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 29, 2018

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

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

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On January 29, 2018, Crane Co. (the “Company”) announced its results of operations for the quarter ended December 31, 2017. The related press release and quarterly financial data supplement is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

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

SECTION 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of December 31, 2017, 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,	2017		2016		2015
Beginning claims	36,052		41,090		47,507
New claims	2,819		2,826		2,572
Settlements	(1,038	)	(924	)	(954	)
Dismissals	(5,599	)	(6,940	)	(8,035	)
Ending claims	32,234		36,052		41,090

Of the 32,234 pending claims as of December 31, 2017, approximately 18,200 claims were pending in New York, approximately 600 claims were pending in Texas, approximately 1,500 claims were pending in Mississippi, and approximately 200 claims were pending in Ohio, all jurisdictions in which legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.

The Company has tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court. The Company further has pursued appeals of certain adverse jury verdicts that have resulted in reversals in favor of the defense.

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. On February 23, 2011, the court entered judgment on the verdict in the amount of $4.0 million, jointly, against the Company and two other defendants, with additional interest in the amount of $0.01 million being assessed against the Company, only. All defendants, including the Company, and the plaintiffs took timely appeals of certain aspects of those judgments. On September 5, 2013, a panel of the Pennsylvania Superior Court, in a 2-1 decision, vacated the Nelson verdict against all defendants, reversing and remanding for a new trial. Plaintiffs requested a rehearing in the Superior Court and by order dated November 18, 2013, the Superior Court vacated the panel opinion, and granted en banc reargument. On December 23, 2014, the Superior Court issued a second opinion reversing the jury verdict. Plaintiffs sought leave to appeal to the Pennsylvania Supreme Court, which defendants have opposed. By order dated June 21, 2017, the Supreme Court of Pennsylvania denied plaintiffs’ petition for leave to appeal. The case is set for a new trial in April 2018.

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 appealed, and the judgment was affirmed in a 3-2 decision and order dated July 3, 2014. The Company appealed to the New York Court of Appeals. The court heard oral arguments on May 3, 2016 and affirmed the judgment in a decision dated June 28, 2016. The judgment, with interest, in the amount of $6.6 million was paid in the third quarter 2016.

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 appealed, and the judgment was affirmed by order dated March 21, 2014. The Company sought reargument of this decision, which was denied. The Company sought review before the New York Court of Appeals, which was accepted in the fourth quarter of 2014. The court heard oral arguments on May 3, 2016 and affirmed the judgment in a decision dated June 28, 2016. The judgment, with interest, in the amount of $0.2 million was paid in the third quarter 2016.

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. By opinion dated April 16, 2014, the Court of Appeal affirmed the finding of liability against the Company, and the California Supreme Court denied review of this ruling. The Court of Appeal reserved the arguments relating to recoverable damages to a subsequent appeal that remains pending. On August 21, 2015, the Court of Appeal reversed the trial court with respect to a $20,000 damages item, but affirmed the trial court in all other respects. The Company sought review of that ruling before the Supreme Court of California, which was denied. The Company settled the matter in December 2015.  The settlement was reflected in the fourth quarter 2015 indemnity amount.

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 appealed, and on April 17, 2015, a panel of the Superior Court of Pennsylvania affirmed the trial court’s ruling. The Supreme Court of Pennsylvania accepted the Company’s petition for review and heard oral arguments on September 13, 2016. On November 22, 2016, the Court dismissed the Company’s appeal as improvidently granted. The Company paid the Vinciguerra judgment in the amount of $0.6 million in the fourth quarter 2016. The Company paid the Amato judgment, with interest, in the amount of $0.3 million in the second quarter of 2017.

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 was entered against the Company in the amount of $10.6 million (including interest). The Company appealed. The Company took a separate appeal of the trial court’s denial of its summary judgment motion. The Court consolidated the appeals, which were heard in the fourth quarter of 2014. In July 2016 the Company supplemented its briefing based on the New York Court of Appeals Dummitt/Suttner decision. On October 6, 2016, a panel of the Appellate Division, First Department, affirmed the rulings of the trial court on liability issues but further reduced the damages award to $4.25 million, which after settlement offsets is calculated to be $1.94 million. Plaintiff has the option of accepting the reduced amount or having a new trial on damages. The Company filed a motion with the Appellate Division requesting a rehearing on liability issues. The motion was denied. The New York Court of Appeals also denied review. The Company paid in the first quarter of 2017 the Peraica plaintiffs $2.7 million, which was the amount owed under the judgment.

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 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. Post-trial motions were denied, and the court entered judgment in the amount of $1.7 million. On June 12, 2015, the Appellate Division, Fourth Department, affirmed the trial court’s ruling denying the Company’s motion for summary judgment. The court denied reargument of that ruling. The Company pursued a further appeal of the trial court rulings and judgment, which was argued on May 16, 2016. On July 8, 2016, the Court vacated the judgment and granted the Company a new trial on the issue of whether the Company is subject to joint-and-several liability under New York law. Plaintiff filed a motion to enter judgment in the trial court in the amount allegedly unaffected by the appellate ruling, approximately $1.0 million, and the Company opposed the motion. The Company settled the matter. The settlement was reflected in the fourth quarter 2016 indemnity amount.

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 filed post-trial motions seeking to overturn the verdict, which were denied, except that the Court remitted the compensatory damages award to $2.5 million and exemplary damages award to $3.5 million. Considering settlement offsets, the Court further reduced the total damages award to $3.5 million. The Company settled the matter. The settlement is reflected in the first quarter 2015 indemnity amount.

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. Oral argument on the appeal took place on February 16, 2016. On September 14, 2016 a panel of the Florida Court of Appeals reversed and entered judgment in favor of the Company. Plaintiff filed with the Court of Appeals a motion for rehearing and/or certification of an appeal to the Florida Supreme Court, which the Court denied on November 9, 2016. Plaintiffs subsequently requested review by the Supreme Court of Florida. Plaintiffs' motion was granted on July 11, 2017. The briefing in this matter has concluded, and oral argument is set for March 6, 2018.

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

On July 2, 2015, a St. Louis, Missouri state court jury in the James Poage claim entered a $1.5 million verdict for compensatory damages against the Company. The jury also awarded exemplary damages against the Company in the amount of $10 million. The Company filed a motion seeking to reduce the verdict to account for the verdict set-offs. That motion was denied, and judgment was entered against the Company in the amount of $10.8 million. The Company initiated an appeal. Oral argument was held on December 13, 2016. In an opinion dated May 2, 2017, a Missouri Court of Appeals panel affirmed the judgment in all respects.  The Court of Appeals denied the Company’s motion to transfer the case to the Supreme Court of Missouri. The Company sought leave to appeal before the Supreme Court of Missouri, which denied that request. The Company is seeking further review of that ruling by the Supreme Court of the United States.

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

On April 22, 2016, a Phoenix, Arizona federal court jury found the Company responsible for a 20 percent share of a $9 million verdict in the George Coulbourn claim, and further awarded exemplary damages against the Company in the amount of $5 million.  The jury also awarded compensatory and exemplary damages against the other defendant present at trial.  The court entered judgment against the Company in the amount of $6.8 million. The Company filed post-trial motions, which were denied on September 20, 2016. The Company is pursuing an appeal to the Ninth Circuit Court of Appeals. Briefing is complete, and oral argument is set for March 15, 2018.

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

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, 2017, 2016 and 2015 totaled $88.3 million, $73.5 million and $69.4 million. 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, 2017, 2016 and 2015 totaled $62.5 million, $56.0 million and $49.9 million, respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)
For the year ended December 31,	2017			2016			2015
Settlement / indemnity costs incurred (1)	$	51.8		$	30.5		$	27.7
Defense costs incurred (1)	36.5			43.0			41.7
Total costs incurred	$	88.3		$	73.5		$	69.4
Settlement / indemnity payments	$	51.7		$	32.4		$	24.5
Defense payments	38.9			43.7			43.5
Insurance receipts	(28.1		)	(20.1		)	(18.1		)
Pre-tax cash payments	$	62.5		$	56.0		$	49.9

(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, 2017, the Company has resolved (by settlement or dismissal) approximately 130,000 claims. The related settlement cost incurred by the Company and its insurance carriers is approximately $535 million, for an average settlement cost per resolved claim of approximately $4,100. The average settlement cost per claim resolved during the years ended December 31, 2017, 2016 and 2015 was $7,800, $3,900 and $3,100, 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 on the Company’s recent historical experience for claims filed, settled and dismissed during a base reference period. The Company’s experience is then compared to estimates of the number of individuals likely to develop asbestos-related diseases determined based on widely used previously conducted epidemiological studies augmented with current data inputs. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, 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 using a range of reference periods based on claim experience and covering claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against 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.

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 by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which have been estimated to provide $36 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of 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 as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis). In addition to this claims experience, 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, 2016, the Company 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 the generally accepted end point of such claims in 2059. The Company’s previous estimate was for asbestos claims filed or projected to be filed through 2021. The Company’s estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from the Company’s experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, the Company recorded an additional liability of $227 million as of December 31, 2016. This action was based on several factors which contribute to the Company’s ability to reasonably estimate this liability through 2059. First, the number of mesothelioma claims (which although constituting approximately 10% of the Company’s total pending asbestos claims, have consistently accounted for approximately 90% of the Company’s aggregate settlement and defense costs) being filed against the Company and associated settlement costs have stabilized. Second, there have been generally 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 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, recent court decisions in certain jurisdictions have provided additional clarity regarding the nature of claims that may proceed to trial in those jurisdictions and greater predictability regarding future claim activity. Fifth, the Company has coverage-in-place agreements with almost all of its excess insurers, which enables the Company to project a stable relationship between settlement and defense costs paid by the Company and reimbursements from its insurers. Sixth, annual settlements with respect to groups of cases with certain plaintiff firms have helped to stabilize indemnity payments and defense costs. Taking 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 2059.

Management has made its best estimate of the costs through 2059 based on the analysis by HR&A completed in January 2017. Through December 31, 2017, 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, 2017.

A liability of $696 million was recorded as of December 31, 2016 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2059, of which approximately 80% is attributable to settlement and defense costs for future claims projected to be filed through 2059. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $605 million as of December 31, 2017. It is not possible to forecast when cash payments related to the asbestos liability will be fully expended; however, it is expected such cash payments will continue for a number of years past 2059, due to the significant proportion of future claims included in the estimated asbestos liability and the lag time between the date a claim is filed and when it is resolved. None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments. The current portion of the total estimated liability at December 31, 2017 was $85 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 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 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, 2016 (for claims filed or expected to be filed through 2059), the insurance consultant’s model forecasted that approximately 21% 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 2059) that is in excess of available insurance coverage allocated to such years. An asset of $143 million was recorded as of December 31, 2016 representing the probable insurance reimbursement for such claims expected through 2059. The asset is reduced as reimbursements and other payments from insurers are received. The asset was $115 million as of December 31, 2017.

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 other insurer agreements. 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; the assumptions are interdependent and no single factor predominates in determining the liability estimate. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law could also change the estimated liability.

The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance reimbursements, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, due to the uncertainties inherent in litigation matters, no assurances can be given regarding the outcome of any litigation, if necessary, to enforce 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. Although the resolution of these claims will likely take many years, the effect on the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material.

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 29, 2018 and Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 2017.

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 29, 2018
	By:	/s/ Richard A. Maue
		Richard A. Maue
		Vice President - Finance
		Chief Financial Officer

EX-99.1

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

Crane Co. Reports 2017 Results and Updates 2018 Guidance

Highlights from Full Year 2017 Results and 2018 Guidance:

• GAAP earnings per diluted share (EPS) of $2.84 compared to $2.07 in 2016. Excluding Special Items, EPS of $4.53 increased 7% compared to last year.

• Record free cash flow (cash provided by operating activities less capital spending) of $269 million.

• Revising 2018 GAAP EPS guidance range to $4.65-$4.85. Excluding Special Items, the new guidance range is $5.35-$5.55.

• Guidance now includes the impact of the Crane Currency acquisition, the impacts of the 2017 U.S. tax reform legislation, a new repositioning program, and expenses associated with acceleration of growth investments enabled by tax reform.

STAMFORD, CONNECTICUT - January 29, 2018 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported full year and fourth quarter 2017 financial results, and provided an update on its 2018 outlook.

"We delivered three new records in 2017: adjusted EPS of $4.53, adjusted operating margins of 15.2%, and free cash flow of $269 million," said Max Mitchell, Crane Co. President and Chief Executive Officer. "I am very proud of our 2017 performance, and I have never been more excited about Crane's multi-year earnings outlook than I am today. Our core business is executing extremely well; the recently completed Crane Currency acquisition is off to a great start; the recent tax reform legislation will not only improve our profitability, but it will enable us to accelerate investments for future growth; and we continue to focus on margin improvement through productivity and certain new repositioning actions.

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"While there is a lot of exciting activity in our core business, including strong execution on growth and productivity initiatives, several other developments are also contributing to our positive outlook. Earlier this month, we closed on the Crane Currency acquisition, the second largest transaction in Crane's history. Crane Currency is the fastest growing, fully integrated global currency provider in the global banknote supply and security industry, and it is an excellent fit to complement our expanding presence in the currency and payment markets, bringing proprietary and differentiated technology. We believe that the combined businesses will be stronger together, offering end-to-end currency and security solutions, from substrate manufacturing and banknote design and printing to micro-optics and banknote validation. The integration is well underway, and we expect Crane Currency to contribute $0.15 of adjusted EPS in 2018, growing to approximately $1.00 of EPS annually by 2021.

"We also view the recently enacted Tax Cuts and Jobs Act (TCJA) as a very favorable development with an annual EPS benefit of approximately $0.50. The TCJA should also improve our global competitiveness by enabling increased flexibility to deploy capital in the United States. Because of the benefits and related flexibility we expect from this legislation, we have decided to accelerate strategic growth investments across several of our businesses over the next two years. These investments will offset approximately $0.25 per share of the tax benefit in 2018, and then decline to approximately $0.15 in 2019, with the full $0.50 annual EPS benefit from the TCJA reading through by 2020.

"In addition, our relentless focus on continuously improving our operations has resulted in a significant opportunity to execute proactive facility consolidations within our Fluid Handling, Aerospace & Electronics, and Payment & Merchandising businesses. We believe that these actions will not only improve our cost position, but enable us to meet higher expected future demand and provide the footprint that best serves our customers. These actions should contribute approximately $0.10 of EPS, excluding

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Special Items, in 2018, growing to an annualized EPS run-rate of approximately $0.35 by the end of 2020."

Mr. Mitchell concluded, "The growth potential of our core business, combined with the benefits from the Crane Currency acquisition, tax reform, accelerated growth investments, and repositioning activities, will position Crane for double-digit annual adjusted earnings growth for at least the next several years, with further upside possible from additional capital deployment. We also announced today that we are raising our dividend for the first time since 2014, further reflecting confidence in our outlook." (Please see the attached Non-GAAP Financial Measures tables.)

Fourth Quarter 2017 Results

The fourth quarter 2017 GAAP net loss was $0.48 per share, compared to a fourth quarter 2016 GAAP net loss of $1.09 per share. Fourth quarter 2017 results include: a tax charge of $87 million, or $1.44 per diluted share, related to the TCJA; an after-tax charge of $8 million, or $0.13 per diluted share, related to repositioning, net; and, an after-tax charge of $5 million, or $0.08 per diluted share, for M&A related items. Fourth quarter 2016 results include an after-tax net asbestos provision of $125 million, or $2.13 per diluted share. Excluding Special Items, fourth quarter 2017 EPS was $1.18, compared to $1.02 in 2016. (Please see the attached Non-GAAP Financial Measures tables.)

Fourth quarter 2017 sales were $714 million, up 5% compared to 2016. Core sales increased $13 million, or 2%, with $14 million, or 2%, of favorable foreign exchange, and a $5 million, or 1%, net acquisition benefit.

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Fourth quarter 2017 operating profit was $91 million compared to an operating loss of $92 million in 2016. Excluding Special Items, fourth quarter 2017 operating profit was $109 million, an increase of 8% compared to 2016. (Please see the attached Non-GAAP Financial Measures tables.)

Full Year 2017 Results

Full year 2017 GAAP EPS was $2.84, compared to $2.07 in 2016. Full year 2017 results include: a tax charge of $87 million, or $1.44 per share, related to the TCJA; an after-tax charge of $8 million, or $0.13 per share, related to repositioning, net; and, an after-tax charge of $7 million, or $0.11 per share, for M&A related items. Full year 2016 results include an after-tax net asbestos provision of $125 million, or $2.11 per share, and a $3 million net after-tax legal settlement charge, or $0.05 per share. Excluding Special Items, 2017 EPS of $4.53 increased 7% compared to $4.23 in 2016. (Please see the attached Non-GAAP Financial Measures tables.)

Full year 2017 sales were $2.8 billion, up 1% compared to 2016. Core sales increased $31 million, or 1%, and net acquisitions contributed $14 million, partially offset by $7 million of unfavorable foreign exchange.

Full year 2017 operating profit was $402 million compared to $200 million in 2016. Excluding Special Items, full year 2017 operating profit was $423 million, an increase of 6% compared to $398 million in 2016. Full year 2017 adjusted operating margin of 15.2% increased 70 basis points compared to 14.5% in 2016. (Please see the attached Non-GAAP Financial Measures tables.)

Cash Flow and Other Financial Metrics

Cash provided by operating activities for full year 2017 was $318 million, flat compared to $318 million in 2016. Free cash flow (cash provided by operating activities less capital spending) was $269

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million in 2017, compared to $267 million in 2016. The Company's cash position was $706 million at December 31, 2017, compared to $510 million at December 31, 2016. Total debt was $743 million at December 31, 2017, compared to $745 million at December 31, 2016. On January 10, 2018, Crane Co. acquired Crane Currency for $800 million on a cash free and debt free basis using a combination of short-term debt and cash on hand.

Tax Reform Bill Enabling Accelerated Growth Investments

On December 22, 2017, the TCJA was signed into law, significantly changing U.S. corporate tax law. As a result, the fourth quarter of 2017 included a one-time tax charge of $87 million related to both the remeasurement of U.S. deferred tax balances and to taxation of unremitted earnings of non-U.S. subsidiaries.

For 2018, we expect a GAAP tax rate of approximately 22%. Excluding Special Items, we expect a 2018 effective tax rate of approximately 22%, a decrease of approximately eight to nine percentage points compared to Crane's typical effective tax rate prior to the TCJA.

As a result of the tax savings and greater flexibility to repatriate foreign cash related to the TCJA, Crane Co. is accelerating growth investments across its businesses. On a pre-tax basis, these incremental growth investments are expected to be approximately $20 million in 2018 and $10 million in 2019.

Repositioning Initiatives

2018 benefits from repositioning actions in our Fluid Handling, Payment & Merchandising Technologies, and Aerospace & Electronics businesses are expected to be approximately $8 million, increasing to an annual run-rate of approximately $30 million by the end of 2020. Net pre-tax charges

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associated with these repositioning activities are expected to be approximately $30 million through 2020, including the $13 million net charge in the fourth quarter of 2017 and $11 million expected during 2018.

Raising 2018 Guidance

On December 5, 2017, Crane Co. introduced preliminary 2018 full year earnings guidance of $4.85-$5.05 per diluted share, excluding any potential impact from the then-pending Crane Currency acquisition. (Please see the attached Non-GAAP Financial Measures tables.)

We now expect 2018 full year GAAP EPS of $4.65-$4.85. Excluding Special Items, we expect 2018 full year EPS of $5.35-$5.55. Guidance assumes core sales growth of +2% to +4%, a modest benefit from favorable foreign exchange, and approximately $400 million of sales contribution from the Crane Currency acquisition.

Full year 2018 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $220-$250 million, including capital expenditures of approximately $125 million. Capital expenditures are expected to be elevated in 2018 primarily due to repositioning activities, further investments enabled by the TCJA, and investment activity at Crane Currency.

Segment Results

All comparisons detailed in this section refer to operating results for the fourth quarter 2017 versus the fourth quarter 2016.

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Fluid Handling

	Fourth Quarter						Change
(dollars in millions)	2017			2016
Sales	$	272		$	240		$	32		13	%
Operating Profit	$	20		$	28		$	(8	)	(27	%)
Operating Profit, before Special Items*	$	31		$	28		$	3		12	%
Profit Margin	7.5		%	11.6		%
Profit Margin, before Special Items*	11.5		%	11.6		%
*Please see the attached Non-GAAP Financial Measures tables

Sales increased $32 million, driven by $16 million, or 7%, core growth, a $6 million, or 2.5%, contribution from net acquisitions, and $10 million, or 4%, of favorable foreign exchange. Operating margin declined to 7.5%, compared to 11.6% last year, reflecting the impact of repositioning charges. Excluding Special Items, operating margin was 11.5%, approximately flat compared to 11.6% in 2016. Fluid Handling order backlog was $262 million at December 31, 2017, compared to $228 million at December 31, 2016.

Payment & Merchandising Technologies

	Fourth Quarter						Change
(dollars in millions)	2017			2016
Sales	$	194		$	195		$	—		—	%
Operating Profit	$	25		$	38		$	(13	)	(34	%)
Operating Profit, before Special Items*	$	38		$	38		$	(1	)	(2	%)
Profit Margin	13.1		%	19.7		%
Profit Margin, before Special Items*	19.4		%	19.7		%
*Please see the attached Non-GAAP Financial Measures tables

Sales were flat, with a $4 million core sales decline approximately offset by favorable foreign exchange. Operating margin declined to 13.1%, from 19.7% last year, reflecting the impact of repositioning charges. Excluding Special Items, operating margin of 19.4% declined slightly from 19.7% last year.

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Aerospace & Electronics

	Fourth Quarter						Change
(dollars in millions)	2017			2016
Sales	$	185		$	187		$	(2	)	(1	)%
Operating Profit	$	55		$	39		$	16		41	%
Operating Profit, before Special Items*	$	46		$	39		$	6		16	%
Profit Margin	29.9		%	21.0		%
Profit Margin, before Special Items*	24.7		%	21.0		%
*Please see the attached Non-GAAP Financial Measures tables

Sales decreased $2 million, or 1%, primarily as a result of unfavorable comparisons related to shipments for a large military program in the fourth quarter of 2016. Operating margin increased to 29.9%, from 21.0% last year, primarily as a result of a gain on the sale of an asset related to repositioning activities. Excluding Special Items, operating margin increased 370 basis points to 24.7%, primarily as a result of strong productivity. Aerospace & Electronics order backlog was $374 million at December 31, 2017, compared to $353 million at December 31, 2016.

Engineered Materials

	Fourth Quarter						Change
(dollars in millions)	2017			2016
Sales	$	63		$	60		$	3	5	%
Operating Profit	$	10		$	10		$	—	(4	)%
Profit Margin	15.9		%	17.4		%

Sales increased $3 million, or 5%, driven primarily by higher sales to the Recreational Vehicle market. Operating margin declined 150 basis points to 15.9%, as the higher volumes and productivity were more than offset by higher material costs.

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Additional Information

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

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 30, 2018 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website. Slides that accompany the conference call will be available on the Company’s website.

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the hydrocarbon processing, petrochemical, chemical, power generation, unattended payment, banknote design and production, automated merchandising, aerospace, electronics, transportation and other markets. The Company has four business segments: Fluid Handling, Payment & Merchandising Technologies, Aerospace & Electronics and Engineered Materials. Crane has approximately 12,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements 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, 2016 and subsequent reports filed with the Securities and Exchange Commission.

(CR-E)

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(Financial Tables Follow)

10

CRANE CO.

Income Statement Data

(in millions, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
		2017			2016			2017			2016
Net Sales:
Fluid Handling	$	272.2		$	240.4		$	1,042.5		$	999.5
Payment & Merchandising Technologies		194.4			194.6			776.7			745.8
Aerospace & Electronics		184.9			186.5			691.4			745.7
Engineered Materials		62.7			59.9			275.4			257.0
Total Net Sales	$	714.2		$	681.4		$	2,786.0		$	2,748.0
Operating Profit (Loss):
Fluid Handling	$	20.4		$	28.0		$	111.8		$	119.5
Payment & Merchandising Technologies		25.4			38.4			148.5			135.5
Aerospace & Electronics		55.4			39.2			160.2			149.8
Engineered Materials		10.0			10.4			49.5			49.0
Corporate		(20.3	)		(15.2	)		(68.1	)		(61.1	)	*
Asbestos Provision		—			(192.4	)		—			(192.4	)
Total Operating Profit (Loss)		90.9			(91.6	)		401.9			200.3
Interest Income		0.7			0.5			2.5			1.9
Interest Expense		(8.8	)		(9.0	)		(36.1	)		(36.5	)
Miscellaneous- Net		0.1			(1.1	)		(0.8	)		(1.6	)
Income (Loss) Before Income Taxes		82.9			(101.2	)		367.5			164.1
Provision for (Benefit from) Income Taxes		111.4			(37.6	)		195.0			40.3
Net (loss) income before allocation to noncontrolling interests		(28.5	)		(63.6	)		172.5			123.8
Less: Noncontrolling interest in subsidiaries' earnings		0.2			0.4			0.7			1.0
Net (loss) income attributable to common shareholders	$	(28.7	)	$	(64.0	)	$	171.8		$	122.8
Share Data:
(Loss) Earnings per Diluted Share	$	(0.48	)	$	(1.09	)	$	2.84		$	2.07
Average Diluted Shares Outstanding		59.4			58.8			60.4			59.3
Average Basic Shares Outstanding		59.4			58.8			59.4			58.5
Supplemental Data:
Cost of Sales	$	455.6		$	433.7		$	1,770.9		$	1,758.3
Asbestos Provision		—			192.4			—			192.4
Selling, General & Administrative		150.0			146.9			592.4			597.0		*
Transaction Related Charges (see non-GAAP measures)		4.7			—			7.8			—
Repositioning Charges, net of gain on property sale (see non-GAAP measures)		13.0			—			13.0			—
Depreciation and Amortization **		18.7			16.6			72.7			67.4
Stock-Based Compensation Expense **		5.3			4.9			21.8			21.7
* Includes a $5 million legal settlement.
** Amount included within cost of sales and selling, general & administrative costs.

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CRANE CO.

Condensed Balance Sheets

(in millions)

	December 31, 2017		December 31, 2016
ASSETS
Current Assets
Cash and Cash Equivalents	$	706.2	$	509.7
Accounts Receivable, net	418.4		396.4
Current Insurance Receivable - Asbestos	25.0		18.0
Inventories, net	349.3		342.5
Other Current Assets	19.6		49.1
Total Current Assets	1,518.5		1,315.7
Property, Plant and Equipment, net	282.4		278.9
Long-Term Insurance Receivable - Asbestos	90.1		125.2
Other Assets	495.6		559.0
Goodwill	1,206.9		1,149.2
Total Assets	$	3,593.5	$	3,428.0
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	249.4	$	—
Accounts Payable	247.4		223.2
Current Asbestos Liability	85.0		71.0
Accrued Liabilities	252.1		223.1
Income Taxes	3.6		3.5
Total Current Liabilities	837.5		520.8
Long-Term Debt	494.1		745.3
Long-Term Deferred Tax Liability	44.9		42.4
Long-Term Asbestos Liability	520.3		624.9
Other Liabilities	348.2		348.9
Total Equity	1,348.5		1,145.7
Total Liabilities and Equity	$	3,593.5	$	3,428.0

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CRANE CO.

Condensed Statements of Cash Flows

(in millions)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2017			2016			2017			2016
Operating Activities:
Net (loss) income attributable to common shareholders	$	(28.7	)	$	(64.0	)	$	171.8		$	122.8
Noncontrolling interest in subsidiaries' earnings	0.2			0.4			0.7			1.0
Net (loss) income before allocations to noncontrolling interests	(28.5		)	(63.6		)	172.5			123.8
Asbestos Provision	—			192.4			—			192.4
Gain on deconsolidation of joint venture	(1.0		)	—			(1.0		)	—
Gain on sale of property related to facility consolidation	(11.1		)	—			(11.1		)	—
Depreciation and amortization	18.7			16.6			72.7			67.4
Stock-based compensation expense	5.3			4.9			21.8			21.7
Defined benefit plans and postretirement credit	(2.2		)	(1.8		)	(8.5		)	(9.1		)
Deferred income taxes	88.3			(41.2		)	104.3			(25.1		)
Cash provided by operating working capital	92.0			61.4			54.0			27.0
Defined benefit plans and postretirement contributions	(3.3		)	(2.4		)	(13.2		)	(8.8		)
Environmental payments, net of reimbursements	(1.9		)	(3.4		)	(6.3		)	(11.6		)
Other	2.8			1.3			(5.2		)	(3.6		)
Subtotal	159.1			164.2			380.0			374.1
Asbestos related payments, net of insurance recoveries	(15.7		)	(14.5		)	(62.5		)	(56.0		)
Total provided by operating activities	143.4			149.7			317.5			318.1
Investing Activities:
Capital expenditures	(14.7		)	(13.0		)	(49.0		)	(51.5		)
Proceeds from disposition of capital assets	22.3			0.1			22.3			0.9
Impact of deconsolidation of joint ventures	(5.2		)	—			(5.2		)	—
Payments for acquisitions, net of cash acquired	—			—			(54.8		)	—
Total provided by (used for) investing activities	2.4			(12.9		)	(86.7		)	(50.6		)
Financing Activities:
Dividends paid	(19.6		)	(19.4		)	(78.4		)	(77.2		)
Reacquisition of shares on open market	—			—			(25.0		)	—
Stock options exercised - net of shares reacquired	4.5			16.8			25.2			26.4
Debt issuance costs	(2.6		)	—			(2.6		)	—
Repayment of commercial paper	—			(34.0		)	—			(49.6		)
Total used for financing activities	(17.7		)	(36.6		)	(80.8		)	(100.4		)
Effect of exchange rate on cash and cash equivalents	5.9			(26.8		)	46.5			(20.9		)
Increase in cash and cash equivalents	134.0			73.4			196.5			146.2
Cash and cash equivalents at beginning of period	572.2			436.3			509.7			363.5
Cash and cash equivalents at end of period	$	706.2		$	509.7		$	706.2		$	509.7

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CRANE CO.

Order Backlog

(in millions)

	December 31,  2017			September 30, 2017			June 30, 2017			March 31, 2017		December 31, 2016
Fluid Handling	$	262.1	*	$	268.8	*	$	258.9	*	$	249.8	$	228.3
Payment & Merchandising Technologies	76.4		**	87.6		**	87.0		**	85.8		94.0
Aerospace & Electronics	373.6			348.4			328.2			352.4		353.4
Engineered Materials	13.6			13.9			14.9			17.8		15.7
Total Backlog	$	725.7		$	718.7		$	689.0		$	705.8	$	691.4

* Includes $3.4 million, $3.5 million and $4.1 million as of each of December 31, 2017, September 30, 2017 and June 30, 2017, respectively, of backlog pertaining to the Westlock business acquired in April 2017.

** Includes $0.2 million, $0.2 million and $0.3 million as of each of December 31, 2017, September 30, 2017 and June 30, 2017, respectively, of backlog pertaining to the Microtronic business acquired in June 2017.

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CRANE CO.

Non-GAAP Financial Measures

(in millions, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,						Percent Change December 31, 2017		Percent Change December 31, 2017
	2017			2016			2017			2016			Three Months		Twelve Months
INCOME ITEMS
Net Sales	$	714.2		$	681.4		$	2,786.0		$	2,748.0		4.8	%	1.4	%
Operating Profit (Loss)	90.9			(91.6		)	401.9			200.3			(199.2	)%	100.7	%
Percentage of Sales	12.7		%	(13.4		)%	14.4		%	7.3		%
Special Items impacting Operating Profit:
Asbestos provision				192.4						192.4
Transaction related charges	4.7			—			7.8			—
Repositioning charges, net of gain on property sale	13.0			—			13.0			—
Legal settlement charge	—			—			—			5.0
Operating Profit before Special Items	$	108.6		$	100.8		$	422.7		$	397.7		7.8	%	6.3	%
Percentage of Sales	15.2		%	14.8		%	15.2		%	14.5		%
Net (Loss) Income Attributable to Common Shareholders	$	(28.7	)	$	(64.0	)	$	171.8		$	122.8
Per Share	$	(0.48	)	$	(1.09	)	$	2.84		$	2.07		(55.6	)%	37.3	%
Special Items Impacting Net Income Attributable to Common Shareholders:
Asbestos provision	—			125.1			—			125.1
Per Share				2.13						2.11
Transaction related charges - Net of Tax	4.6			—			6.7			—
Per Share	$	0.08					$	0.11
Repositioning charges, net of gain on property sale - Net of Tax	8.0			—			8.0			—
Per Share	0.13						0.13
Legal settlement charge - Net of Tax	—			—			—			3.3
Per Share										0.05
Impact of Tax Law Change	87.1			—			87.1			—
Per Share	$	1.44					$	1.44
Net Income Attributable To Common Shareholders Before Special Items	$	71.0		$	61.1		$	273.6		$	251.1		16.1	%	8.9	%
Per Basic Share	$	1.20		$	1.04		$	4.61		$	4.30		14.9	%	7.2	%
Per Diluted Share	$	1.18		$	1.02		$	4.53		$	4.23
In the three months ended December 31, 2017 and December 31, 2016, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since these periods were in a loss position. Had Net Income Attributable To Common Shareholders been reported for these periods, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).
	(in thousands)			(in thousands)
Average Basic Shares Outstanding	59,373			58,768
Effect of Diluted Stock Options	1,041			991
Average Shares Outstanding including the effect of Stock Options	60,414			59,759
When considering the effect of dilutive stock options on shares outstanding, Net Income Attributable To Common Shareholders Before Special Items is $1.18 per share and $1.02 per share for the three months ended December 31, 2017 and 2016, respectively.

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Special Items Impacting Provision for Income Taxes
Provision for Income Taxes - GAAP Basis	$	111.4		$	(37.6	)	$	195.0		$	40.3
Tax effect of asbestos provision	—			67.3			—			67.3
Tax effect of transaction related charges	0.1			—			1.1			—
Tax effect of repositioning charges, net of gain on property sale	4.9			—			4.9			—
Tax effect of legal settlement charge	—			—			—			1.7
Impact of tax law change	(87.1		)	—			(87.1		)	—
Provision for Income Taxes - non-GAAP Basis	$	29.4		$	29.7		$	113.9		$	109.3

Segment Information:	For the three months ended December 31, 2017
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net Sales	$	272.2		$	194.4		$	184.9		$	62.7		$	—		$	714.2
Operating Profit - GAAP	20.4			25.4			55.4			10.0			(20.3		)	90.9
Transaction related charges	0.4			0.1			—			—			4.2			4.7
Repositioning charges, net of gain on property sale	10.6			12.2			(9.8		)	—			—			13.0
Operating Profit before Special Items	31.4			37.7			45.6			10.0			(16.1		)	108.6
Percentage of Sales	11.5		%	19.4		%	24.7		%	15.9		%				15.2		%

Segment Information:	For the three months ended December 31, 2016
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net Sales	$	240.4		$	194.6		$	186.5		$	59.9		$	—		$	681.4
Operating Profit - GAAP	28.0			38.4			39.2			10.4			(207.6		)	(91.6		)
Asbestos provision	—			—			—			—			192.4			192.4
Operating Profit before Special Items	28.0			38.4			39.2			10.4			(15.2		)	100.8
Percentage of Sales	11.6		%	19.7		%	21.0		%	17.4		%				14.8		%

16

CRANE CO.

Guidance

(in millions, except per share data)

	2018 Full Year Guidance
2018 Earnings Per Share Guidance	Low		High
Earnings Per Share - GAAP basis	4.65		4.85
Repositioning Costs	0.15		0.15
Acquisition Integration Costs	$	0.55	$	0.55
Earnings Per Share - Non-GAAP basis	$	5.35	$	5.55

	Three Months Ended December 31,						Twelve Months Ended December 31,						2018 Full Year Guidance
	2017			2016			2017			2016			Low			High
CASH FLOW ITEMS
Cash Provided by Operating Activities
before Asbestos - Related Payments	$	159.1		$	164.2		$	380.0		$	374.1		$	405.0		$	435.0
Asbestos Related Payments, Net of Insurance Recoveries	(15.7		)	(14.5		)	(62.5		)	(56.0		)	(60.0		)	(60.0		)
Cash Provided by Operating Activities	143.4			149.7			317.5			318.1			345.0			375.0
Less: Capital Expenditures	(14.7		)	(13.0		)	(49.0		)	(51.5		)	(125.0		)	(125.0		)
Free Cash Flow	$	128.7		$	136.7		$	268.5		$	266.6		$	220.0		$	250.0

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.

17