. income inclusion, net of tax credits | 0.4 | % | (1.7) | % | |||||||||||||
| State and local taxes, net of federal benefit | 0.5 | % | 0.7 | % | |||||||||||||
| U.S. research and development tax credit | (1.3) | % | (0.8) | % | |||||||||||||
| U.S. deduction for foreign - derived intangible income | (1.5) | % | (1.9) | % | |||||||||||||
| Non-deductible expenses | 2.5 | % | 4.4 | % | |||||||||||||
| Equity Compensation | (2.6) | % | (2.1) | % | |||||||||||||
| Other | (0.7) | % | 0.8 | % | |||||||||||||
| Effective tax rate | 20.8 | % | 24.5 | % | |||||||||||||
The following table presents the components of income taxes paid, net of refunds:
| (in millions) For year ended December 31, | 2025 | |||||||
| Federal | $ | 53.8 | ||||||
| State | 5.3 | |||||||
| Foreign: | ||||||||
| France | 5.8 | |||||||
| United Kingdom | 7.6 | |||||||
| Other foreign jurisdictions | 24.0 | |||||||
| Total | $ | 96.5 | ||||||
Income taxes paid, net of refunds, for the periods ended December 31, 2024 and 2023 were $88.9 million and $110.5 million.
As of December 31, 2025, we have made the following determinations with regard to our non-U.S. earnings:
| (in millions) | Permanently reinvested | Not permanently reinvested | ||||||||||||
| Amount of earnings | $ | 232.9 | $ | 803.7 | ||||||||||
| Associated tax | NA * | $ | 10.3 | |||||||||||
* Determination of U.S. income taxes and non-U.S. withholding taxes due upon repatriation of this $232.9 million of earnings is not practicable because the amount of such taxes depends upon circumstances existing in numerous taxing jurisdictions at the time the remittance occurs. | ||
Tax Related to Comprehensive Income
During 2025, 2024 and 2023, tax provision (benefit) of $10.5 million, $9.2 million and $3.2 million, respectively, related to changes in pension and post-retirement plan assets and benefit obligations, were recorded to accumulated other comprehensive loss.
Deferred Taxes and Valuation Allowances
The components of deferred tax assets and liabilities included in our Consolidated Balance Sheets are as follows:
| (in millions) December 31, | 2025 | 2024 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Tax loss and credit carryforwards | $ | 40.5 | $ | 45.5 | ||||||||||
| Inventories | 33.1 | 30.0 | ||||||||||||
| Deferred tax asset related to the sale of a subsidiary | — | 7.2 | ||||||||||||
| Capitalized research and development | 20.6 | 28.1 | ||||||||||||
| Stock Based Compensation | 6.0 | 5.8 | ||||||||||||
| Other | 13.9 | 13.8 | ||||||||||||
| Total | $ | 114.1 | $ | 130.4 | ||||||||||
| Less: valuation allowance | 40.9 | 46.2 | ||||||||||||
| Total deferred tax assets, net of valuation allowance | $ | 73.2 | $ | 84.2 | ||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Basis difference in fixed assets | $ | (28.4) | $ | (28.2) | ||||||||||
| Basis difference in intangible assets | (65.0) | (67.4) | ||||||||||||
| Pension and post-retirement benefits | (11.9) | (2.0) | ||||||||||||
| Deferred tax on non-U.S. unremitted earnings | (10.3) | (10.2) | ||||||||||||
| Total deferred tax liabilities | $ | (115.6) | $ | (107.8) | ||||||||||
| Net deferred tax asset (liability) | $ | (42.4) | $ | (23.6) | ||||||||||
| Balance sheet classification: | ||||||||||||||
| Long-term deferred tax assets | 3.5 | 11.2 | ||||||||||||
| Long-term deferred tax liability | (45.9) | (34.8) | ||||||||||||
| Net deferred tax asset (liability) | $ | (42.4) | $ | (23.6) | ||||||||||
As of December 31, 2025, valuation allowances were $40.9 million, including $40.2 million for loss and credit carryforwards and $0.7 million for other assets not expected to be realized. At December 31, 2024, valuation allowances were $46.2 million, including $45.5 million for loss and credit carryforwards and $0.7 million for other assets.
As of December 31, 2025, we had U.S. federal, U.S. state, and non-U.S. tax loss and credit carryforwards that will expire, if unused, as follows:
| (in millions) Year of expiration | U.S. Federal Tax Credits | U.S. State Tax Credits | U.S. State Tax Effected Losses | Non- U.S. Tax Effected Losses | Total | ||||||||||||||||||||||||||||||
| 2026-2030 | $ | — | $ | 0.4 | $ | 1.1 | $ | 0.8 | $ | 2.3 | |||||||||||||||||||||||||
| After 2030 | 1.3 | 0.3 | 5.6 | 0.2 | 7.4 | ||||||||||||||||||||||||||||||
| Indefinite | — | 15.7 | 2.5 | 12.6 | 30.8 | ||||||||||||||||||||||||||||||
| Deferred tax asset on tax carryforwards | $ | 1.3 | $ | 16.4 | $ | 9.2 | $ | 13.6 | $ | 40.5 | |||||||||||||||||||||||||
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of our gross unrecognized tax benefits, excluding interest and penalties, is as follows:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance of liability as of January 1, | $ | 8.4 | $ | 7.9 | $ | 6.9 | ||||||||||||||
| Increase as a result of tax positions taken during a prior year | 0.2 | 0.1 | 0.2 | |||||||||||||||||
| Decrease as a result of tax positions taken during a prior year | — | (0.4) | (0.1) | |||||||||||||||||
| Increase as a result of tax positions taken during the current year | 2.1 | 1.9 | 1.7 | |||||||||||||||||
| Decrease as a result of settlements with taxing authorities | — | — | — | |||||||||||||||||
| Reduction as a result of a lapse of the statute of limitations | (0.4) | (1.1) | (0.8) | |||||||||||||||||
| Balance of liability as of December 31, | $ | 10.3 | $ | 8.4 | $ | 7.9 | ||||||||||||||
As of December 31, 2025, 2024, and 2023, the amount of our unrecognized tax benefits that, if recognized, would affect our effective tax rate was $12.4 million, $10.4 million, and $9.3 million, respectively. The difference between these amounts and those reflected in the table above relates to (1) offsetting tax effects from other tax jurisdictions, and (2) interest expense, net of deferred taxes.
We recognize interest and penalties related to unrecognized tax benefits as a component of our income tax expense. During the years ended December 31, 2025, 2024, and 2023, we recognized interest and penalty (income)/ expense of $0.5 million, $0.5 million, and $0.3 million, respectively, in our Consolidated Statements of Operations. As of December 31, 2025 and 2024, we had accrued $3.2 million, $2.7 million, respectively, of interest and penalties related to unrecognized tax benefits on our Consolidated Balance Sheets.
Income Tax Examinations
Our income tax returns are generally subject to examination by the U.S. federal, U.S. state and local, and non-U.S. tax authorities. Prior to the separation, Crane Company was included in Crane NXT Co.’s consolidated federal income tax group and consolidated tax return. However, as a result of the separation, as described above in Note 1, Crane Company became an independent public company required to file its own corporate income tax returns. Subject to certain limitations and conditions, we have agreed to indemnify Crane NXT Co., for certain pre-separation tax liabilities. For these reasons, and with few exceptions, the years for which we filed returns that are open to examination are as follows:
| Jurisdiction | Year | |||||||
| U.S. state and local | 2019 - 2024 | |||||||
| Non-U.S. | 2019 - 2024 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 26, 2024 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.