8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 FORM 8-K

 CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 27, 2020

CRANE CO.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

Delaware	1-1657		13-1952290
(State or other jurisdiction of incorporation or organization)	(Commission File Number)		(I.R.S. Employer Identification No.)
100 First Stamford Place	Stamford	CT	06902
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: 203-363-7300

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $1.00	CR	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On January 27, 2020, Crane Co. (the “Company”) announced its results of operations for the quarter ended December 31, 2019. The related press release and quarterly financial data supplement is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SECTION 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of December 31, 2019, 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:

For the year ended December 31,	2019		2018		2017
Beginning claims	29,089		32,234		36,052
New claims	2,848		2,434		2,819
Settlements	(983	)	(1,011	)	(1,038	)
Dismissals	(1,898	)	(4,568	)	(5,599	)
Ending claims	29,056		29,089		32,234

Of the 29,056 pending claims as of December 31, 2019, 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 February 25, 2013, a Philadelphia, Pennsylvania, state court jury found us responsible for a 1/10th share of a $2.5 million verdict in the Thomas Amato claim and a 1/5th share of a $2.3 million verdict in the Frank Vinciguerra claim, which were consolidated for trial. We filed post-trial motions requesting judgments in our favor notwithstanding the jury’s verdicts or new trials, and also requesting that settlement offsets be applied to reduce the judgment in accordance with Pennsylvania law. These motions were denied. We appealed, and on April 17, 2015, a panel of the Superior Court of Pennsylvania affirmed the trial court’s ruling. The Supreme Court of Pennsylvania accepted our petition for review and heard oral arguments on September 13, 2016. On November 22, 2016, the Court dismissed our appeal as improvidently granted. We paid the Vinciguerra judgment in the amount of $0.6 million in the fourth quarter 2016. We paid the Amato judgment, with interest, in the amount of $0.3 million in the second quarter of 2017.

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On March 1, 2013, a New York City state court jury entered a $35 million verdict against us in the Ivo Peraica claim. We filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which we argue was excessive under New York appellate case law governing awards for non-economic losses and further were subject to settlement offsets. After the trial court remitted the verdict to $18 million, but otherwise denied our post-trial motion, judgment was entered against us in the amount of $10.6 million (including interest). We appealed. We took a separate appeal of the trial court’s denial of our summary judgment motion. The Court consolidated the appeals, which were heard in the fourth quarter of 2014. In July 2016, we supplemented our briefing based on the New York Court of Appeals Dummitt/Suttner decision. On October 6, 2016, a panel of the Appellate Division, First Department, affirmed the rulings of the trial court on liability issues but further reduced the damages award to $4.25 million, which after settlement offsets was calculated to be $1.94 million. Plaintiff had the option of accepting the reduced amount or having a new trial on damages. We filed a motion with the Appellate Division requesting a rehearing on liability issues. The motion was denied. The New York Court of Appeals also denied review. We paid the Peraica judgment in the amount of $2.7 million in the first quarter of 2017.

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 June 16, 2014, a New York City state court jury entered a $15 million verdict against us in the Ivan Sweberg claim and a $10 million verdict against us in the Selwyn Hackshaw claim. The two claims were consolidated for trial. We filed post-trial motions seeking to overturn the verdicts, to grant new trials, or to reduce the damages, which were denied, except that the Court reduced the Sweberg award to $10 million, and reduced the Hackshaw award to $6 million. Judgments were entered in the amount of $5.3 million in Sweberg and $3.1 million in Hackshaw. We appealed. Oral argument on Sweberg took place on February 16, 2016, and oral argument on Hackshaw took place on March 9, 2016. On October 6, 2016, two panels of the Appellate Division, First Department, affirmed the rulings of the trial court on liability issues but further reduced the Sweberg damages award to $9.5 million and further reduced the Hackshaw damages award to $3 million, which after settlement offsets are calculated to be $4.73 million in Sweberg and $0 in Hackshaw. Plaintiffs were given the option of accepting the reduced awards or having new trials on damages. Plaintiffs subsequently brought an appeal in Hackshaw before the New York Court of Appeals, which the Court denied. We filed a motion with the Appellate Division requesting a rehearing on liability issues in Sweberg. That motion was denied. The New York Court of Appeals also denied review. We paid in the first quarter of 2017 the Sweberg plaintiffs $5.7 million, which was the amount owed under this judgment. No damages were owed in Hackshaw.

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.

On February 9, 2016, a Philadelphia, Pennsylvania, federal court jury found us responsible for a 30% share of a $1.085 million verdict in the Valent Rabovsky claim. The court ordered briefing on the amount of the judgment. We argued, among other things, that settlement offsets reduce the award to plaintiff under Pennsylvania law. A further hearing was held April 26, 2016, after which the court denied our request and entered judgment in the amount of $0.4 million. We filed post-trial motions, which were denied in two decisions issued on August 26, 2016 and September 28, 2016. We pursued an appeal to the Third Circuit Court of Appeals, which was argued on June 12, 2017. On September 27, 2017, the Court entered an order asking the Supreme Court of Pennsylvania to decide one of the issues raised in our appeal. The Supreme Court of Pennsylvania accepted the request, and we settled the matter. The settlement was reflected in the fourth quarter 2017 indemnity amount.

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

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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.

On June 30, 2017, a New York City state court jury entered a $20 million verdict against us in the Geoffrey Anisansel claim. We settled the matter in August 2017. The settlement was reflected in the third quarter 2017 indemnity amount.

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

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the years ended December 31, 2019, 2018 and 2017 totaled $66.2 million, $88.8 million and $88.3 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 years ended December 31, 2019, 2018 and 2017 totaled $41.5 million, $63.9 million and $62.5 million, respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)
For the year ended December 31,	2019			2018			2017
Settlement / indemnity costs incurred *	$	45.5		$	63.0		$	51.8
Defense costs incurred *	20.7			25.8			36.5
Total costs incurred	$	66.2		$	88.8		$	88.3
Settlement / indemnity payments	$	38.9		$	61.5		$	51.7
Defense payments	21.4			26.5			38.9
Insurance receipts	(18.8		)	(24.1		)	(28.1		)
Pre-tax cash payments	$	41.5		$	63.9		$	62.5

* 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 December 31, 2019, we have resolved (by settlement or dismissal) approximately 139,000 claims. The related settlement cost incurred by us and our insurance carriers is approximately $640 million, for an average settlement cost per resolved claim of approximately $4,600. 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 Consolidated Financial Statements”.

Effects on the Consolidated Financial Statements

We have retained an independent actuarial firm to assist management in estimating our asbestos liability in the tort system. The actuarial consultants review information provided by us concerning claims filed, settled and dismissed, amounts paid in settlements and relevant claim information such as the nature of the asbestos-related disease asserted by the claimant, the jurisdiction where filed and the time lag from filing to disposition of the claim. The methodology used by the actuarial consultants to project future asbestos costs is based on our recent historical experience for claims filed, settled and dismissed during a base reference period. Our experience is then compared to estimates of the number of individuals likely to develop asbestos-related diseases determined based on widely used previously conducted epidemiological studies augmented with current data inputs. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, the actuarial consultants estimate the number of future claims that would be filed against us and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for

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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. 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 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.

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

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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.

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

Uncertainties. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution. We caution that our estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on past experience that may not prove reliable as predictors; the assumptions are interdependent and no single factor predominates in determining the liability estimate. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law could also change the estimated liability.

The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance reimbursements, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, due to the uncertainties inherent in litigation matters, no assurances can be given regarding the outcome of any litigation, if necessary, to enforce our rights under our insurance policies or settlement agreements.

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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.

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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(a)	None
(b)	None
(c)	None
(d)	Exhibits
99.1	Earnings Press Release dated January 27, 2020 and Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 2019

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CRANE CO.
January 27, 2020
	By:	/s/ Richard A. Maue
		Richard A. Maue
		Senior Vice President and
		Chief Financial Officer

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Document and Entity Information	As of
	1/27/2020
Entity Central Index Key	0000025445
Amendment Flag	false

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EX-99.1

	Exhibit 99.1
Crane Co.	News
	Contact:
	Jason D. Feldman
	Director, Investor Relations
	203-363-7329
	www.craneco.com

Crane Co. Reports 2019 Results and Provides 2020 Guidance

Highlights from Full Year 2019 Results and 2020 Guidance:

• GAAP earnings per diluted share (EPS) of $2.20, inclusive of a $2.98 per share charge related to a non-cash true-up of the Company's asbestos liability, compared to $5.50 in 2018.

• Excluding Special Items, EPS of $6.02 increased slightly compared to $5.99 in 2018.

• GAAP operating profit of $210 million and GAAP operating margin of 6.4%.

• Excluding Special Items, operating profit was a record $494 million and operating margin was a record 15.0%.

• Record free cash flow of $325 million (cash provided by operating activities less capital spending).

• Completed $80 million of share repurchases during the fourth quarter of 2019.

• Announcing a 10% dividend increase.

• Initiated a new round of proactive repositioning actions in our Fluid Handling business expected to generate $10 million of savings in 2022.

• Signed a definitive agreement to acquire CIRCOR's Instrumentation & Sampling (I&S) business for $172 million on a cash-free and debt-free basis as a strategic bolt-on to our process valve business.

• Acquired Cummins Allison Corp. on December 31, 2019 for $160 million on a cash-free and debt-free basis as a strategic bolt-on to our Crane Payment Innovations business.

• Introducing 2020 GAAP EPS guidance of $5.75-$6.05.

• Excluding Special Items, 2020 EPS guidance is $6.20-$6.50.

STAMFORD, CONNECTICUT - January 27, 2020 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported full year and fourth quarter 2019 financial results, and provided its 2020 outlook.

"We finished 2019 strong, with solid operational performance across our businesses, and we took several other actions to further strengthen Crane for continued profitable growth," said Max Mitchell, Crane Co. President and Chief Executive Officer. "In addition to solid progress on numerous growth and productivity

initiatives last year, we delivered a record $325 million of free cash flow. We also repurchased $80 million of shares during the fourth quarter, and today, we raised our dividend by 10%, further reflecting confidence in our long-term outlook."

"At the end of 2019, we commenced additional proactive repositioning actions in our Fluid Handling business, including additional facility closures to better geographically align our manufacturing footprint with customer needs. These actions are expected to generate $10 million of annual savings by 2022, and are incremental to the previously disclosed 2017 repositioning actions.

"We were also active last quarter on inorganic growth opportunities. As previously announced, we signed a definitive agreement in December 2019 to acquire CIRCOR's I&S business for $172 million on a cash-free and debt-free basis, and in December 2019, we acquired Cummins Allison for $160 million on a cash-free and debt-free basis. I&S is a good bolt-on to our process valve business adding a broad range of mission-critical fluid control instrumentation and sampling solutions for severe service applications in chemical, refining, oil & gas, and industrial markets. Cummins Allison is a nice addition to our Crane Payment Innovations (CPI) business, adding higher-speed and back-office banknote and coin counting, sorting and validation solutions aligned with CPI's end markets in retail, gaming and financial services. Both acquisitions are expected to meet Crane's strict financial return criteria for acquisitions, and together are expected to be accretive to adjusted EPS by approximately $0.15 this year, growing to approximately $0.25 by 2022. Even after these actions, Crane retains substantial financial capacity for further capital deployment throughout 2020 and beyond."

"Today, we are also introducing 2020 EPS guidance, excluding Special items, of $6.20-$6.50. At Fluid Handling, we expect continued margin expansion despite a low-growth end market environment. We expect Payment & Merchandising Technologies to deliver positive organic growth in 2020 with underlying margin expansion despite previously discussed headwinds from temporarily lower demand at Crane Currency from the U.S. Government; Cummins Allison should also contribute to sales and

adjusted operating profit growth, although it will be initially dilutive to segment margins. Momentum continues across nearly all solutions and end markets at Aerospace & Electronics, but guidance does include a decline in total 2020 sales and margins reflecting the temporary 737-MAX production pause and revised rate assumptions that Boeing announced in late December."

Mr. Mitchell concluded: "Overall, I am proud of our operational performance, and excited about our prospects as we continue to deliver on growth investments and new product development, positioning Crane for years of profitable growth. Based on our current medium-term outlook, including both the completion of the U.S. Government's currency destocking and resumption of 737-MAX production during 2020, I believe that Crane is on-track to achieve our previously disclosed 2021 adjusted EPS target of $7.50-$8.00." (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Fourth Quarter 2019 Results

Fourth quarter 2019 GAAP net loss of $1.89 per share compared to earnings of $1.46 per diluted share in the fourth quarter of 2018. Excluding Special Items, 2019 fourth quarter EPS of $1.58 compared to $1.64 in the fourth quarter of last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Fourth quarter 2019 sales were $838 million, a slight decline compared to the fourth quarter of 2018. The sales decline was comprised of $4 million of unfavorable foreign exchange, partially offset by $2 million of core growth.

Fourth quarter 2019 operating loss was $135 million, compared to operating profit of $110 million in the fourth quarter of 2018. Excluding Special Items, operating profit of $128 million increased 3% compared to $125 million in the fourth quarter of last year. Excluding Special Items, operating margin of 15.3%

increased 50 basis points compared to 14.8% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Full Year 2019 Results

Full year 2019 GAAP EPS was $2.20, compared to $5.50 in 2018. Excluding Special Items, 2019 EPS increased slightly to $6.02, compared to $5.99 in 2018. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Full year 2019 sales were $3.3 billion, a decline of 2% compared to 2018. The sales decline was comprised of $53 million, or 2%, of unfavorable foreign exchange, and a $13 million decline in core sales, partially offset by a $4 million net benefit from acquisitions.

Full year 2019 operating profit was $210 million, compared to $441 million in 2018. Operating margin of 6.4% compared to 13.2% last year. Excluding Special Items, record operating profit of $494 million increased 2% compared to $485 million in 2018. Excluding Special Items, record operating margin of 15.0% increased 50 basis points compared to 14.5% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Full Year Cash Flow and Other Financial Metrics

Cash provided by operating activities for full year 2019 was $394 million, compared to $414 million in 2018. Full year 2019 free cash flow (cash provided by operating activities less capital spending) was $325 million, compared to $305 million of free cash flow last year. The Company completed $80 million of share repurchases during the fourth quarter of 2019. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

The Company's cash position was $394 million at December 31, 2019, compared to $343 million at December 31, 2018. Total debt was $991 million at December 31, 2019, compared to $949 million at December 31, 2018.

Special Items including Updated Asbestos Liability

Full year and fourth quarter 2019 results include an after-tax net asbestos provision of $181 million, or $2.98 per share for the full-year. This provision reflects a non-cash update to our asbestos liability estimate reflecting trends and average settlement values subsequent to our last asbestos estimate update on December 31, 2016. The liability estimate continues to cover all pending claims and future claims projected to be filed against us through the generally accepted end point of 2059.

Rich Maue, Crane Co. Senior Vice President and Chief Financial Officer, stated: "In December 2016, we updated our asbestos liability estimate and extended the time horizon of that liability through the generally accepted end point in 2059. The December 2016 liability estimate update was completed shortly after the New York State Court of Appeals issued its opinion in Dummitt v. Crane Co., and it reflected our best estimate of Dummitt's impact on asbestos claims in New York State. Based on our experience in the post-Dummitt litigation environment over the last three years, we are now able to further refine our estimates of indemnity payments and defense costs, resulting in an additional non-cash after-tax net asbestos provision of $181 million."

"We expect asbestos related annual after-insurance, after-tax cash outflow of approximately $40 million in 2020, consistent with the average cash outflow in recent years, and with annual cash outflows stable to gradually declining over time. While this is a 'lifetime' estimate, due to uncertainties in the asbestos litigation environment, as well as uncertainties inherent in the estimation process, future reviews may result in additional adjustments to our total asbestos-related liability."

Mr. Maue concluded: "In addition to aggressively managing our asbestos liability, we have also pursued a strategy to 'outgrow' our asbestos liability, and we have delivered substantial free cash flow growth over the last decade as our asbestos-related cash outflow has declined. For context, our asbestos-related cash outflow net of insurance peaked in 2011 at $79 million, and in that year, we generated $115 million of free cash flow; in 2019, asbestos related cash outflow net of insurance was $42 million ($33 million after-tax), and we generated a record $325 million in free cash flow." For additional information, please see the Company's Form 8-K filed with the SEC today. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

In addition to the aforementioned asbestos provision, Special Items for the full year 2019 included the following after-tax items: an environmental provision of $14.9 million, or $0.25 per share; repositioning related charges of $25.6 million, or $0.43 per share; a non-cash pension cost adjustment of $6.3 million, or $0.10 per share; and, acquisitions related items, net, of $3.8 million, or $0.06 per share. In addition to the aforementioned asbestos provision, Special Items for the fourth quarter 2019 included the following after-tax items: an environmental provision of $14.9 million, or $0.25 per share; repositioning related charges of $9.1 million, or $0.15 per share; a non-cash pension cost adjustment of $1.8 million, or $0.03 per share; and, acquisitions related items, net, of $1.2 million, or $0.02 per share. Special items for the full year 2018 included $29.5 million in net after-tax charges, or $0.49 per share, and Special items for the fourth quarter 2018 included $10.8 million in net after-tax charges, or $0.18 per share. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Fourth Quarter 2019 Segment Results

All comparisons detailed in this section refer to operating results for the fourth quarter 2019 versus the fourth quarter 2018.

Fluid Handling

	Fourth Quarter						Change
(dollars in millions)	2019			2018
Sales	$	277		$	280		$	(3	)	(1	%)
Operating Profit	$	25		$	31		$	(6	)	(19	%)
Operating Profit, before Special Items*	$	37		$	34		$	3		9	%
Profit Margin	9.0		%	11.0		%
Profit Margin, before Special Items*	13.5		%	12.3		%
*Please see the attached Non-GAAP Financial Measures tables

Sales decreased $3 million, or 1%, driven by $1 million of unfavorable foreign exchange and $1 million of core sales decline. Operating margin declined to 9.0%, compared to 11.0% last year, primarily reflecting higher repositioning costs, lower volumes, and adverse mix, partially offset by strong productivity and repositioning benefits. Excluding Special Items, operating margin increased to 13.5%, a 120 basis point increase compared to 12.3% last year primarily reflecting strong productivity and repositioning benefits, partially offset by lower volumes and adverse mix. Fluid Handling order backlog was $267 million at December 31, 2019, compared to $280 million at December 31, 2018.

Payment & Merchandising Technologies

	Fourth Quarter						Change
(dollars in millions)	2019			2018
Sales	$	315		$	313		$	2		1	%
Operating Profit	$	53		$	46		$	6		14	%
Operating Profit, before Special Items*	$	55		$	57		$	(1	)	(2	%)
Profit Margin	16.7		%	14.7		%
Profit Margin, before Special Items*	17.6		%	18.1		%
*Please see the attached Non-GAAP Financial Measures tables

Sales increased $2 million, or 1%, driven by $5 million, or 2%, of core growth, partially offset by $3 million, or 1%, of unfavorable foreign exchange. Operating margin improved to 16.7%, from 14.7% last year and 14.1% last quarter, with the year-over-year improvement primarily reflecting strong

productivity, repositioning benefits, and lower acquisition related charges, partially offset by substantially adverse product mix. Excluding Special Items, operating margins were 17.6% compared to 18.1% last year and 14.5% last quarter. The year-over-year change primarily reflects adverse product mix, partially offset by strong productivity and repositioning benefits.

Aerospace & Electronics

	Fourth Quarter						Change
(dollars in millions)	2019			2018
Sales	$	203		$	197		$	6	3	%
Operating Profit	$	48		$	44		$	4	9	%
Operating Profit, before Special Items*	$	48		$	45		$	4	8	%
Profit Margin	23.7		%	22.5		%
Profit Margin, before Special Items*	23.8		%	22.8		%
*Please see the attached Non-GAAP Financial Measures tables

Sales increased $6 million, or 3%, driven by higher core sales. Operating margin improved to 23.7%, from 22.5% last year, primarily reflecting strong productivity and operating leverage on higher volumes. Excluding Special Items, operating margin improved to 23.8%, up from 22.8% last year. Aerospace & Electronics' order backlog was a record $567 million at December 31, 2019 compared to $447 million at December 31, 2018.

Engineered Materials

	Fourth Quarter						Change
(dollars in millions)	2019			2018
Sales	$	43		$	51		$	(7	)	(14	%)
Operating Profit	$	4		$	5		$	(1	)	(24	%)
Profit Margin	9.4		%	10.7		%

Sales decreased $7 million, or 14%, driven primarily by lower sales to Recreational Vehicle customers. Operating margin declined to 9.4%, from 10.7% last year, primarily reflecting lower volumes.

Introducing 2020 Guidance

We are introducing full year 2020 GAAP EPS guidance in a range of $5.75-$6.05. Excluding Special items, full year 2020 EPS guidance is $6.20-$6.50. Sales are expected to be approximately $3.5 billion, reflecting a net benefit from acquisitions of approximately 8%, partially offset by a slight decline in core sales, and an unfavorable foreign exchange impact of approximately 0.5% to 1%. Guidance reflects contributions from both the acquisition of Cummins Allison Corp. which closed on December 31, 2019 and the pending acquisition of I&S which is expected to close early in the first quarter of 2020, as well as the temporary impact of the 737-MAX production halt. Full year 2020 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $330 million to $360 million. (Please see the attached Non-GAAP Financial Measures tables.)

Additional guidance details will be provided at the Company's Annual Investor Day conference scheduled for February 27, 2020.

Additional Information

Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 28, 2020 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company’s website.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane Co. provides products and solutions to customers in the chemicals, oil & gas, power, automated payment solutions, banknote design and production and aerospace & defense markets, along with a wide range of general industrial and consumer related end markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane Co. has approximately 12,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the management’s current beliefs, expectations, plans, assumptions and objectives regarding Crane Co.’s future financial performance and are subject to significant risks and uncertainties. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in these forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed with the Securities and Exchange Commission. Such reports are available on the Securities Exchange Commission’s website (www.sec.gov). Crane Co. does not undertake to update any forward-looking statements.

(Financial Tables Follow)

CRANE CO.

Income Statement Data

(in millions, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2019			2018			2019			2018
Net sales:
Fluid Handling	$	277.0		$	279.7		$	1,117.4		$	1,101.8
Payment & Merchandising Technologies	314.6			312.8			1,158.3			1,257.0
Aerospace & Electronics	202.5			196.5			798.8			743.5
Engineered Materials	43.4			50.7			208.6			243.2
Total net sales	$	837.5		$	839.7		$	3,283.1		$	3,345.5
Operating (loss) profit:
Fluid Handling	$	24.9		$	30.8		$	131.7		$	118.8
Payment & Merchandising Technologies	52.5			46.1			177.3			186.0
Aerospace & Electronics	48.0			44.2			189.4			164.2
Engineered Materials	4.1			5.4			26.8			37.8
Corporate	(17.0		)	(16.4		)	(66.9		)	(65.5		)
Asbestos provision	(229.0		)	—			(229.0		)	—
Environmental provision	(18.9		)	—			(18.9		)	—
Total operating (loss) profit	(135.4		)	110.1			210.4			441.3
Interest income	0.8			0.6			2.7			2.3
Interest expense	(11.8		)	(11.1		)	(46.8		)	(50.9		)
Miscellaneous, net	0.6			4.9			4.4			18.7
(Loss) income before income taxes	(145.8		)	104.5			170.7			411.4
(Benefit from) provision for income taxes	(33.3		)	15.4			37.1			75.9
Net (loss) income before allocation to noncontrolling interests	(112.5		)	89.1			133.6			335.5
Less: Noncontrolling interest in subsidiaries' earnings (loss)	0.1			(0.1		)	0.3			(0.1		)
Net (loss) income attributable to common shareholders	$	(112.6	)	$	89.2		$	133.3		$	335.6
Share data:
(Loss) earnings per diluted share	$	(1.89	)	$	1.46		$	2.20		$	5.50
Average diluted shares outstanding	59.5			60.9			60.6			61.0
Average basic shares outstanding	59.5			59.5			59.8			59.6
Supplemental data:
Cost of sales	$	794.6		$	544.6		$	2,352.0		$	2,156.2
Selling, general & administrative	178.3			170.9			720.7			713.4
Asbestos provision *	229.0			—			229.0			—
Environmental provision *	18.9			—			18.9			—
Acquisition and integration related charges *	1.5			8.4			5.2			19.8
Repositioning related charges *	14.1			5.7			30.3			14.7
Depreciation and amortization **	29.3			35.9			113.5			120.0
Stock-based compensation expense **	5.5			5.5			22.3			21.6

* For 2019, amounts included within cost of sales and selling, general & administrative costs.

** For 2019 and 2018, amounts included within cost of sales and selling, general & administrative costs.

Totals may not sum due to rounding

CRANE CO.

Condensed Balance Sheets

(in millions)

	December 31,  2019		December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	393.9	$	343.4
Accounts receivable, net	560.6		515.8
Current insurance receivable - asbestos	14.1		16.0
Inventories, net	456.7		411.5
Other current assets	75.2		76.2
Total current assets	1,500.5		1,362.9
Property, plant and equipment, net	615.8		599.1
Long-term insurance receivable - asbestos	83.6		75.0
Other assets	766.1		602.0
Goodwill	1,472.2		1,403.7
Total assets	$	4,438.2	$	4,042.7
Liabilities and Equity
Current liabilities
Notes payable and current maturities of long-term debt	$	149.4	$	6.9
Accounts payable	314.5		329.2
Current asbestos liability	65.0		66.0
Accrued liabilities	371.7		337.1
Income taxes	13.0		1.0
Total current liabilities	913.6		740.2
Long-term debt	842.0		942.3
Long-term deferred tax liability	73.8		53.2
Long-term asbestos liability	646.6		451.3
Other liabilities	485.9		328.6
Total equity	1,476.3		1,527.1
Total liabilities and equity	$	4,438.2	$	4,042.7

Totals may not sum due to rounding

CRANE CO.

Condensed Statements of Cash Flows

(in millions)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019			2018
Operating activities:
Net (loss) income attributable to common shareholders	$	(112.6	)	$	89.2		$	133.3		$	335.6
Noncontrolling interest in subsidiaries' earnings (loss)	0.1			(0.1		)	0.3			(0.1		)
Net (loss) income before allocations to noncontrolling interests	(112.5		)	89.1			133.6			335.5
Asbestos provision	229.0			—			229.0			—
Environmental provision	18.9			—			18.9			—
Loss on deconsolidation of joint venture	—			1.7			1.2			1.7
Realized gain on marketable securities	—			—			(1.1		)	—
Depreciation and amortization	29.3			35.9			113.5			120.0
Stock-based compensation expense	5.5			5.5			22.3			21.6
Defined benefit plans and postretirement credit	(0.3		)	(3.4		)	(0.7		)	(15.0		)
Deferred income taxes	(49.8		)	23.2			(31.0		)	47.7
Cash provided by (used for) operating working capital	117.1			57.6			(40.0		)	16.3
Defined benefit plans and postretirement contributions	(2.7		)	(4.0		)	(8.7		)	(59.8		)
Environmental payments, net of reimbursements	(1.7		)	(0.9		)	(8.2		)	(6.3		)
Other	2.6			4.2			6.6			16.0
Subtotal	235.4			208.9			435.4			477.7
Asbestos related payments, net of insurance recoveries	(12.5		)	(17.5		)	(41.5		)	(63.9		)
Total provided by operating activities	222.9			191.4			393.9			413.8
Investing Activities:
Capital expenditures	(17.9		)	(33.2		)	(68.8		)	(108.8		)
Proceeds from disposition of capital assets	1.8			0.6			3.1			1.9
Payments for acquisitions, net of cash acquired	(156.2		)	—			(156.2		)	(648.0		)
Impact of deconsolidation of joint venture	—			2.6			(0.2		)	2.6
Purchase of marketable securities	—			—			(8.8		)	—
Proceeds from sale of marketable securities	—			—			9.9			—
Total used for investing activities	(172.3		)	(30.0		)	(221.0		)	(752.3		)
Financing Activities:
Dividends paid	(23.1		)	(20.8		)	(93.2		)	(83.5		)
Reacquisition of shares on open market	(79.9		)	(25.1		)	(79.9		)	(50.1		)
Stock options exercised, net of shares reacquired	0.3			3.6			2.9			16.1
Debt issuance costs	—			—			—			(5.4		)
Repayment of long-term debt	(94.9		)	(1.4		)	(99.4		)	(452.2		)
Repayment of short-term debt	(7.4		)	—			(7.4		)	(100.0		)
Proceeds from issuance of long-term debt	—			13.1			3.0			567.2
Proceeds from issuance of short-term debt	—			—			—			100.0
Proceeds from (repayment of) issuance of commercial paper with maturities of 90 days or less	124.4			(106.3		)	124.4			—
Proceeds from issuance of commercial paper with maturities greater than 90 days	25.0			—			25.0			—
Total used for financing activities	(55.6		)	(136.9		)	(124.6		)	(7.9		)
Effect of exchange rate on cash and cash equivalents	10.1			(4.7		)	2.2			(16.4		)
Increase (decrease) in cash and cash equivalents	5.1			19.8			50.5			(362.8		)
Cash and cash equivalents at beginning of period	388.8			323.6			343.4			706.2
Cash and cash equivalents at end of period	$	393.9		$	343.4		$	393.9		$	343.4

Totals may not sum due to rounding

CRANE CO.

Order Backlog

(in millions)

	December 31, 2019			September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018
Fluid Handling	$	267.0		$	272.1	$	274.9	$	284.8	$	279.6
Payment & Merchandising Technologies	311.4		*	291.8		286.8		322.2		331.5
Aerospace & Electronics	567.4			564.3		502.8		487.1		446.6
Engineered Materials	9.4			10.1		11.5		12.3		14.9
Total backlog	$	1,155.2		$	1,138.3	$	1,076.0	$	1,106.4	$	1,072.6

* Includes $44 million as of December 31, 2019 of backlog pertaining to the Cummins Allison business acquired in December 2019.

Totals may not sum due to rounding

CRANE CO.

Non-GAAP Financial Measures

(in millions, except per share data)

	Three Months Ended December 31,				Twelve Months Ended December 31,				Percent Change December 31, 2019
	2019		2018		2019		2018		Three Months		Twelve Months
INCOME ITEMS
Net sales	$837.5		$839.7		$3,283.1		$3,345.5		(0.3	)%	(1.9	)%
Operating (loss) profit	(135.4)		110.1		210.4		441.3		NM		(52.3	)%
Percentage of sales	(16.2	)%	13.1	%	6.4	%	13.2	%
Special items impacting operating (loss) profit:
Asbestos provision	229.0		—		229.0		—
Environmental provision	18.9		—		18.9		—
Inventory step-up and backlog amortization	—		0.3		—		9.1
Acquisition and integration related charges	1.5		8.4		5.2		19.8
Repositioning related charges	14.1		5.7		30.3		14.7
Operating profit before special items	$128.1		$124.5		$493.8		$484.9		2.9	%	1.8	%
Percentage of sales	15.3	%	14.8	%	15.0	%	14.5	%
Net (loss) income attributable to common shareholders	$(112.6)		$89.2		$133.3		$335.6
Per Share	$(1.89)		$1.46		$2.20		$5.50		NM		(60.0	)%
Special items impacting net (loss) income attributable to common shareholders:
Asbestos provision - net of tax	180.9		—		180.9		—
Per share	$3.04				$2.98
Environmental provision - net of tax	14.9		—		14.9		—
Per share	$0.25				$0.25
Inventory step-up and backlog amortization - net of tax	—		0.2		—		6.9
Per share			$0.00				$0.11
Acquisition and integration related charges - net of tax	1.2		6.5		3.8		15.1
Per share	$0.02		$0.11		$0.06		$0.25
Repositioning related charges - net of tax	9.1		3.9		25.6		10.9
Per share	$0.15		$0.06		$0.43		$0.18
Realized gain on marketable securities - net of tax	—		—		(0.8)		—
Per share					$(0.01)
Incremental financing costs associated with acquisition - net of tax	—		—		—		2.1
Per share							$0.03
Deconsolidation of joint venture - net of tax	—		—		0.8		—
Per share					$0.01
Impact of non-cash pension cost adjustment - net of tax *	1.8		—		6.3		—
Per share	$0.03				$0.10
Impact of tax law change	—		0.2		—		(5.5)
Per share			$0.00				$(0.09)
Net income attributable to common shareholders before special items	$95.3		$100.0		$364.8		$365.1		(4.7	)%	(0.1	)%
Per basic share	$1.60		$1.68		$6.10		$6.12		(4.8	)%	(0.3	)%
Per diluted share	$1.58		$1.64		$6.02		$5.99		(3.7	)%	0.5	%

Totals may not sum due to rounding

* Non-service pension cost adjustment related to a reduction in expected pension returns.

In the three months ended December 31, 2019, average shares outstanding excluding the effect of diluted stock options were used to compute the per share amounts since this period was in a loss position. Had net income attributable to common shareholders been reported for this period, average shares outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).

Average basic shares outstanding	59.5
Effect of diluted stock options	0.8
Average shares outstanding including the effect of stock options	60.3

When considering the effect of dilutive stock options on shares outstanding, net income attributable to common shareholders before special items is $1.58 per share for the three months ended December 31, 2019.

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019			2018
Special items impacting provision for income taxes
(Benefit from) provision for income taxes - GAAP basis	$	(33.3	)	$	15.4		$	37.1		$	75.9
Tax effect of asbestos provision	48.1			—			48.1			—
Tax effect of environmental provision	4.0			—			4.0			—
Tax effect of inventory step-up and backlog amortization	—			—			—			2.2
Tax effect of acquisition and integration related charges	0.2			2.0			1.3			4.7
Tax effect of repositioning related charges	5.0			1.7			4.7			3.8
Tax effect of realized gain on marketable securities	—			—			(0.3		)	—
Tax effect of incremental financing costs associated with acquisition	—			—			—			0.6
Tax effect of deconsolidation of joint venture	—			—			0.4			—
Tax effect of impact of non-cash pension cost adjustment	0.6			—			2.0			—
Impact of tax law change	—			(0.2		)	—			5.5
Provision for income taxes - non-GAAP basis	$	24.6		$	18.9		$	97.3		$	92.7

SEGMENT INFORMATION:
	For the three months ended December 31, 2019
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net sales	$	277.0		$	314.6		$	202.5		$	43.4		$	—		$	837.5
Operating profit (loss) - GAAP	24.9			52.5			48.0			4.1			(264.9		)	(135.4		)
Asbestos provision, net	—			—			—			—			229.0			229.0
Environmental provision, net	—			—			—			—			18.9			18.9
Acquisition and integration related charges	0.6			0.8			—			—			0.1			1.5
Repositioning related charges	11.8			2.1			0.2			—			—			14.1
Operating profit (loss) before special items	$	37.3		$	55.4		$	48.2		$	4.1		$	(17.0	)	$	128.1
Percentage of sales	13.5		%	17.6		%	23.8		%	9.4		%				15.3		%

	For the three months ended December 31, 2018
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net Sales	$	279.7		$	312.8		$	196.5		$	50.7		$	—		$	839.7
Operating profit (loss) - GAAP	30.8			46.1			44.2			5.4			(16.4		)	110.1
Inventory step-up and backlog amortization	—			0.3			—			—			—			0.3
Acquisition and integration related charges	—			8.4			—			—			—			8.4
Repositioning related charges	3.5			1.7			0.5			—			—			5.7
Operating profit (loss) before special items	$	34.3		$	56.5		$	44.7		$	5.4		$	(16.4	)	$	124.5
Percentage of sales	12.3		%	18.1		%	22.8		%	10.7		%				14.8		%

Totals may not sum due to rounding

	For the twelve months ended December 31, 2019
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net sales	$	1,117.4		$	1,158.3		$	798.8		$	208.6		$	—		$	3,283.1
Operating profit (loss) - GAAP	131.7			177.3			189.4			26.8			(314.8		)	210.4
Asbestos provision, net	—			—			—			—			229.0			229.0
Environmental provision, net	—			—			—			—			18.9			18.9
Acquisition and integration related charges	0.6			2.4			—			—			2.2			5.2
Repositioning related charges	19.2			7.6			3.5			—			—			30.3
Operating profit (loss) before special items	$	151.5		$	187.4		$	192.9		$	26.8		$	(64.8	)	$	493.8
Percentage of sales	13.6		%	16.2		%	24.1		%	12.9		%				15.0		%

	For the twelve months ended December 31, 2018
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net sales	$	1,101.8		$	1,257.0		$	743.5		$	243.2		$	—		$	3,345.5
Operating profit (loss) - GAAP	118.8			186.0			164.2			37.8			(65.5		)	441.3
Inventory step-up and backlog amortization	0.4			8.7			—			—			—			9.1
Acquisition and integration related charges	—			19.8			—			—			—			19.8
Repositioning related charges	10.0			3.7			1.0			—			—			14.7
Operating profit (loss) before special items	$	129.2		$	218.2		$	165.2		$	37.8		$	(65.5	)	$	484.9
Percentage of sales	11.7		%	17.4		%	22.2		%	15.5		%				14.5		%

For the three months ended September 30, 2019	Payment & Merchandising Technologies
Net sales	$248.9
Operating profit - GAAP	35.1
Acquisition and integration related charges	0.1
Repositioning related charges	0.9
Operating profit before special items	$36.1
Percentage of sales	14.5	%

Totals may not sum due to rounding

CRANE CO.

Guidance

(in millions, except per share data)

	2020 Full Year Guidance
2020 EARNINGS PER SHARE GUIDANCE:	Low		High
Earnings per share - GAAP basis	$	5.75	$	6.05
Repositioning costs	0.10		0.10
M&A related, net	0.35		0.35
Earnings per Share - non-GAAP basis	$	6.20	$	6.50

CASH FLOW ITEMS:

	Three Months Ended December 31,						Twelve Months Ended December 31,						2020 Full Year Guidance						Twelve Months Ended December 31,
	2019			2018			2019			2018			Low			High			2011
Cash provided by operating activities  before asbestos-related payments	$	235.4		$	208.9		$	435.4		$	477.7		$	455.0		$	485.0		$	229.1
Asbestos-related payments, net of insurance recoveries	(12.5		)	(17.5		)	(41.5		)	(63.9		)	(50.0		)	(50.0		)	(79.3		)
Cash provided by operating activities	222.9			191.4			393.9			413.8			405.0			435.0			149.8
Less: Capital expenditures	(17.9		)	(33.2		)	(68.8		)	(108.8		)	(75.0		)	(75.0		)	(34.7		)
Free cash flow	$	205.0		$	158.2		$	325.1		$	305.0		$	330.0		$	360.0		$	115.1

Totals may not sum due to rounding

Certain non-GAAP measures have been provided to facilitate comparison with the prior year.

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance.

In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

XML

Cover Page Cover Page	Jan. 27, 2020
Cover page.
Document Type	8-K
Document Period End Date	Jan. 27, 2020
Entity Registrant Name	CRANE CO.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-1657
Entity Tax Identification Number	13-1952290
Entity Address, Address Line One	100 First Stamford Place
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06902
City Area Code	203
Local Phone Number	363-7300
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, par value $1.00
Trading Symbol	CR
Security Exchange Name	NYSE
Entity Central Index Key	0000025445
Amendment Flag	false