EX-99.2 3 exhibit992q12016.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2
CRANE CO.
Income Statement Data
(in millions, except per share data)
 
 
Three Months Ended
 
March 31,
 
 
2016
 
 
2015
Net Sales:
 
 
 
 
 
Fluid Handling
$
248.0

 
$
275.6

Payment & Merchandising Technologies
 
172.0

 
 
171.9

Aerospace & Electronics
 
171.7

 
 
161.6

Engineered Materials
 
68.3

 
 
69.7

    Total Net Sales
$
660.0

 
$
678.8

 
 
 
 
 
 
Operating Profit (Loss):
 
 
 
 
 
Fluid Handling
$
25.4

 
$
34.3

Payment & Merchandising Technologies
 
28.0

 
 
21.1

Aerospace & Electronics
 
33.1

 
 
30.1

Engineered Materials
 
13.7

 
 
14.3

Corporate
 
(14.7
)
 
 
(13.7
)
    Total Operating Profit
 
85.5

 
 
86.0

 
 
 
 
 
 
Interest Income
 
0.5

 
 
0.5

Interest Expense
 
(9.1
)
 
 
(9.9
)
Miscellaneous - Net
 
(0.3
)
 
 
(0.3
)
Income Before Income Taxes
 
76.6

 
 
76.3

Provision for Income Taxes
 
21.4

 
 
24.9

Net income before allocation to noncontrolling interests
 
55.2

 
 
51.3

    Less: Noncontrolling interest in subsidiaries' earnings
 
0.2

 
 
0.3

Net income attributable to common shareholders
$
55.0

 
$
51.1

 
 
 
 
 
 
Share Data:
 
 
 
 
 
Earnings per Diluted Share
$
0.93

 
$
0.87

 
 
 
 
 
 
Average Diluted Shares Outstanding
 
58.9

 
 
58.9

Average Basic Shares Outstanding
 
58.2

 
 
58.1

 
 
 
 
 
 
Supplemental Data:
 
 
 
 
 
Cost of Sales
$
426.1

 
$
440.0

Selling, General & Administrative
 
148.4

 
 
148.3

Repositioning Charges (see non-GAAP measures)
 

 
 
2.6

Acquisition Related Charges (see non-GAAP measures)
 

 
 
1.8

Depreciation and Amortization *
 
16.5

 
 
16.5

Stock-Based Compensation Expense *
 
6.1

 
 
5.8

 
 
 
 
 
 
* Amount included within Cost of Sales and Selling, General & Administrative costs.

1



CRANE CO.
Condensed Balance Sheets
(in millions)
 
 
 
March 31, 2016
 
December 31,
2015
ASSETS
 
 
 
 
Current Assets
 
 
 
 
Cash and Cash Equivalents
 
$
354.0

 
$
363.5

Accounts Receivable, net
 
430.2

 
397.6

Current Insurance Receivable - Asbestos
 
20.5

 
20.5

Inventories, net
 
401.9

 
376.9

Other Current Assets
 
48.1

 
45.0

Total Current Assets
 
1,254.7

 
1,203.5

 
 
 
 
 
Property, Plant and Equipment, net
 
279.9

 
276.0

Long-Term Insurance Receivable - Asbestos
 
105.8

 
108.7

Other Assets
 
576.3

 
580.8

Goodwill
 
1,178.3

 
1,167.9

 
 
 
 
 
Total Assets
 
$
3,395.0

 
$
3,336.9

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Current Liabilities
 
 
 
 
Notes Payable and Current Maturities of Long-Term Debt
 
$
78.1

 
$
49.6

Accounts Payable
 
199.1

 
223.3

Current Asbestos Liability
 
75.0

 
75.0

Accrued Liabilities
 
213.5

 
218.6

Income Taxes
 
9.9

 
6.3

Total Current Liabilities
 
575.6

 
572.8

 
 
 
 
 
Long-Term Debt
 
744.8

 
744.6

Long-Term Deferred Tax Liability
 
52.0

 
50.0

Long-Term Asbestos Liability
 
456.8

 
470.5

Other Liabilities
 
340.9

 
348.1

 
 
 
 
 
Total Equity
 
1,224.9

 
1,150.8

 
 
 
 
 
Total Liabilities and Equity
 
$
3,395.0

 
$
3,336.9


2



CRANE CO.
Condensed Statements of Cash Flows
(in millions)
 
 
 
Three Months Ended
March 31,
 
 
2016
 
2015
Operating Activities:
 
 
 
 
Net income attributable to common shareholders
 
$
55.0

 
$
51.1

Noncontrolling interest in subsidiaries' earnings
 
0.2

 
0.3

Net income before allocations to noncontrolling interests
 
55.2

 
51.3

Restructuring - Non Cash
 

 
0.2

Depreciation and amortization
 
16.5

 
16.5

Stock-based compensation expense
 
6.1

 
5.8

Defined benefit plans and postretirement expense
 
(2.4
)
 
(1.6
)
Deferred income taxes
 
5.3

 
4.3

Cash used for operating working capital
 
(82.0
)
 
(57.1
)
Defined benefit plans and postretirement contributions
 
(2.2
)
 
(3.0
)
Environmental payments, net of reimbursements
 
(2.0
)
 
(4.1
)
Other
 
(3.7
)
 
(13.4
)
  Subtotal
 
(9.2
)
 
(0.9
)
Asbestos related payments, net of insurance recoveries
 
(10.8
)
 
(10.7
)
  Total used for operating activities
 
(20.0
)
 
(11.6
)
 
 
 
 
 
Investing Activities:
 
 
 
 
Capital expenditures
 
(11.0
)
 
(10.2
)
Proceeds from disposition of capital assets
 
0.5

 
1.4

 Total used for investing activities
 
(10.5
)
 
(8.8
)
 
 
 
 
 
Financing Activities:
 
 
 
 
Dividends paid
 
(19.2
)
 
(19.1
)
Reacquisition of shares on open market
 

 
(25.0
)
Stock options exercised - net of shares reacquired
 
0.6

 
6.7

Excess tax benefit from stock-based compensation
 

 
0.9

Repayment of credit facility
 

 
(100.0
)
Proceeds from issuance of commercial paper
 
28.5

 
126.7

 Total provided by (used for) financing activities
 
9.9

 
(9.9
)
 
 
 
 
 
Effect of exchange rate on cash and cash equivalents
 
11.1

 
(19.0
)
Decrease in cash and cash equivalents
 
(9.5
)
 
(49.3
)
Cash and cash equivalents at beginning of period
 
363.5

 
346.3

Cash and cash equivalents at end of period
 
$
354.0

 
$
296.9






3



CRANE CO.
Order Backlog
(in millions)
 
 
 
March 31, 2016
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
Fluid Handling
 
$
263.4

 
$
267.2

 
$
278.6

 
$
287.3

 
$
304.3

Payment & Merchandising Technologies
 
60.4

 
62.6

 
55.5

 
61.1

 
68.1

Aerospace & Electronics
 
418.7

 
436.4

 
459.9

 
448.1

 
446.1

Engineered Materials
 
16.0

 
15.2

 
13.7

 
15.4

 
18.6

    Total Backlog
 
$
758.6

 
$
781.5

 
$
807.8

 
$
811.9

 
$
837.2
















































4



CRANE CO.
Non-GAAP Financial Measures
(in millions, except per share data)
 
Three Months Ended
March 31,
 
Percent Change
March 31, 2016
 
2016
 
2015
 
Three Months
INCOME ITEMS
 
 
 
 
 
Net Sales
$
660.0

 
$
678.8

 
(2.8
)%
 
 
 
 
 
 
Operating Profit
85.5

 
86.0

 
(0.6
)%
Percentage of Sales
13.0
%
 
12.7
%
 
 
 
 
 
 
 
 
Special Items impacting Operating Profit:
 
 
MEI acquisition related integration costs

 
1.6

 
 
MEI acquisition related restructuring costs

 
0.2

 
 
Repositioning charges

 
2.6

 
 
Operating Profit before Special Items
$
85.5


$
90.4


(5.4
)%
 


 
 
 
 
Percentage of Sales
13.0
%
 
13.3
%
 
 
 
 
 
 
 
 
Net Income Attributable to Common Shareholders
$
55.0

 
$
51.1

 
 
Per Share
$
0.93

 
$
0.87

 
7.8
 %
 
 
 
 
 
 
Special Items impacting Net Income Attributable to Common Shareholders:
 
 
 
 
 
 
 
 
 
MEI acquisition related integration charges - Net of Tax

 
1.1

 
 
Per Share
 
 
$
0.02

 
 
 
 
 
 
 
 
MEI acquisition related restructuring charges - Net of Tax

 
0.1

 
 
Per Share
 
 
$
0.00

 
 
 
 
 
 
 
 
Repositioning charges - Net of Tax

 
1.8

 
 
Per Share
 
 
$
0.03

 
 
 
 
 
 
 
 
Net Income Attributable To Common Shareholders Before Special Items
$
55.0

 
$
54.1

 
1.8
 %
Per Share
$
0.93

 
$
0.92

 
1.8
 %

5



 
CRANE CO.
Guidance
(in millions)

 
 
Three Months Ended
March 31,
 
 
2016 Full Year Guidance
 
 
2016
 
2015
 
 
Low
 
High
CASH FLOW ITEMS
 
 
 
 
 
 
 
 
 
Cash Provided by (Used for) Operating Activities
 
 
 
 
 
 
 
 
 
  before Asbestos - Related Payments
 
$
(9.2
)
 
$
(0.9
)
 
 
$
290.0

 
$
320.0

Asbestos Related Payments, Net of Insurance Recoveries
 
(10.8
)
 
(10.7
)
 
 
(50.0
)
 
(50.0
)
Cash Provided by (Used for) Operating Activities
 
(20.0
)
 
(11.6
)
 
 
240.0

 
270.0

Less: Capital Expenditures
 
(11.0
)
 
(10.2
)
 
 
(50.0
)
 
(50.0
)
Free Cash Flow
 
$
(31.0
)
 
$
(21.8
)
 
 
$
190.0

 
$
220.0

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.



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