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, 2014

CRANE CO.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

1-1657	13-1952290
(Commission File Number)	(IRS 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))

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On January 27, 2014, Crane Co. announced its results of operations for the quarter ended December 31, 2013. Copies of the related press release and quarterly financial data supplement are being furnished as Exhibits 99.1 and 99.2 to this Form 8-K.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, 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, 2013, the Company was 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,	2013		2012		2011
Beginning claims	56,442		58,658		64,839
New claims	2,950		3,542		3,748
Settlements	(1,142	)	(1,030	)	(1,117	)
Dismissals	(6,762	)	(4,919	)	(11,059	)
MARDOC claims*	2		191		2,247
Ending claims	51,490		56,442		58,658

* As of January 1, 2010, the Company was named in 36,448 maritime actions which had been administratively dismissed by the United States District Court for the Eastern District of Pennsylvania ("MARDOC claims"), and therefore were not classified as active claims. In addition, the Company was named in 8 new maritime actions in 2010 (also not classified as active claims). Through December 31, 2013, pursuant to an ongoing review process initiated by the Court, 26,562 claims were permanently dismissed, and 3,393 claims were classified as active, of which 2,980 claims were subsequently dismissed, 225 claims were subsequently settled and 188 claims remain active (and have been added to "Ending claims"). By settlement agreement of December 30, 2013, the Company resolved all of the remaining MARDOC claims with plaintiffs’ counsel.  The agreement will result in the dismissal of all MARDOC claims against the Company.

Of the 51,490 pending claims as of December 31, 2013, approximately 19,000 claims were pending in New York, approximately 9,700 claims were pending in Texas, approximately 5,300 claims were pending in Mississippi, and approximately 600 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.

Substantially all of the claims the Company resolves are either dismissed or concluded through settlements. To date, the Company has paid two judgments arising from adverse jury verdicts in asbestos matters. The first payment, in the amount of $2.54 million, was made on July 14, 2008, approximately two years after the adverse verdict in the Joseph Norris matter in California, after the Company had exhausted all post-trial and appellate remedies. The second payment, in the amount of $0.02 million, was made in June 2009 after an adverse verdict in the Earl Haupt case in Los Angeles, California on April 21, 2009.

The Company has tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court, one of which, the Patrick O’Neil claim in Los Angeles, was reversed on appeal. In an opinion dated January 12, 2012, the California Supreme Court reversed the decision of the Court of Appeal and instructed the trial court to enter a judgment of nonsuit in favor of the defendants.

On March 14, 2008, the Company received an adverse verdict in the James Baccus claim in Philadelphia, Pennsylvania, with compensatory damages of $2.45 million and additional damages of $11.9 million. The Company’s post-trial motions were denied by order dated January 5, 2009. The case was concluded by settlement in the fourth quarter of 2010 during the pendency of the Company’s appeal to the Superior Court of Pennsylvania.

On May 16, 2008, the Company received an adverse verdict in the Chief Brewer claim in Los Angeles, California. The amount of the judgment entered was $0.68 million plus interest and costs. The Company pursued an appeal in this matter, and on August 2, 2012 the California Court of Appeal reversed the judgment and remanded the matter to the trial court for entry of judgment notwithstanding the verdict in favor of the Company on the ground that this claim could not be distinguished factually from the Patrick O'Neil case decided in the Company's favor by the California Supreme Court. 

On February 2, 2009, the Company received an adverse verdict in the Dennis Woodard claim in Los Angeles, California. The jury found that the Company was responsible for one-half of one percent (0.5%) of plaintiffs’ damages of $16.93 million; however, based on California court rules regarding allocation of damages, judgment was entered against the Company in the amount of $1.65 million, plus costs. Following entry of judgment, the Company filed a motion with the trial court requesting judgment in the Company’s favor notwithstanding the jury’s verdict, and on June 30, 2009, the court advised that the

Company’s motion was granted and judgment was entered in favor of the Company. The trial court’s ruling was affirmed on appeal by order dated August 25, 2011. The plaintiffs appealed that ruling to the Supreme Court of California, which dismissed the appeal on February 29, 2012; the matter is now finally determined in the Company’s favor.

On March 23, 2010, a Philadelphia, Pennsylvania, state court jury found the Company responsible for a 1/11th share of a $14.5 million verdict in the James Nelson claim, and for a 1/20th share of a $3.5 million verdict in the Larry Bell claim. On February 23, 2011, the court entered judgment on the verdicts in the amount of $0.2 million against the Company, only, in Bell, and in the amount of $4.0 million, jointly, against the Company and two other defendants in Nelson, with additional interest in the amount of $0.01 million being assessed against the Company, only, in Nelson. All defendants, including the Company, and the plaintiffs took timely appeals of certain aspects of those judgments.  The Company resolved the Bell appeal by settlement, which is reflected in the settled claims for 2012. 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 have requested a rehearing in the Superior Court, which the defendants, including the Company, have opposed. By order dated November 18, 2013, the Superior Court vacated the panel opinion, and granted en banc reargument at a date to be scheduled.

On August 17, 2011, a New York City state court jury found the Company responsible for a 99% share of a $32 million verdict on the Ronald Dummitt claim. The Company filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which the Company argued were excessive under New York appellate case law governing awards for non-economic losses. The Court held oral argument on these motions on October 18, 2011 and issued a written decision on August 21, 2012 confirming the jury's liability findings but reducing the award of damages to $8 million.  At plaintiffs' request, the Court entered a judgment in the amount of $4.9 million against the Company, taking into account settlement offsets and accrued interest under New York law.  The Company has appealed.

On March 9, 2012, a Philadelphia, Pennsylvania, state court jury found the Company responsible for a 1/8th share of a $123,000 verdict in the Frank Paasch claim. The Company and plaintiffs filed post-trial motions. On May 31, 2012, on plaintiffs’ motion, the Court entered an order dismissing the claim against the Company, with prejudice, and without any payment.

On August 29, 2012, the Company received an adverse verdict in the William Paulus claim in Los Angeles, California. The jury found that the Company was responsible for ten percent (10%), of plaintiffs' non-economic damages of $6.5 million, plus a portion of plaintiffs' economic damages of $0.4 million. Based on California court rules regarding allocation of damages, judgment was entered in the amount of $0.8 million against the Company.  The Company filed post-trial motions requesting judgment in the Company's favor notwithstanding the jury's verdict, which were denied. The Company has appealed.

On October 23, 2012, the Company received an adverse verdict in the Gerald Suttner claim in Buffalo, New York. The jury found that the Company was responsible for four percent (4%) of plaintiffs' damages of $3 million.  The Company filed post-trial motions requesting judgment in the Company's favor notwithstanding the jury's verdict, which were denied.  The court entered a judgment of $0.1 million against the Company. The Company has appealed.

On November 28, 2012, the Company received an adverse verdict in the James Hellam claim in Oakland, CA.  The jury found that the Company was responsible for seven percent (7%) of plaintiffs' non-economic damages of $4.5 million, plus a portion of their economic damages of $0.9 million.  Based on California court rules regarding allocation of damages, judgment was entered against the Company in the amount of $1.282 million.  The Company filed post-trial motions requesting judgment in the Company's favor notwithstanding the jury's verdict and also requesting that settlement offsets be applied to reduce the judgment in accordance with California law.  On January 31, 2013, the court entered an order disposing partially of that motion. On March 1, 2013, the Company filed an appeal regarding the portions of the motion that were denied. The court entered judgment against the Company in the amount of $1.1 million. The Company appealed.

On February 25, 2013, a Philadelphia, Pennsylvania, state court jury found the Company 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.   The Company filed post-trial motions requesting judgments in the Company's 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.  The Company has appealed.

On March 1, 2013, a New York City state court jury entered a $35 million verdict against the Company in the Ivo Peraica claim. The Company filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which the Company argues were 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 the Company’s post-trial motion, judgment also entered against the Company in the amount of $10.6 million (including interest). The Company has appealed. The Company has taken a separate appeal of the trial court’s denial of its summary judgment motion.

On July 31, 2013, a Buffalo, New York state court jury entered a $3.1 million verdict against the Company in the Lee Holdsworth  claim.  The Company plans to file post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which the Company argues were excessive under New York appellate case law governing awards for non-economic losses and further were subject to settlement offsets.  Plaintiffs have requested judgment in the amount of $1.1 million. Post-trial motions remain pending. The Company plans to pursue an appeal if necessary.

On September 11, 2013, a Columbia, South Carolina state court jury in the Lloyd Garvin claim entered an $11 million verdict for compensatory damages against the Company and two other defendants jointly, and also awarded exemplary damages against the Company in the amount of $11 million.  The jury also awarded exemplary damages against both other defendants.  The Company has filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages. The Company plans to pursue an appeal if necessary.

On September 17, 2013, a Fort Lauderdale, Florida state court jury in the Richard DeLisle claim found the Company responsible for 16 percent of an $8 million verdict.  The trial court denied all parties’ post-trial motions, and entered judgment against the Company in the amount of $1.3 million. The Company has appealed.

Such judgment amounts are not included in the Company's 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) for the Company for the years ended December 31, 2013, 2012 and 2011 totaled $90.8 million, $96.1 million and $105.5 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 quarter to quarter. Cash payments of settlement amounts are not made until all releases and other required documentation are received by the Company, 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. The Company’s total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the years ended December 31, 2013, 2012 and 2011 totaled $62.8 million, $78.0 million and $79.3 million, respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions) For the year ended December 31,	2013			2012			2011
Settlement / indemnity costs incurred (1)	$	31.6		$	37.5		$	50.2
Defense costs incurred (1)	59.1			58.7			55.3
Total costs incurred	$	90.8		$	96.1		$	105.5
Settlement / indemnity payments	$	37.8		$	38.0		$	55.0
Defense payments	59.5			59.8			56.5
Insurance receipts	(34.5		)	(19.8		)	(32.2		)
Pre-tax cash payments	$	62.8		$	78.0		$	79.3

(1) Before insurance recoveries and tax effects.

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

Cumulatively through December 31, 2013, the Company has resolved (by settlement or dismissal) approximately 100,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $399 million, for an average settlement cost per resolved claim of approximately $4,000. The average settlement cost per claim resolved during the years ended December 31, 2013, 2012 and 2011 was $3,300, $6,300 and $4,123 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 the Company’s periodic review of its estimated asbestos liability. For a discussion regarding the four most significant factors affecting the liability estimate, see “Effects on the Condensed Consolidated Financial Statements”.

Effects on the Condensed Consolidated Financial Statements

The Company has retained the firm of Hamilton, Rabinovitz & Associates, Inc. (“HR&A”), a nationally recognized expert in the field, to assist management in estimating the Company’s asbestos liability in the tort system. HR&A reviews information provided by the Company 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 HR&A to project future asbestos costs is based largely on the Company’s experience during a base reference period of eleven quarterly periods (consisting of the two full preceding calendar years and three additional quarterly periods to the estimate date) for claims filed, settled and dismissed. The Company’s experience is then compared to the results of widely used previously conducted epidemiological studies estimating the number of individuals likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, HR&A estimates the number of future claims that would be filed against the Company 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 the Company, HR&A augments its liability estimate for the costs of defending asbestos claims in the tort system using a forecast from the Company which is based upon discussions with its defense counsel. Based on this information, HR&A compiles an estimate of the Company’s asbestos liability for pending and future claims, based on claim experience during the reference period 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 the Company, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against the Company and (4) the aggregate defense costs incurred by the Company. These factors are interdependent, and no one factor predominates in determining the liability estimate. Although the methodology used by HR&A can be applied to show claims and costs for periods subsequent to the indicated period (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of uncertainty regarding the various factors used in estimating future asbestos costs is too great to provide for reasonable estimation of the number of future claims, the nature of such claims or the cost to resolve them for years beyond the indicated estimate.

In the Company’s 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 over the past five to ten years 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 are 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 the Company’s asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, the Company’s management continues to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.

Each quarter, HR&A compiles an update based upon the Company’s experience in claims filed, settled and dismissed during the updated reference period (consisting of the preceding eleven quarterly periods) as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis) during that period. In addition to this claims experience, the Company also considers 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, the Company also takes into account trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of HR&A and determines whether a change in the estimate is warranted.

Liability Estimate. With the assistance of HR&A, effective as of December 31, 2011, the Company updated and extended its estimate of the asbestos liability, including the costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against the Company through 2021. The Company’s previous estimate was for asbestos claims filed or projected to be filed through 2017. As a result of this updated estimate, the Company recorded an additional liability of $285 million as of December 31, 2011. The Company’s decision to take this action at such date was based on several factors which contribute to the Company’s ability to reasonably estimate this liability for the additional period noted. First, the number of mesothelioma claims (which although constituting approximately 8% of the Company’s total pending asbestos claims, have accounted for approximately 90% of the Company’s aggregate settlement and defense costs) being filed against the Company and associated settlement costs have recently stabilized. In the Company’s opinion, the outlook for mesothelioma claims expected to be filed and resolved in the forecast period is reasonably stable. Second, there

have been favorable developments in the trend of case law which has been a contributing factor in stabilizing the asbestos claims activity and related settlement costs. Third, there have been significant actions taken by certain state legislatures and courts over the past several years that have reduced the number and types of claims that can proceed to trial, which has been a significant factor in stabilizing the asbestos claims activity. Fourth, the Company has now entered into coverage-in-place agreements with almost all of its excess insurers, which enables the Company to project a more stable relationship between settlement and defense costs paid by the Company and reimbursements from its insurers. Taking all of these factors into account, the Company believes that it can reasonably estimate the asbestos liability for pending claims and future claims to be filed through 2021. While it is probable that the Company will incur additional charges for asbestos liabilities and defense costs in excess of the amounts currently provided, the Company does not believe that any such amount can be reasonably estimated beyond 2021. Accordingly, no accrual has been recorded for any costs which may be incurred for claims which may be made subsequent to 2021.

Management has made its best estimate of the costs through 2021 based on the analysis by HR&A completed in January 2012. Through December 31, 2013, the Company’s actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in the Company’s liability estimate. In addition to this claims experience, the Company considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, the Company determined that no change in the estimate was warranted for the period ended December 31, 2013. Nevertheless, if certain factors show a pattern of sustained increase or decrease, the liability could change materially; however, all the assumptions used in estimating the asbestos liability are interdependent and no single factor predominates in determining the liability estimate. Because of the uncertainty with regard to and the interdependency of such factors used in the calculation of its asbestos liability, and since no one factor predominates, the Company believes that a range of potential liability estimates beyond the indicated forecast period cannot be reasonably estimated.

A liability of $894 million was recorded as of December 31, 2011 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2021, of which approximately 80% is attributable to settlement and defense costs for future claims projected to be filed through 2021. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $699 million as of December 31, 2013. 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 2021, 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, 2013 was $88 million and represents the Company’s best estimate of total asbestos costs expected to be paid during the twelve-month period. Such amount is based upon the HR&A model together with the Company’s prior year payment experience for both settlement and defense costs.

Insurance Coverage and Receivables.Prior to 2005, a significant portion of the Company’s settlement and defense costs were paid by its primary insurers. With the exhaustion of that primary coverage, the Company began negotiations with its excess insurers to reimburse the Company for a portion of its settlement and/or defense costs as incurred. To date, the Company has entered into agreements providing for such reimbursements, known as “coverage-in-place”, with eleven of its excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for the Company’s present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. Similarly, under a variant of coverage-in-place, the Company has 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 the Company based on aggregate indemnity and defense payments made. In addition, with ten of its excess insurer groups, the Company entered into policy buyout 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 of these agreements include provisions for mutual releases, indemnification of the insurer and, for coverage-in-place, claims handling procedures. With the agreements referenced above, the Company has concluded settlements with all but one of its solvent excess insurers whose policies are expected to respond to the aggregate costs included in the updated liability estimate. That insurer, which issued a single applicable policy, has been paying the shares of defense and indemnity costs the Company has allocated to it, subject to a reservation of rights. There are no pending legal proceedings between the Company and any insurer contesting the Company’s asbestos claims under its insurance policies.

In conjunction with developing the aggregate liability estimate referenced above, the Company also developed an estimate of probable insurance recoveries for its asbestos liabilities. In developing this estimate, the Company considered its coverage-in-place and other settlement agreements described above, as well as 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, the timing and amount of reimbursements will vary because the Company’s 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, the Company 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 the Company’s legal counsel, and incorporating risk mitigation judgments by the Company where policy terms or other factors were not certain, the Company’s insurance consultants compiled a model indicating how the Company’s historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and the Company. Using the estimated liability as of December 31, 2011 (for claims filed or expected to be filed through 2021), the insurance consultant’s model forecasted that approximately 25% of the liability would be reimbursed by the Company’s insurers. While there are overall limits on the aggregate amount of insurance available to the Company with respect to asbestos claims, those overall limits were not reached by the total estimated liability currently recorded by the Company, and such overall limits did not influence the Company in its determination of the asset amount to record. The proportion of the asbestos liability that is allocated to certain insurance coverage years, however, exceeds the limits of available insurance in those years. The Company allocates to itself the amount of the asbestos liability (for claims filed or expected to be filed through 2021) that is in excess of available insurance coverage allocated to such years. An asset of $225 million was recorded as of December 31, 2011 representing the probable insurance reimbursement for such claims expected through 2021. The asset is reduced as reimbursements and other payments from insurers are received. The asset was $171 million as of December 31, 2013.

The Company reviews the aforementioned estimated reimbursement rate with its insurance consultants on a periodic basis in order to confirm its overall consistency with the Company’s 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 policy buyout agreements. Since December 2011, there have been no developments that have caused the Company to change the estimated 25% rate, although actual insurance reimbursements vary from period to period, and will decline over time, for the reasons cited above.

Uncertainties. Estimation of the Company’s 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. The Company cautions that its 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. 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 the Company’s rights under its insurance policies or settlement agreements.

Many uncertainties exist surrounding asbestos litigation, and the Company will continue to evaluate its 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 the Company 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; however, the Company is currently unable to estimate such future changes and, accordingly, while it is probable that the Company will incur additional charges for asbestos liabilities and defense costs in excess of the amounts currently provided, the Company does not believe that any such amount can be reasonably determined beyond 2021. Although the resolution of these claims may 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.

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, 2014, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 2013

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, 2014
	By:	/s/ Richard A. Maue
		Richard A. Maue
		Vice President - Finance
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release dated January 27, 2014, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 2013

EX-99.1

	Exhibit 99.1
Crane Co.	News
	Contact:
	Richard E. Koch
	Director, Investor Relations
	and Corporate Communications
	203-363-7352
	www.craneco.com

Crane Co. Reports Fourth Quarter Results

Provides 2014 EPS Guidance of $4.55-$4.75, Excluding Special Items

STAMFORD, CONNECTICUT - January 27, 2014 -Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported fourth quarter 2013 earnings of $0.84 per diluted share, compared to $0.79 per share in the fourth quarter of 2012. Fourth quarter 2013 results included after-tax transaction-related costs, net, of $11.9 million, or $0.20 per share, related to the recent acquisition of MEI Conlux Holdings. Fourth quarter 2012 results included after-tax charges of $3.9 million, or $0.07 per share, associated with transaction-related costs associated with the MEI acquisition, and $3.9 million, or $0.07 per share, of repositioning charges. Excluding Special Items in both years, fourth quarter 2013 earnings per diluted share increased 13% to $1.04, compared to $0.92 in the fourth quarter of 2012. Fourth quarter 2013 earnings included $0.02 per share related to the operating results of MEI. (Please see the attached Non-GAAP Financial Measures table.)

Fourth quarter 2013 sales of $681.4 million increased $51.7 million, or 8.2%, compared to $629.8 million in the fourth quarter of 2012, resulting from a core sales increase of $28.2 million (4.5%), sales from the MEI acquisition of $25.2 million (4.0%), and unfavorable foreign exchange of $1.7 million (0.3%).

1

Operating profit in the fourth quarter increased 9.1% to $83.1 million, compared to $76.2 million in the fourth quarter of 2012. Excluding Special Items, fourth quarter operating profit increased 15.8% to $97.9 million, compared to $84.6 million in the fourth quarter of 2012, and operating profit margin increased to 14.4%, compared to 13.4% in the fourth quarter of 2012. (Please see the attached Non-GAAP Financial Measures table.)

Full Year 2013 Results

Total sales in 2013 were $2.60 billion, an increase of 0.6% from $2.58 billion in 2012, reflecting $25.2 million (1.0%) from the acquisition of MEI, partially offset by unfavorable foreign currency translation of $11.3 million (0.4%).

Operating profit for the full year 2013 was $347.9 million, compared to $310.4 million in 2012. Excluding Special Items, 2013 operating profit increased 12.0% to $375.3 million, compared to $334.9 million in 2012, and operating profit margin increased to 14.5%, compared to 13.0% in 2012.

Full year 2013 earnings per diluted share were $3.73, compared to $3.72 per share in 2012. Excluding Special Items, 2013 earnings per diluted share increased 12.7% to $4.18 (including $0.02 per share from MEI), compared to $3.70 per share in 2012. (Please see the attached Non-GAAP Financial Measures table.) Order backlog was $762 million at December 31, 2013 (including $32 million related to MEI) compared to $749 million at December 31, 2012.

“We are pleased to report record full year EPS of $4.18 per share, excluding Special Items, which was in line with our most recent guidance” said Crane Co. chief executive officer, Eric C. Fast. “In

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spite of a difficult revenue environment, our adjusted full year operating margin was a record 14.5%, a substantial improvement over 13.0% in 2012 and 12.3% in 2011.”

Max Mitchell, President and Chief Operating Officer said, “In 2014, we are expecting our fourth consecutive year of record earnings, continued margin expansion and strong free cash flow. We enter the year having completed the acquisition of MEI, a business with highly innovative, complementary products that further strengthens our portfolio. In addition to unlocking significant synergies, the integration brings together MEI with our legacy Crane Payment Solutions team to create Crane Payment Innovations, a business that delivers highly engineered solutions and unparalleled customer service across attractive end markets.”

Cash Flow and Financial Position

Cash provided by operating activities in the fourth quarter of 2013 was $148.4 million, compared to $155.5 million in the fourth quarter of 2012. Free cash flow (cash provided by operating activities less capital spending) for the fourth quarter of 2013 was $138.0 million, compared to $146.1 million in the fourth quarter of 2012. For the twelve months ended December 31, 2013, cash provided by operating activities was $239.4 million, compared to $234.8 million in 2012. Free cash flow for the full year 2013 was $210 million, compared to $205 million in the prior year. The Company’s cash position was $270.6 million at December 31, 2013, compared to $423.9 million at December 31, 2012. The reduction in cash was driven by the acquisition of the outstanding equity interests of MEI Conlux Holding (U.S.), Inc. and its affiliate MEI Conlux Holdings (Japan), Inc. In connection with the acquisition, the Company issued $250 million of 2.750% Senior Notes due 2018 and $300 million of 4.450% Senior Notes due 2023.

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Segment Results

All comparisons detailed in this section refer to operating results for the fourth quarter 2013 versus the fourth quarter 2012. Beginning in the first quarter 2013, the operating results of the former Controls segment have been included in the Fluid Handling segment. Prior period amounts have been restated for comparative purposes.

Aerospace & Electronics

	Fourth Quarter						Change
(dollars in millions)	2013			2012
Sales	$	186.7		$	176.1		$	10.7	6.1	%
Operating Profit	$	44.7		$	39.2		$	5.5	14.1	%
Profit Margin	23.9		%	22.3		%

Fourth quarter 2013 sales increased $10.7 million, or 6.1%, reflecting sales increases of $5.5 million (4.9%) in the Aerospace Group and $5.2 million (8.0%) in the Electronics Group. The Aerospace Group sales increase reflected stronger commercial OEM and aftermarket sales activity. The increase in Electronics Group sales was driven primarily by higher shipments of Power and Microwave products. Segment operating profit improved 14%, with improved operating profit and margin in both businesses. Aerospace & Electronics order backlog was $361 million at December 31, 2013, compared to $378 million at December 31, 2012. The decline in backlog reflects lower defense related orders.

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Engineered Materials

	Fourth Quarter						Change
(dollars in millions)	2013			2012
Sales	$	52.4		$	46.9		$	5.5	11.7	%
Operating Profit	$	5.8		$	3.3		$	2.5	73.7	%
Operating Profit, before Special Items*	$	5.8		$	4.7		$	1.1	24.3	%
Profit Margin	11.1		%	7.1		%
Profit Margin, before Special Items*	11.1		%	10.0		%
*Repositioning charges of $1.4 million in 2012 primarily associated with the closure of a manufacturing facility.

Segment sales of $52.4 million were 11.7% higher than the fourth quarter of 2012, driven by higher sales to recreational vehicle equipment manufacturers. Excluding Special Items, operating profit increased 24% to $5.8 million, and margins increased from 10.0% to 11.1%, reflecting the impact of the higher sales.

Merchandising Systems

	Fourth Quarter						Change
(dollars in millions)	2013			2012
Sales	$	122.6		$	94.2		$	28.5		30.3	%
Operating Profit	$	7.9		$	10.4		$	(2.5	)	(24.2	)%
Operating Profit, before Special Items*	$	13.7		$	11.8		$	1.9		15.8	%
Profit Margin	6.5		%	11.1		%
Profit Margin, before Special Items*	11.2		%	12.6		%
* Excludes $1.4 million of repositioning charges in Q4'12 related to facility exit costs, and $5.8 million in Q4'13 primarily related to inventory and backlog step-up charges associated with the acquisition of MEI (please see Non-GAAP table for details).

Merchandising Systems sales of $122.6 million increased $28.5 million, or 30%, driven by $25.2 million of sales related to the acquisition of MEI, coupled with higher sales from our Payment Solutions business. Vending Solutions sales were flat compared to last year. Excluding Special Items, operating profit increased in the quarter, reflecting strong performance in Payment Solutions and

5

profit attributable to the acquisition of MEI, partially offset by lower operating profit in Vending Solutions.

Fluid Handling

	Fourth Quarter						Change
(dollars in millions)	2013			2012
Sales	$	319.7		$	312.6		$	7.1	2.3	%
Operating Profit	$	48.2		$	41.5		$	6.6	16.0	%
Operating Profit, before Special Items*	$	48.2		$	42.9		$	5.3	12.3	%
Profit Margin	15.1		%	13.3		%
Profit Margin, before Special Items*	15.1		%	13.7		%
*Repositioning charges of $1.4 million in 2012 primarily associated with transferring certain European production to lower cost Company facilities.

Fourth quarter 2013 sales increased $7.1 million, or 2.3%, which included a core sales increase of $8.4 million (2.7%), and unfavorable foreign exchange of $1.3 million (0.4%). The segment sales increase was primarily driven by higher sales for process valves, partially offset by lower commercial valve volume in Canada, reflecting soft commercial construction end markets in that region. Excluding Special Items, segment operating margin increased from 13.7% to 15.1%, reflecting strengthening volume, continued operational execution, productivity gains and savings associated with the repositioning actions taken in 2012. Fluid Handling order backlog was $334 million at December 31, 2013, compared to $343 million at December 31, 2012. The lower backlog is driven by the timing of nuclear project based services.

2014 Guidance

Sales for 2014 are expected to be $3.0 billion, driven by a core sales increase of 1% - 3% and the impact of the MEI acquisition. Our 2014 earnings guidance is a range of $4.55 - $4.75 per diluted share, excluding Special Items as described below.This guidance reflects accretion of $0.20 per

6

share contributed from the MEI acquisition (including $0.07 of synergies). On a comparable basis, 2013 earnings per share were $4.18. In connection with the recent acquisition of MEI, the Company expects to incur transaction and integration related costs, and inventory step up and backlog amortization charges in a range of $18 to $21 million. In addition, as part of ongoing efforts to continue to drive margin expansion, the Company expects modest facility repositioning actions relating to consolidation of certain smaller manufacturing sites. Associated costs are expected to be in the range of $10 to $13 million and are expected to be partially offset by gains from sales of certain real estate. Savings associated with these actions will approximate $5 million in 2015 and $10 million on an annual basis beginning in 2016. Including the aforementioned Special Items, our 2014 earnings guidance on a GAAP basis is $4.28 - $4.48 per diluted share. (Please see non-GAAP table for details.) Full year 2014 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $225 to $250 million.

Segment-specific sales and operating profit guidance will be provided at the Company’s Investor Day conference on February 27, 2014.

Additional Information

Please see the Non-GAAP Financial Measures table attached to this press release for supporting details. 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, 2014 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the

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call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.

Crane Co. Investor Day

The Company will hold its annual Investor Day conference on Thursday, February 27, in New York City from 8:30 am to noon and will be available on the web at www.craneco.com.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has four business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, and Fluid Handling. Crane has approximately 11,000 employees in North America, South America, Europe, 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 present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. 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 the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2014-2

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EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2013			2012			2013			2012
Net Sales:
Aerospace & Electronics	$	186,737		$	176,081		$	693,783		$	701,208
Engineered Materials	52,365			46,900			232,298			216,503
Merchandising Systems	122,649			94,160			380,576			371,901
Fluid Handling	319,698			312,647			1,288,624			1,289,456
Total Net Sales	$	681,449		$	629,788		$	2,595,281		$	2,579,068
Operating Profit (Loss) from Continuing Operations:
Aerospace & Electronics	$	44,719		$	39,181		$	159,976		$	156,015
Engineered Materials	5,809			3,344			34,347			24,522
Merchandising Systems	7,920			10,447			34,822			33,771
Fluid Handling	48,191			41,547			194,879			160,980
Corporate	(23,518		)	(18,336		)	(76,148		)	(64,847		)
Total Operating Profit from Continuing Operations	83,121			76,183			347,876			310,441
Interest Income	379			587			1,867			1,879
Interest Expense	(5,809		)	(6,717		)	(26,460		)	(26,831		)
Miscellaneous- Net	2,903			(181		)	2,733			(884		)
Income from Continuing Operations Before Income Taxes	80,594			69,872			326,016			284,605
Provision for Income Taxes	30,482			23,901			105,065			88,416
Income from Continuing Operations	50,112			45,971			220,951			196,189
Profit from Discontinued Operations attributable to common shareholders	—			—			—			3,777
Gain from Sales of Discontinued Operations attributable to common shareholders	—			—			—			29.445
Profit from Discontinued Operations attributable to common shareholders, net of tax	—			—			—			2,456
Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax	—			—			—			19,176
Gain / Profit from Discontinued Operations, net of tax	—			—			—			21,632
Net income before allocation to noncontrolling interests	50,112			45,971			220,951			217,821
Less: Noncontrolling interest in subsidiaries' earnings	406			327			1,449			828
Net income attributable to common shareholders	$	49,706		$	45,644		$	219,502		$	216,993
Share Data:
Earnings per share from Continuing Operations	$	0.84		$	0.79		$	3.73		$	3.35
Earnings per share from Discontinued Operations	—			—			—			0.37
Earnings per Diluted Share (a)	$	0.84		$	0.79		$	3.73		$	3.72

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Average Diluted Shares Outstanding	59,156		57,783		58,839		58,293
Average Basic Shares Outstanding	58,161		57,008		57,896		57,443
Supplemental Data:
Cost of Sales	$	454,598	$	417,569	$	1,711,759	$	1,708,240
Selling, General & Administrative	143,730		131,505		535,646		539,755
Repositioning Charges	—		4,531		—		20,632
Depreciation and Amortization *	16,678		14,141		54,837		57,263
Stock-Based Compensation Expense	6,492		4,459		22,791		17,319

* Amount included within cost of sales and selling, general & administrative costs.

(a) Earnings per share amounts may not add due to rounding

2

CRANE CO.

Condensed Balance Sheets

(in thousands)

	December 31, 2013		December 31, 2012
ASSETS
Current Assets
Cash and Cash Equivalents	$	270,643	$	423,947
Accounts Receivable, net	437,541		333,330
Current Insurance Receivable - Asbestos	22,783		33,722
Inventories, net	368,886		352,725
Other Current Assets	30,295		36,797
Total Current Assets	1,130,148		1,180,521
Property, Plant and Equipment, net	305,055		268,283
Long-Term Insurance Receivable - Asbestos	148,222		171,752
Other Assets	692,345		455,530
Goodwill	1,279,689		813,792
Total Assets	$	3,555,459	$	2,889,878
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	125,826	$	1,123
Accounts Payable	229,829		182,731
Current Asbestos Liability	88,038		91,670
Accrued Liabilities	223,172		220,678
Income Taxes	2,062		15,686
Total Current Liabilities	668,927		511,888
Long-Term Debt	744,693		399,092
Long-Term Deferred Tax Liability	76,347		36,853
Long-Term Asbestos Liability	610,530		704,195
Other Liabilities	238,289		310,474
Total Equity	1,216,673		927,376
Total Liabilities and Equity	$	3,555,459	$	2,889,878

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CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2013			2012			2013			2012
Operating Activities:
Net income attributable to common shareholders	$	49,706		$	45,644		$	219,502		$	216,993
Noncontrolling interest in subsidiaries' earnings	406			327			1,449			828
Net income before allocations to noncontrolling interests	50,112			45,971			220,951			217,821
Gain on divestiture	(2,727		)	—			(2,727		)	(29,445		)
Restructuring - Non Cash	—			1,078			—			3,855
Depreciation and amortization	16,678			14,141			54,837			57,263
Stock-based compensation expense	6,492			4,459			22,791			17,319
Defined benefit plans and postretirement expense	1,240			5,321			4,779			20,090
Deferred income taxes	37,556			30,583			55,680			55,000
Cash provided by (used for) operating working capital	66,850			81,146			(21,958		)	1,824
Defined benefit plans and postretirement contributions	(2,744		)	(1,041		)	(15,929		)	(5,504		)
Environmental payments, net of reimbursements	(4,201		)	(2,115		)	(15,403		)	(13,371		)
Other	(6,311		)	(6,134		)	(763		)	(12,139		)
Subtotal	162,945			173,409			302,258			312,713
Asbestos related payments, net of insurance recoveries	(14,513		)	(17,906		)	(62,827		)	(77,957		)
Total provided by operating activities	148,432			155,503			239,431			234,756
Investing Activities:
Capital expenditures	(10,444		)	(9,364		)	(29,460		)	(29,308		)
Proceeds from disposition of capital assets	83			4,184			455			6,438
Payment for acquisition, net of cash acquired	(801,781		)	—			(801,781		)	—
Proceeds from divestiture	6,836			480			6,836			54,079
Total (used for) provided by investing activities	(805,306		)	(4,700		)	(823,950		)	31,209
Financing Activities:
Dividends paid	(17,494		)	(15,976		)	(67,272		)	(61,974		)
Reacquisition of shares on open market	—			—			—			(49,991		)
Stock options exercised - net of shares reacquired	839			4,630			24,922			13,056
Excess tax benefit from stock-based compensation	566			370			6,353			3,603
Change in short-term debt	1,482			—			124,679			—
New Debt	543,994			—			543,994			—
Repayment of long-term debt	—			—			(200,000		)	—
Total provided by (used for) financing activities	529,387			(10,976		)	432,676			(95,306		)
Effect of exchange rate on cash and cash equivalents	(5,274		)	3,584			(1,461		)	8,199
Increase (decrease) in cash and cash equivalents	(132,761		)	143,411			(153,304		)	178,858
Cash and cash equivalents at beginning of period	403,404			280,536			423,947			245,089
Cash and cash equivalents at end of period	$	270,643		$	423,947		$	270,643		$	423,947

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CRANE CO.

Order Backlog

(in thousands)

	December 31, 2013			September 30, 2013		June 30, 2013		March 31, 2013		December 31, 2012
Aerospace & Electronics	$	361,323		$	381,830	$	403,400	$	397,518	$	378,152
Engineered Materials	14,661			12,572		14,122		16,138		12,689
Merchandising Systems	51,888		*	23,901		25,641		21,399		14,686
Fluid Handling	333,860			355,192		349,545		365,231		343,370
Total Backlog	$	761,732		$	773,495	$	792,708	$	800,286	$	748,897

* Includes 31.9 million of backlog pertaining to the MEI/Conlux business acquired in December 2013.

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CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,						Percent Change December 31, 2013		Percent Change December 31, 2013
	2013			2012			2013			2012			Three Months		Twelve Months
INCOME ITEMS
Net Sales	$	681,449		$	629,788		$	2,595,281		$	2,579,068		8.2	%	0.6	%
Operating Profit from Continuing Operations	83,121			76,183			347,876			310,441			9.1	%	12.1	%
Percentage of Sales	12.2		%	12.1		%	13.4		%	12.0		%
Special Items impacting Operating Profit from Continuing Operations:
Acquisition Transaction Costs (a)	10,170			3,874			22,765			3,874
Acquisition related inventory and backlog amortization (b)	4,654						4,654
Repositioning Charges (c)				4,531						20,632
Operating Profit from Continuing Operations before Special Items	$	97,945		$	84,588		$	375,295		$	334,947		15.8	%	12.0	%
Percentage of Sales	14.4		%	13.4		%	14.5		%	13.0		%
Net Income Attributable to Common Shareholders	$	49,706		$	45,644		$	219,502		$	216,993
Per Share	$	0.84		$	0.79		$	3.73		$	3.72		6.4	%	0.2	%
Special Items impacting Net Income Attributable to Common Shareholders:
Acquisition Transaction Costs - Net of Tax (a)	9,837			3,874			22,432			$	3,874
Per Share	$	0.17		$	0.07		$	0.38		0.07
Acquisition related inventory and backlog amortization - Net of Tax (b)	2,839						2,839
Per Share	0.05						0.05
Repositioning Charges - Net of Tax (c)				3,896						16,724
Per Share				$	0.07					$	0.29
Withholding taxes related to acquisition funding (d)	1,192						2,892
Per Share	$	0.02					$	0.05
Acquisition remedy related gain on sale of product line - Net of Tax (e)	(2,006		)				(2,006		)
Per Share	(0.03		)				$	(0.03	)
Gain on Divestitures - Net of Tax (f)										$	(19,176	)
Per Share										$	(0.33	)
Net Income Attributable To Common Shareholders Before Special Items	$	61,568		$	53,414		$	245,659		$	218,416		15.3	%	12.5	%
Per Share	$	1.04		$	0.92		$	4.18		$	3.75		12.6	%	11.4	%
Profit from Discontinued Operations attributable to common shareholders, net of tax	—			—			—			(2,456		)
Per Share										$	(0.04	)
Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations	$	61,568		$	53,414		$	245,659		$	215,960
Per Share	$	1.04		$	0.92		$	4.18		$	3.70		12.6	%	12.7	%

6

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2013		2012		2013		2012
Adjusted EBITDA Schedule (Non-GAAP)
Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations	$	61,568	$	53,414	$	245,659	$	218,416
Interest, Net	5,430		6,130		24,593		24,952
Provision for Income Taxes	30,717		23,901		103,600		88,416
Depreciation and Amortization	16,678		14,141		54,837		57,263
Stock Based Compensation	6,492		4,459		22,791		17,319
Adjusted EBITDA from Continuing Operations (Non-GAAP)	$	120,885	$	102,045	$	451,480	$	406,366	18.5	%	11.1	%

(a) During the three and twelve months ended December 31, 2013, the Company recorded transaction costs associated with the potential acquisition of MEI/Conlux.

(b) During the three months ended December 31, 2013, the Company recorded inventory step-up and backlog amortization relating to the acquisition of MEI/Conlux.

(c) The Company incurred repositioning charges in the three and twelve months ended December 31, 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, and staff reduction actions.

(d) In the three and twelve months ended December 31, 2013, the Company incurred withholding taxes related to cash marshalling activities supporting the acquisition of MEI/Conlux

(e) In December 2013, the Company divested a product line within the Merchandising Systems segment pertaining to the execution of remedies associated with the MEI/Conlux acquisition.

(f) In June 2012, the Company divested a business within the Fluid Handling segment and a business within the Controls segment. 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.

	2014 Full Year Guidance
2014 Earnings Per Share Guidance	Low		High
Earnings Per Share - GAAP basis	$	4.28	$	4.48
Acquisition integration costs, inventory step-up and backlog amortization - Net of Tax (g)	0.22		0.22
Anticipated facility repositioning actions, net of real estate divestiture gains - Net of Tax (h)	0.05		0.05
Earnings Per Share - Non-GAAP basis	$	4.55	$	4.75
(g) In connection with the MEI/Conlux acquisition, the Company expects to incur transaction and integration related costs, and inventory step up and backlog amortization charges in a range of $18 million to $21 million. The $0.22 represents the estimated Earnings Per Share impact for the mid-point of the $18 million to $21 million range.
(h) In 2014, the Company expects to incur costs associated with facility repositioning actions related to the consolidation of certain smaller manufacturing sites and expects to record gains from the sale of certain Company owned real estate.

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2013			2012			2013			2012
CASH FLOW ITEMS
Cash Provided from Operating Activities
before Asbestos - Related Payments	$	162,945		$	173,409		$	302,258		$	312,713
Asbestos Related Payments, Net of Insurance Recoveries	(14,513		)	(17,906		)	(62,827		)	(77,957		)
Cash Provided from Operating Activities	148,432			155,503			239,431			234,756
Less: Capital Expenditures	(10,444		)	(9,364		)	(29,460		)	(29,308		)
Free Cash Flow	$	137,988		$	146,139		$	209,971		$	205,448

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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.

The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net income before special items plus an add-back for net interest, provision for income taxes, depreciation, amortization and stock-based compensation. Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Adjusted EBITDA provides additional information with respect to the Company’s operating 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.

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