Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CRANE CO /DE/ | a8-kxq42012asbestosander.htm |
| EX-3.1 - EXHIBIT - CRANE CO /DE/ | exhibit31-bylaws1x28x13.htm |
| EX-99.3 - EXHIBIT - CRANE CO /DE/ | exhibit993-mgmtchangespres.htm |
| EX-99.1 - EXHIBIT - CRANE CO /DE/ | exhibit991-pressreleasexq4.htm |
Exhibit 99.2
CRANE CO.
Income Statement Data
(in thousands, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Net Sales: | |||||||||||||||||||||
Aerospace & Electronics | $ | 176,081 | $ | 171,973 | $ | 701,208 | $ | 677,663 | |||||||||||||
Engineered Materials | 46,900 | 45,037 | 216,503 | 220,071 | |||||||||||||||||
Merchandising Systems | 94,160 | 86,204 | 371,901 | 373,907 | |||||||||||||||||
Fluid Handling | 291,884 | 294,386 | 1,195,501 | 1,140,315 | |||||||||||||||||
Controls | 20,763 | 22,204 | 93,955 | 88,413 | |||||||||||||||||
Total Net Sales | $ | 629,788 | $ | 619,804 | $ | 2,579,068 | $ | 2,500,369 | |||||||||||||
Operating Profit (Loss) from Continuing Operations: | |||||||||||||||||||||
Aerospace & Electronics | $ | 39,181 | $ | 38,785 | $ | 156,015 | $ | 145,624 | |||||||||||||
Engineered Materials | 3,344 | 4,562 | 24,522 | 29,754 | |||||||||||||||||
Merchandising Systems | 10,447 | 7,705 | 33,771 | 30,337 | |||||||||||||||||
Fluid Handling | 39,247 | 38,329 | 148,167 | 149,803 | |||||||||||||||||
Controls | 2,300 | 2,336 | 12,813 | 11,228 | |||||||||||||||||
Corporate | (18,336 | ) | (13,748 | ) | (64,847 | ) | (58,201 | ) | |||||||||||||
Asbestos Provision | — | (241,647 | ) | — | (241,647 | ) | |||||||||||||||
Environmental Provision | — | (30,327 | ) | — | (30,327 | ) | |||||||||||||||
Total Operating Profit (Loss) from Continuing Operations | 76,183 | (194,005 | ) | 310,441 | 36,571 | ||||||||||||||||
Interest Income | 587 | 514 | 1,879 | 1,635 | |||||||||||||||||
Interest Expense | (6,717 | ) | (6,730 | ) | (26,831 | ) | (26,255 | ) | |||||||||||||
Miscellaneous- Net | (180 | ) | (452 | ) | (884 | ) | 2,810 | * | |||||||||||||
Income (Loss) from Continuing Operations Before Income Taxes | 69,873 | (200,673 | ) | 284,605 | 14,761 | ||||||||||||||||
Provision for Income Taxes | 23,901 | (74,991 | ) | 88,416 | (8,055 | ) | |||||||||||||||
Income (Loss) from Continuing Operations | 45,972 | (125,682 | ) | 196,189 | 22,816 | ||||||||||||||||
Profit from Discontinued Operations attributable to common shareholders (a) | — | 1,350 | 3,777 | 5,693 | |||||||||||||||||
Gain from Sales of Discontinued Operations attributable to common shareholders (b) | — | — | 29,445 | — | |||||||||||||||||
Profit from Discontinued Operations attributable to common shareholders, net of tax (a) | — | 878 | 2,456 | 3,700 | |||||||||||||||||
Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax (b) | — | — | 19,176 | — | |||||||||||||||||
Gain / Profit from Discontinued Operations, net of tax | — | 878 | 21,632 | 3,700 | |||||||||||||||||
Net income (loss) before allocation to noncontrolling interests | 45,971 | (124,805 | ) | 217,821 | 26,516 | ||||||||||||||||
Less: Noncontrolling interest in subsidiaries' earnings | 327 | 324 | 828 | 201 | |||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 45,644 | $ | (125,129 | ) | $ | 216,993 | $ | 26,315 | ||||||||||||
1
Share Data: | |||||||||||||||||||||
Earnings (Loss) per share from Continuing Operations | $ | 0.79 | $ | (2.18 | ) | $ | 3.35 | $ | 0.38 | ||||||||||||
Earnings per share from Discontinued Operations | — | 0.02 | 0.37 | 0.06 | |||||||||||||||||
Earnings (Loss) per Diluted Share | $ | 0.79 | $ | (2.16 | ) | $ | 3.72 | $ | 0.44 | ||||||||||||
Average Diluted Shares Outstanding | 57,783 | 57,903 | 58,293 | 59,204 | |||||||||||||||||
Average Basic Shares Outstanding | 57,008 | 57,903 | 57,443 | 58,120 | |||||||||||||||||
Supplemental Data: | |||||||||||||||||||||
Cost of Sales | $ | 417,569 | $ | 417,950 | $ | 1,708,240 | $ | 1,653,238 | |||||||||||||
Asbestos Provision | 241,647 | 241,647 | |||||||||||||||||||
Environmental Provision | 30,327 | 30,327 | |||||||||||||||||||
Selling, General & Administrative | 131,505 | 123,885 | 539,755 | 538,586 | |||||||||||||||||
Repositioning Charges | 4,531 | — | 20,632 | — | |||||||||||||||||
Depreciation and Amortization ** | 14,141 | 15,735 | 57,263 | 62,943 | |||||||||||||||||
Stock-Based Compensation Expense | 4,459 | 3,840 | 17,319 | 14,972 | |||||||||||||||||
* | Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011. |
** | Amount included within cost of sales and selling, general & administrative costs. |
(a) Amounts represent the operating profit, and after-tax profit, from the Houston Service Center and Azonix Corporation businesses divested in June 2012. | ||||||||||||
(b) Amounts represent the pre-tax and after-tax gains from the June 2012 sales of both the Houston Service Center and the Azonix Corporation. | ||||||||||||
2
CRANE CO.
Condensed Balance Sheets
(in thousands)
December 31, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and Cash Equivalents | $ | 423,947 | $ | 245,089 | ||||
Accounts Receivable, net | 333,330 | 349,250 | ||||||
Current Insurance Receivable - Asbestos | 33,722 | 16,345 | ||||||
Inventories, net | 352,725 | 360,689 | ||||||
Other Current Assets | 36,797 | 60,859 | ||||||
Total Current Assets | 1,180,521 | 1,032,232 | ||||||
Property, Plant and Equipment, net | 268,283 | 284,146 | ||||||
Long-Term Insurance Receivable - Asbestos | 171,752 | 208,952 | ||||||
Other Assets | 455,530 | 497,377 | ||||||
Goodwill | 813,792 | 820,824 | ||||||
Total Assets | $ | 2,889,878 | $ | 2,843,531 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 1,123 | $ | 1,112 | ||||
Accounts Payable | 182,731 | 194,158 | ||||||
Current Asbestos Liability | 91,670 | 100,943 | ||||||
Accrued Liabilities | 220,678 | 226,717 | ||||||
Income Taxes | 15,686 | 10,165 | ||||||
Total Current Liabilities | 511,888 | 533,095 | ||||||
Long-Term Debt | 399,092 | 398,914 | ||||||
Long-Term Deferred Tax Liability | 36,853 | 41,668 | ||||||
Long-Term Asbestos Liability | 704,195 | 792,701 | ||||||
Other Liabilities | 310,474 | 255,097 | ||||||
Total Equity | 927,376 | 822,056 | ||||||
Total Liabilities and Equity | $ | 2,889,878 | $ | 2,843,531 | ||||
3
CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income attributable to common shareholders | $ | 45,644 | $ | (125,129 | ) | $ | 216,993 | $ | 26,315 | |||||||
Noncontrolling interest in subsidiaries' earnings | 327 | 324 | 828 | 201 | ||||||||||||
Net income before allocations to noncontrolling interests | 45,971 | (124,805 | ) | 217,821 | 26,516 | |||||||||||
Asbestos Provision | — | 241,647 | — | 241,647 | ||||||||||||
Environmental charge | — | 30,327 | — | 30,327 | ||||||||||||
Gain on divestiture | — | — | (29,445 | ) | (4,258 | ) | ||||||||||
Restructuring - Non Cash | 1,078 | — | 3,855 | — | ||||||||||||
Depreciation and amortization | 14,141 | 15,735 | 57,263 | 62,943 | ||||||||||||
Stock-based compensation expense | 4,459 | 3,840 | 17,319 | 14,972 | ||||||||||||
Defined benefit plans and postretirement expense | 5,321 | 1,959 | 20,090 | 6,770 | ||||||||||||
Deferred income taxes | 30,583 | (66,574 | ) | 55,000 | (43,923 | ) | ||||||||||
Cash provided by (used for) operating working capital | 81,146 | 34,957 | 1,824 | (41,955 | ) | |||||||||||
Defined benefit plans and postretirement contributions | (1,041 | ) | (31,059 | ) | * | (5,504 | ) | (48,113 | ) | |||||||
Environmental payments, net of reimbursements | (2,115 | ) | (799 | ) | (13,371 | ) | (9,534 | ) | ||||||||
Other | (6,134 | ) | (366 | ) | (12,139 | ) | (6,303 | ) | ||||||||
Subtotal | 173,409 | 104,862 | 312,713 | 229,089 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (17,906 | ) | (20,044 | ) | (77,957 | ) | (79,277 | ) | ||||||||
Total provided by operating activities | 155,503 | 84,818 | 234,756 | 149,812 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (9,364 | ) | (7,034 | ) | (29,308 | ) | (34,737 | ) | ||||||||
Proceeds from disposition of capital assets | 4,184 | 73 | 6,438 | 4,793 | ||||||||||||
Payment for acquisition, net of cash acquired | — | (996 | ) | — | (36,590 | ) | ||||||||||
Proceeds from divestiture | 480 | — | 54,079 | 1,000 | ||||||||||||
Total provided by (used for) investing activities | (4,700 | ) | (7,957 | ) | 31,209 | (65,534 | ) | |||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (15,976 | ) | (15,035 | ) | (61,974 | ) | (56,992 | ) | ||||||||
Reacquisition of shares on open market | — | (30,000 | ) | (49,991 | ) | (79,999 | ) | |||||||||
Stock options exercised - net of shares reacquired | 4,630 | 3,295 | 13,056 | 23,232 | ||||||||||||
Excess tax benefit from stock-based compensation | 370 | 391 | 3,603 | 6,097 | ||||||||||||
Change in short-term debt | — | 333 | — | (1,003 | ) | |||||||||||
Total used for financing activities | (10,976 | ) | (41,016 | ) | (95,306 | ) | (108,665 | ) | ||||||||
Effect of exchange rate on cash and cash equivalents | 3,584 | (1,939 | ) | 8,199 | (3,465 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents | 143,411 | 33,906 | 178,858 | (27,852 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 280,536 | 211,183 | 245,089 | 272,941 | ||||||||||||
Cash and cash equivalents at end of period | $ | 423,947 | $ | 245,089 | $ | 423,947 | $ | 245,089 | ||||||||
* Includes a $30 million discretionary pension contribution
4
CRANE CO.
Order Backlog
(in thousands)
December 31, 2012 | September 30, 2012 | June 30, 2012 | March 31, 2012 | December 31, 2011 | |||||||||||||||||
Aerospace & Electronics | $ | 378,152 | $ | 392,862 | $ | 423,282 | $ | 437,822 | $ | 410,794 | |||||||||||
Engineered Materials | 12,689 | 11,357 | 13,884 | 11,129 | 11,110 | ||||||||||||||||
Merchandising Systems | 14,686 | 19,957 | 23,587 | 30,033 | 15,212 | ||||||||||||||||
Fluid Handling | 326,863 | 330,824 | 334,696 | 337,538 | 313,715 | * | |||||||||||||||
Controls | 16,507 | 17,296 | 16,187 | 29,770 | 27,120 | ** | |||||||||||||||
Total Backlog | $ | 748,897 | $ | 772,296 | $ | 811,636 | $ | 846,292 | $ | 777,951 | |||||||||||
* Includes Order Backlog of $2.9 million at March 31, 2012 and $1.9 million at December 31, 2011 pertaining to a business divested in June 2012. | ||||||||
** Includes Order Backlog of $11.3 million at March 31, 2012 and $9.6 million at December 31, 2011 pertaining to a business divested in June 2012. | ||||||||
5
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
Three Months Ended December 31, | Twelve Months Ended December 31, | Percent Change December 31, 2012 | Percent Change December 31, 2012 | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | Three Months | Twelve Months | ||||||||||||||||
INCOME ITEMS | |||||||||||||||||||||
Net Sales | $ | 629,788 | $ | 619,804 | $ | 2,579,068 | $ | 2,500,369 | 1.6 | % | 3.1 | % | |||||||||
Operating Profit (Loss) from Continuing Operations | 76,183 | (194,005 | ) | 310,441 | 36,571 | N/A | 748.9 | % | |||||||||||||
Percentage of Sales | 12.1 | % | (31.3 | )% | 12.0 | % | 1.5 | % | |||||||||||||
Special Items impacting Operating Profit (Loss) from Continuing Operations: | |||||||||||||||||||||
Repositioning Charges (a) | 4,531 | 20,632 | |||||||||||||||||||
Asbestos Provision - Pre-Tax (b) | 241,647 | 241,647 | |||||||||||||||||||
Environmental Provision - Pre-Tax (c) | 30,327 | 30,327 | |||||||||||||||||||
Non-deductible Acquisition Transaction Costs (d) | 3,874 | 3,874 | |||||||||||||||||||
Operating Profit from Continuing Operations before Special Items | $ | 84,588 | $ | 77,969 | $ | 334,947 | $ | 308,545 | 8.5 | % | 8.6 | % | |||||||||
Percentage of Sales | 13.4 | % | 12.6 | % | 13.0 | % | 12.3 | % | |||||||||||||
Net Income (Loss) Attributable to Common Shareholders | $ | 45,644 | $ | (125,129 | ) | $ | 216,993 | $ | 26,315 | ||||||||||||
Per Diluted Share | $ | 0.79 | $ | (2.16 | ) | $ | 3.72 | $ | 0.44 | N/A | 737.5 | % | |||||||||
Special Items impacting Net Income (Loss) Attributable to Common Shareholders: | |||||||||||||||||||||
Repositioning Charges - Net of Tax (a) | 3,896 | 16,724 | |||||||||||||||||||
Per Share | $ | 0.07 | $ | 0.29 | |||||||||||||||||
Asbestos Provision - Net of Tax (b) | 157,071 | 157,071 | |||||||||||||||||||
Per Share | $ | 2.71 | $ | 2.65 | |||||||||||||||||
Environmental Provision - Net ofTax (c) | 19,713 | 19,713 | |||||||||||||||||||
Per Share | $ | 0.34 | $ | 0.33 | |||||||||||||||||
Non-deductible Acquisition Transaction Costs (d) | 3,874 | 3,874 | |||||||||||||||||||
Per Share | $ | 0.07 | $ | 0.07 | |||||||||||||||||
Gain on Divestitures - Net of Tax (e) | (19,176 | ) | |||||||||||||||||||
Per Share | $ | (0.33 | ) | ||||||||||||||||||
Net Income Attributable To Common Shareholders Before Special Items | $ | 53,414 | $ | 51,654 | $ | 218,416 | $ | 203,098 | 3.4 | % | 7.5 | % | |||||||||
Per Diluted Share | $ | 0.92 | $ | 0.88 | $ | 3.75 | $ | 3.43 | 5.3 | % | 9.2 | % | |||||||||
Profit from Discontinued Operations attributable to common shareholders, net of tax (f) | — | (878 | ) | (2,456 | ) | (3,700 | ) | ||||||||||||||
Per Share | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.06 | ) | ||||||||||||
Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations | $ | 53,414 | $ | 50,776 | $ | 215,960 | $ | 199,398 | |||||||||||||
Per Diluted Share | $ | 0.92 | $ | 0.86 | $ | 3.70 | $ | 3.37 | 7.1 | % | 10.0 | % | |||||||||
(a) The Company incurred repositioning charges in the second quarter, third quarter and fourth quarter of 2012, associated with productivity actions. The charges included severance and impairment costs related to the shutdown of certain facilities, the transfer of certain manufacturing operations, staff reduction actions and a pension curtailment charge. | ||||||||||||
(b) During the three months ended December 31, 2011, the Company recorded an Asbestos Provision. | ||||||||||||
(c) During the three months ended December 31, 2011, the Company recorded a charge related to an increase in the Company's expected liability at its Goodyear, AZ Superfund Site. | ||||||||||||
(d) During the three months ended December 31, 2012, the Company recorded non-deductible transaction costs associated with the potential acquisition of MEI. | ||||||||||||
(e) In June 2012, the Company divested of a business within the Fluid Handling segment (Houston Service Center) and a business within the Controls segment (Azonix Corporation). The associated gains were included in the “Gain from Sale of Discontinued Operations attributable to common shareholders, net of tax" section on the accompanying Income Statement Data. In September 2012, the Company recorded a favorable price adjustment associated with the Azonix Corporation divestiture. | ||||||||||||
(f) Amounts represent the after-tax profit from the Houston Service Center and Azonix Corporation businesses divested in June 2012. | ||||||||||||
6
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
CASH FLOW ITEMS | ||||||||||||||||
Cash Provided from Operating Activities | ||||||||||||||||
before Asbestos - Related Payments | $ | 173,409 | $ | 104,862 | $ | 312,713 | $ | 229,089 | ||||||||
Asbestos Related Payments, Net of Insurance Recoveries | (17,906 | ) | (20,044 | ) | (77,957 | ) | (79,277 | ) | ||||||||
Cash Provided from Operating Activities | 155,503 | 84,818 | 234,756 | 149,812 | ||||||||||||
Less: Capital Expenditures | (9,364 | ) | (7,034 | ) | (29,308 | ) | (34,737 | ) | ||||||||
Free Cash Flow | $ | 146,139 | $ | 77,784 | $ | 205,448 | $ | 115,075 | ||||||||
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. | ||||||||||
Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. | ||||||||||
7