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): July 22, 2019

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. ☐

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

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

1

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On July 22, 2019, Crane Co. (the “Company”) announced its results of operations for the quarter ended June 30, 2019. The related press release and quarterly financial data supplement is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

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

SECTION 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of June 30, 2019, we were a defendant in cases filed in numerous state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:

	Three Months Ended				Six Months Ended				Year Ended
	June 30,				June 30,				December 31,
	2019		2018		2019		2018		2018
Beginning claims	28,498		30,990		29,089		32,234		32,234
New claims	769		620		1,444		1,228		2,434
Settlements	(178	)	(332	)	(586	)	(605	)	(1,011	)
Dismissals	(238	)	(1,358	)	(1,096	)	(2,937	)	(4,568	)
Ending claims	28,851		29,920		28,851		29,920		29,089

Of the 28,851 pending claims as of June 30, 2019, approximately 18,000 claims were pending in New York, approximately 100 claims were pending in Texas, approximately 300 claims were pending in Mississippi, and approximately 200 claims were pending in Ohio, all jurisdictions in which legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.

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

On March 23, 2010, a Philadelphia, Pennsylvania, state court jury found us responsible for a 1/11th share of a $14.5 million verdict in the James Nelson claim. On February 23, 2011, the court entered judgment on the verdict in the amount of $4.0 million, jointly, against us and two other defendants, with additional interest in the amount of $0.01 million being assessed against us, only. All defendants, including us, and the plaintiffs took timely appeals of certain aspects of those judgments. On September 5, 2013, a panel of the Pennsylvania Superior Court, in a 2-1 decision, vacated the Nelson verdict against all defendants, reversing and remanding for a new trial. Plaintiffs requested a rehearing in the Superior Court and by order dated November 18, 2013, the Superior Court vacated the panel opinion, and granted en banc reargument. On December 23, 2014, the Superior Court issued a second opinion reversing the jury verdict. Plaintiffs sought leave to appeal to the Pennsylvania Supreme Court, which defendants opposed. By order dated June 21, 2017, the Supreme Court of Pennsylvania denied plaintiffs’ petition for leave to appeal. The case was set for a new trial in April 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

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

2

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

On September 17, 2013, a Fort Lauderdale, Florida state court jury in the Richard DeLisle claim found us responsible for 16% of an $8 million verdict. The trial court denied all parties’ post-trial motions, and entered judgment against us in the amount of $1.3 million. We appealed and oral argument on the appeal took place on February 16, 2016. On September 14, 2016, a panel of the Florida Court of Appeals reversed and entered judgment in favor of us. Plaintiff filed with the Court of Appeals a motion for rehearing and/or certification of an appeal to the Florida Supreme Court, which the Court denied on November 9, 2016. Plaintiffs subsequently requested review by the Supreme Court of Florida. Plaintiffs' motion was granted on July 11, 2017. Oral argument took place on March 6, 2018. On October 15, 2018, the Supreme Court of Florida reversed and remanded with instructions to reinstate the trial court’s judgment. We paid the judgment on December 28, 2018.  That payment is reflected in the fourth quarter 2018 indemnity amount.

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

On July 2, 2015, a St. Louis, Missouri state court jury in the James Poage claim entered a $1.5 million verdict for compensatory damages against us. The jury also awarded exemplary damages against us in the amount of $10 million. We filed a motion seeking to reduce the verdict to account for the verdict set-offs. That motion was denied, and judgment was entered against us in the amount of $10.8 million. We initiated an appeal. Oral argument was held on December 13, 2016. In an opinion dated May 2, 2017, a Missouri Court of Appeals panel affirmed the judgment in all respects.  The Court of Appeals denied our motion to transfer the case to the Supreme Court of Missouri. We sought leave to appeal before the Supreme Court of Missouri, which denied that request. The Supreme Court of the United States denied further review on March 26, 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

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

On April 22, 2016, a Phoenix, Arizona federal court jury found us responsible for a 20% share of a $9 million verdict in the George Coulbourn claim, and further awarded exemplary damages against us in the amount of $5 million.  The jury also awarded compensatory and exemplary damages against the other defendant present at trial.  The court entered judgment against us in the amount of $6.8 million. We filed post-trial motions, which were denied on September 20, 2016. We pursued an

3

appeal to the Ninth Circuit Court of Appeals which affirmed the judgment on March 29, 2018. We settled the matter.  The settlement was reflected in the second quarter 2018 indemnity amount.

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

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

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) by us for the six-month periods ended June 30, 2019 and 2018 totaled $40.3 million and $55.9 million, respectively. In contrast to the recognition of settlement and defense costs, which reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more, and may show some fluctuation from period to period. Cash payments of settlement amounts are not made until all releases and other required documentation are received by us, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements. Our total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the six-month periods ended June 30, 2019 and 2018 totaled $17.9 million and $34.9 million, respectively. Detailed below are the comparable amounts for the periods indicated.

	Three Months Ended						Six Months Ended						Year Ended
(in millions)	June 30,						June 30,						December 31,
	2019			2018			2019			2018			2018
Settlement / indemnity costs incurred (1)	$	8.6		$	33.8		$	30.0		$	42.0		$	63.0
Defense costs incurred (1)	5.2			7.3			10.3			13.9			25.8
Total costs incurred	$	13.8		$	41.1		$	40.3		$	55.9		$	88.8
Settlement / indemnity payments	$	6.8		$	29.6		$	15.6		$	34.1		$	61.5
Defense payments	6.2			6.7			10.2			11.8			26.5
Insurance receipts	(4.8		)	(4.3		)	(7.9		)	(11.0		)	(24.1		)
Pre-tax cash payments	$	8.2		$	32.0		$	17.9		$	34.9		$	63.9

⁽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 June 30, 2019, we have resolved (by settlement or dismissal) approximately 138,000 claims. The related settlement cost incurred by us and our insurance carriers is approximately $630 million, for an average settlement cost per resolved claim of approximately $4,600. The average settlement cost per claim resolved during the years ended December 31, 2018, 2017 and 2016 was $11,300, $7,800, and $3,900, respectively. Because claims are sometimes dismissed in large groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate significantly from period to period. In addition to large group dismissals, the nature of the disease and corresponding settlement amounts for each claim resolved will also drive changes from period to period in the average settlement cost per claim. Accordingly, the average cost per resolved claim is not considered in our periodic review of our estimated asbestos liability. For a discussion regarding the four most significant factors affecting the liability estimate, see “Effects on the Condensed Consolidated Financial Statements”.

Effects on the Condensed Consolidated Financial Statements

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

4

has been accepted by numerous courts. After discussions with us, the actuarial consultants augment our liability estimate for the costs of defending asbestos claims in the tort system using a forecast from us which is based upon discussions with our defense counsel. Based on this information, the actuarial consultants compile an estimate of our asbestos liability for pending and future claims using a range of reference periods based on claim experience and covering claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against us, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against us and (4) the aggregate defense costs incurred by us. These factors are interdependent, and no one factor predominates in determining the liability estimate.

In our view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year; the jurisdictions where such claims are filed, and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits; and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which have been estimated to provide $36 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, management continues to monitor these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.

Each quarter, the actuarial consultants compile an update based upon our experience in claims filed, settled and dismissed as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, and non-malignant conditions including asbestosis). In addition to this claims experience, we also consider additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. As part of this process, we also take into account trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of the actuarial consultants and determines whether a change in the estimate is warranted.

Liability Estimate. Effective as of December 31, 2016, we extended our 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 us through the generally accepted end point of such claims in 2059. Our previous estimate was for asbestos claims filed or projected to be filed through 2021. Our estimate of the asbestos liability for pending and future claims through 2059 is based on the projected future asbestos costs resulting from our experience using a range of reference periods for claims filed, settled and dismissed. Based on this estimate, we recorded an additional liability of $227 million as of December 31, 2016. This action was based on several factors which contribute to our ability to reasonably estimate this liability through 2059. First, the number of mesothelioma claims (which, although constituting approximately 10% of our total pending asbestos claims, have consistently accounted for approximately 90% of our aggregate settlement and defense costs) being filed against us 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, we have coverage-in-place agreements with almost all of our excess insurers, which enables us to project a stable relationship between settlement and defense costs paid by us and reimbursements from our 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, we believe that we 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. Through June 30, 2019, our actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in our liability estimate. In addition to this claims experience, we 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, we determined that no change in the estimate was warranted for the period ended June 30, 2019.

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 $491 million as of June 30, 2019. It is not possible to forecast when cash payments related to

5

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 June 30, 2019 was $66 million and represents our best estimate of total asbestos costs expected to be paid during the twelve-month period. Such amount is based upon the actuarial model together with our prior year payment experience for both settlement and defense costs.

Insurance Coverage and Receivables. Prior to 2005, a significant portion of our settlement and defense costs were paid by our primary insurers. With the exhaustion of that primary coverage, we began negotiations with our excess insurers to reimburse us for a portion of our settlement and/or defense costs as incurred. To date, we have entered into agreements providing for such reimbursements, known as “coverage-in-place”, with eleven of our excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for our present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. Similarly, under a variant of coverage-in-place, we have entered into an agreement with a group of insurers confirming the aggregate amount of available coverage under the subject policies and setting forth a schedule for future reimbursement payments to us based on aggregate indemnity and defense payments made. In addition, with ten of our excess insurer groups, we entered into agreements settling all asbestos and other coverage obligations for an agreed sum, totaling $82.5 million in aggregate. Reimbursements from insurers for past and ongoing settlement and defense costs allocable to their policies have been made in accordance with these coverage-in-place and other agreements. All 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, we have concluded settlements with all but one of our 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 we have allocated to it, subject to a reservation of rights. There are no pending legal proceedings between us and any insurer contesting our asbestos claims under our insurance policies.

In conjunction with developing the aggregate liability estimate referenced above, we also developed an estimate of probable insurance recoveries for our asbestos liabilities. In developing this estimate, we considered our coverage-in-place and other settlement agreements described above, as well as 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 our insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage. In addition to consulting with legal counsel on these insurance matters, we retained insurance consultants to assist management in the estimation of probable insurance recoveries based upon the aggregate liability estimate described above and assuming the continued viability of all solvent insurance carriers. Based upon the analysis of policy terms and other factors noted above by our legal counsel, and incorporating risk mitigation judgments by us where policy terms or other factors were not certain, our insurance consultants compiled a model indicating how our historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and us. Using the estimated liability as of December 31, 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 our insurers. While there are overall limits on the aggregate amount of insurance available to us with respect to asbestos claims, those overall limits were not reached by the total estimated liability currently recorded by us, and such overall limits did not influence us in our 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. We allocate to ourselves the amount of the asbestos liability (for claims filed or expected to be filed through 2059) that is in excess of available insurance coverage allocated to such years. An asset of $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 $83 million as of June 30, 2019.

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

Uncertainties. Estimation of our ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims and the manner of their resolution. We caution that our estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on past

6

experience that may not prove reliable as predictors; the assumptions are interdependent and no single factor predominates in determining the liability estimate. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would substantial adverse verdicts at trial that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law could also change the estimated liability.

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

Many uncertainties exist surrounding asbestos litigation, and we will continue to evaluate our estimated asbestos-related liability and corresponding estimated insurance reimbursement as well as the underlying assumptions and process used to derive these amounts. These uncertainties may result in our incurring future charges or increases to income to adjust the carrying value of recorded liabilities and assets, particularly if the number of claims and settlement and defense costs change significantly, or if there are significant developments in the trend of case law or court procedures, or if legislation or another alternative solution is implemented. Although the resolution of these claims will likely take many years, the effect on the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material.

7

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 July 22, 2019 and Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2019

8

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.
July 22, 2019
	By:	/s/ Richard A. Maue
		Richard A. Maue
		Senior Vice President and
		Chief Financial Officer

9

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 Second Quarter Results

Second Quarter 2019 Highlights:

• GAAP earnings per diluted share (EPS) of $1.50 compared to $1.32 in 2018; excluding Special Items, EPS of $1.58 increased 12% compared to last year.

• Sales of $842 million decreased 1% compared to 2018, with core sales growth of 1%.

• Updating full-year GAAP EPS guidance to $6.00-$6.20 vs. prior range of $6.05-$6.25; excluding Special Items, 2019 EPS guidance of $6.25-$6.45 remains unchanged.

STAMFORD, CONNECTICUT - July 22, 2019 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2019 GAAP earnings per diluted share (EPS) of $1.50, compared to $1.32 per diluted share in the second quarter of 2018. Excluding Special Items, second quarter 2019 EPS increased 12% to $1.58, compared to $1.41 in the second quarter of 2018. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

1

Second quarter 2019 sales were $842 million, a decrease of 1% compared to the second quarter of 2018. The sales decrease was comprised of $16.0 million, or 1.9%, of unfavorable foreign exchange and a $1.5 million, or 0.2%, impact from divestitures, partially offset by $8.1 million, or 1%, increase from core growth.

Second quarter 2019 operating profit was $123 million, an increase of 9% compared to $113 million in the second quarter of 2018. Operating profit margin was 14.6% compared to 13.3% last year. Excluding Special Items, second quarter 2019 operating profit was $132 million, an increase of 9% compared to $121 million in the second quarter of 2018. Excluding Special Items, operating profit margin of 15.6% compared to 14.2% last year. (Please see the attached Non-GAAP Financial Measures tables for a detailed reconciliation of reported results to adjusted measures.)

Max Mitchell, Crane Co. President and Chief Executive Officer commented: "We had another strong quarter with operating results again slightly better than expected. All of our businesses are executing well, and we continue to drive both growth and productivity initiatives across our businesses."

Mr. Mitchell continued: "Our offer to acquire CIRCOR was certainly a notable event during the last quarter. While disappointed with the result, our attempt to acquire CIRCOR should give our investors confidence that we will continue to aggressively pursue acquisitions, yet remain disciplined on valuation. We have a full funnel of opportunities that we will continue to pursue in the quarters ahead, and our rigorous approach to capital deployment remains focused on our three primary growth platforms. We are also firmly committed to, and are executing on, our longstanding strategy as a diversified manufacturer of highly engineered industrial products with proprietary technology, and deploying the Crane Business System as a competitive differentiator. I am pleased with our results year-to-date, and excited about the organic and inorganic growth opportunities that we have ahead of us."

2

Second Quarter 2019 Segment Results

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

Fluid Handling

	Second Quarter						Change
(dollars in millions)	2019			2018
Sales	$	291		$	277		$	14	5	%
Operating Profit	$	37		$	30		$	8	26	%
Operating Profit, before Special Items*	$	40		$	30		$	9	31	%
Profit Margin	12.8		%	10.7		%
Profit Margin, before Special Items*	13.7		%	11.0		%
*Please see the attached Non-GAAP Financial Measures tables

Sales increased $14 million, or 5%, driven by $22 million, or 8%, of core growth, partially offset by $8 million, or 3%, of unfavorable foreign exchange. Operating margin increased to 12.8%, compared to 10.7% last year, primarily reflecting productivity, operating leverage on higher volumes, and repositioning benefits. Excluding Special Items, operating margin increased to 13.7%, a 270 basis point increase compared to 11.0% last year. Fluid Handling order backlog was $275 million at June 30, 2019, $280 million at December 31, 2018, and $292 million at June 30, 2018.

Payment & Merchandising Technologies

3

	Second Quarter						Change
(dollars in millions)	2019			2018
Sales	$	291		$	324		$	(33	)	(10	%)
Operating Profit	$	47		$	46		$	—		1	%
Operating Profit, before Special Items*	$	49		$	53		$	(4	)	(7	%)
Profit Margin	16.0		%	14.2		%
Profit Margin, before Special Items*	16.9		%	16.3		%
*Please see the attached Non-GAAP Financial Measures tables

Sales decreased $33 million, or 10%, driven by $25 million, or 8%, of core decline, $7 million, or 2%, of unfavorable foreign exchange and a $1 million impact from a divestiture. Operating margin improved to 16.0%, from 14.2% last year, primarily reflecting lower acquisition related expenses and benefits from productivity and repositioning, partially offset by the impact of lower volumes. Excluding Special Items, operating margins improved to 16.9% from 16.3% last year.

Aerospace & Electronics

	Second Quarter						Change
(dollars in millions)	2019			2018
Sales	$	205		$	187		$	17	9	%
Operating Profit	$	49		$	43		$	6	14	%
Operating Profit, before Special Items*	$	51		$	44		$	8	18	%
Profit Margin	24.2		%	23.1		%
Profit Margin, before Special Items*	25.0		%	23.2		%
*Please see the attached Non-GAAP Financial Measures tables

Sales increased $17 million, or 9%, driven by higher core sales. Operating margin improved to 24.2%, from 23.1% last year, primarily reflecting operating leverage on higher volumes. Excluding Special Items, operating margin improved to 25.0%, from 23.2% last year. Aerospace & Electronics' order backlog was $503 million at June 30, 2019, $447 million at December 31, 2018, and $441 million at June 30, 2018.

4

Engineered Materials

	Second Quarter						Change
(dollars in millions)	2019			2018
Sales	$	56		$	63		$	(7	)	(11	%)
Operating Profit	$	8		$	11		$	(4	)	(33	%)
Profit Margin	13.5		%	17.9		%

Sales decreased $7 million, or 11%, driven primarily by lower sales to Recreational Vehicle customers. Operating margin declined to 13.5%, from 17.9%, primarily reflecting lower volumes.

Updating Full Year 2019 Guidance

We are updating our full year 2019 GAAP EPS guidance to a range of $6.00-$6.20 compared to our prior range of $6.05-$6.25 primarily reflecting a small loss on a divestiture, M&A related expenses, and repositioning. Excluding Special Items, full year 2019 EPS guidance of $6.25-$6.45 remains unchanged. Sales for 2019 are expected to be approximately $3.3 billion, reflecting a slight decline in core sales and an unfavorable foreign exchange impact of approximately 2%. Full year 2019 free cash flow (cash provided by operating activities less capital spending) is expected to be in a range of $335 million to $365 million. (Please see the attached Non-GAAP Financial Measures tables.)

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.

5

Conference Call

Crane Co. has scheduled a conference call to discuss the second quarter financial results on Tuesday, July 23, 2019 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations. Slides that accompany the conference call will be available on the Company’s website.

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

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

(Financial Tables Follow)

6

CRANE CO.

Income Statement Data

(in millions, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2019			2018			2019			2018
Net sales:
Fluid Handling	$	290.6		$	276.9		$	564.3		$	543.5
Payment & Merchandising Technologies		291.0			324.3			594.8			616.7
Aerospace & Electronics		204.5			187.2			399.1			357.5
Engineered Materials		55.5			62.6			115.1			132.3
Total net sales	$	841.6		$	851.0		$	1,673.3		$	1,650.0
Operating profit:
Fluid Handling	$	37.3		$	29.5		$	71.4		$	57.6
Payment & Merchandising Technologies		46.5			46.1			89.7			82.6
Aerospace & Electronics		49.4			43.3			94.2			77.5
Engineered Materials		7.5			11.2			16.9			23.7
Corporate		(17.9	)		(17.1	)		(35.7	)		(34.1	)
Total operating profit		122.8			113.0			236.5			207.3
Interest income		0.7			0.4			1.3			1.2
Interest expense		(11.4	)		(12.8	)		(23.3	)		(27.5	)
Miscellaneous, Net		6.4			4.3			8.4			8.3
Income before income taxes		118.5			104.9			222.9			189.3
Provision for income taxes		27.5			24.2			49.4			39.9
Net income before allocation to noncontrolling interests		91.0			80.7			173.5			149.4
Less: Noncontrolling interest in subsidiaries' earnings		—			—			0.1			—
Net income attributable to common shareholders	$	91.0		$	80.7		$	173.4		$	149.4
Share Data:
Earnings per diluted share	$	1.50		$	1.32		$	2.85		$	2.45
Average diluted shares outstanding		60.8			61.1			60.8			61.0
Average basic shares outstanding		59.9			59.7			59.8			59.7
Supplemental Data:
Cost of Sales	$	535.0		$	545.6		$	1,063.0		$	1,066.8
Selling, General & Administrative		183.8			186.5			373.8			364.2
Acquisition & Integration Related Charges *		2.4			4.1			3.5			9.2
Repositioning Related charges *		6.4			1.7			11.7			2.5
Depreciation and Amortization *		28.6			28.4			56.3			56.3
Stock-Based Compensation Expense *		5.7			5.6			11.2			11.2
* For 2019, amounts included within cost of sales and selling, general & administrative costs.
Totals may not sum due to rounding

7

CRANE CO.

Condensed Balance Sheets

(in millions)

	June 30,  2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	307.0	$	343.4
Accounts receivable, net	543.2		515.8
Current insurance receivable - asbestos	16.0		16.0
Inventories, net	430.6		411.5
Other current assets	83.1		76.2
Total current assets	1,379.9		1,362.9
Property, plant and equipment, net	595.5		599.1
Long-term insurance receivable - asbestos	67.1		75.0
Other assets	685.0		602.0
Goodwill	1,414.3		1,403.7
Total assets	$	4,141.8	$	4,042.7
LIABILITIES AND EQUITY
Current liabilities
Notes payable and current maturities of long-term debt	$	7.8	$	6.9
Accounts payable	275.2		329.2
Current asbestos liability	66.0		66.0
Accrued liabilities	281.0		337.1
Income taxes	4.6		1.0
Total current liabilities	634.6		740.2
Long-term debt	940.3		942.3
Long-term deferred tax liability	60.3		53.2
Long-term asbestos liability	425.4		451.3
Other liabilities	406.8		328.6
Total equity	1,674.4		1,527.1
Total liabilities and equity	$	4,141.8	$	4,042.7

Totals may not sum due to rounding

8

CRANE CO.

Condensed Statements of Cash Flows

(in millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Operating activities:
Net income attributable to common shareholders	$	91.0		$	80.7		$	173.4		$	149.4
Noncontrolling interest in subsidiaries' earnings	—			—			0.1			—
Net income before allocations to noncontrolling interests	91.0			80.7			173.5			149.4
Loss on deconsolidation of joint venture	—			—			1.2			—
Unrealized gain on marketable securities	(3.1		)	—			(3.1		)	—
Depreciation and amortization	28.6			28.4			56.3			56.3
Stock-based compensation expense	5.7			5.6			11.2			11.2
Defined benefit plans and postretirement credit	(2.0		)	(3.8		)	(4.0		)	(7.7		)
Deferred income taxes	5.4			(1.7		)	10.8			11.0
Cash provided by (used for) operating working capital	32.0			(16.3		)	(171.4		)	(45.8		)
Defined benefit plans and postretirement contributions	(0.8		)	(12.0		)	(5.1		)	(16.5		)
Environmental payments, net of reimbursements	(2.4		)	(1.9		)	(4.0		)	(4.2		)
Other	6.7			10.3			5.0			12.6
Subtotal	161.1			89.3			70.4			166.3
Asbestos related payments, net of insurance recoveries	(8.2		)	(32.0		)	(17.9		)	(34.9		)
Total provided by operating activities	152.9			57.3			52.5			131.4
Investing activities:
Capital expenditures	(16.3		)	(16.5		)	(36.1		)	(44.0		)
Proceeds from disposition of capital assets	0.9			0.2			0.9			0.5
Impact of deconsolidation of joint venture	—			—			(0.2		)	—
Purchase of marketable securities	(8.8		)	—			(8.8		)	—
Payments for acquisitions, net of cash acquired	—			—			—			(672.3		)
Total used for investing activities	(24.2		)	(16.3		)	(44.2		)	(715.8		)
Financing activities:
Dividends paid	(23.3		)	(20.9		)	(46.7		)	(41.8		)
Reacquisition of shares on open market	—			(25.0		)	—			(25.0		)
Stock options exercised, net of shares reacquired	1.6			0.5			1.2			5.0
Debt issuance costs	—			—			—			(5.4		)
Repayment of long-term debt	(1.4		)	(200.0		)	(2.8		)	(450.0		)
Repayment of short-term debt	—			—			—			(100.0		)
Proceeds from issuance of long-term debt	—			—			3.0			550.0
Proceeds from issuance of short-term debt	—			—			—			100.0
(Repayment of) proceeds from issuance of commercial paper, net	(55.5		)	(101.3		)	—			171.4
Total (used for) provided by financing activities	(78.6		)	(346.7		)	(45.3		)	204.2
Effect of exchange rate on cash and cash equivalents	0.1			(18.4		)	0.6			(7.8		)
Increase (decrease) in cash and cash equivalents	50.2			(324.1		)	(36.4		)	(388.0		)
Cash and cash equivalents at beginning of period	256.8			642.3			343.4			706.2
Cash and cash equivalents at end of period	$	307.0		$	318.2		$	307.0		$	318.2

Totals may not sum due to rounding

9

CRANE CO.

Order Backlog

(in millions)

	June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018		June 30, 2018
Fluid Handling	$	274.9	$	284.8	$	279.6	$	297.7	$	291.6
Payment & Merchandising Technologies	286.8		322.2		331.5		359.0		350.5
Aerospace & Electronics	502.8		487.1		446.6		445.1		441.3
Engineered Materials	11.5		12.3		14.9		10.3		13.2
Total Backlog	$	1,076.0	$	1,106.4	$	1,072.6	$	1,112.1	$	1,096.6

Totals may not sum due to rounding

10

CRANE CO.

Non-GAAP Financial Measures

(in millions, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,						Percent Change June 30, 2019
	2019			2018			2019			2018			Three Months		Six Months
INCOME ITEMS
Net Sales	$	841.6		$	851.0		$	1,673.3		$	1,650.0		(1.1	)%	1.4	%
Operating Profit	122.8			113.0			236.5			207.3			8.7	%	14.1	%
Percentage of Sales	14.6		%	13.3		%	14.1		%	12.6		%
Special Items impacting Operating Profit:
Inventory step-up and backlog amortization	—			1.9			—			8.5
Acquisition & Integration Related Charges	2.4			4.1			3.5			9.2
Repositioning Related charges	6.4			1.7			11.7			2.5
Operating Profit before Special Items	$	131.6		$	120.7		$	251.7		$	227.5		9.0	%	10.6	%
Percentage of Sales	15.6		%	14.2		%	15.0		%	13.8		%
Net Income Attributable to Common Shareholders	$	91.0		$	80.7		$	173.4		$	149.4
Per Share	$	1.50		$	1.32		$	2.85		$	2.45		13.4	%	16.5	%
Special Items Impacting Net Income Attributable to Common Shareholders:
Inventory step-up and backlog amortization - Net of Tax	—			1.4			—			6.5
Per Share				$	0.02					$	0.11
Acquisition & Integration Related Charges - Net of Tax	1.6			2.9			2.5			6.9
Per Share	$	0.03		$	0.05		$	0.04		$	0.11
Repositioning Related Charges - Net of Tax	6.1			1.3			10.3			1.9
Per Share	$	0.10		$	0.02		$	0.17		$	0.03
Unrealized gain on marketable securities - Net of Tax	(2.5		)	—			(2.5		)	—
Per Share	$	(0.04	)				$	(0.04	)
Incremental financing costs associated with acquisition - Net of Tax	—			0.7			—			2.1
Per Share				$	0.01					$	0.03
Deconsolidation of joint venture - Net of Tax	—			—			0.8			—
Per Share							$	0.01
Impact of Tax Law Change	—			(0.8		)	—			(0.5		)
Per Share				$	(0.01	)				$	(0.01	)
Net Income Attributable To Common Shareholders Before Special Items	$	96.2		$	86.2		$	184.5		$	166.3		11.6	%	10.9	%
Per Diluted Share	$	1.58		$	1.41		$	3.04		$	2.73		12.2	%	11.4	%

	Three Months Ended June 30,					Six Months Ended June 30,
	2019			2018		2019			2018
Special Items Impacting Provision for Income Taxes
Provision for Income Taxes - GAAP Basis	$	27.5		$	24.2	$	49.4		$	39.9
Tax effect of Inventory step-up and backlog amortization	—			0.4		—			2.0
Tax effect of Acquisition & Integration Related Charges	0.8			1.0		1.0			2.2
Tax effect of Repositioning Related Charges	0.3			0.4		1.4			0.6
Tax effect of Unrealized gain on marketable securities	(0.7		)	—		(0.7		)	—
Tax effect of Incremental financing costs associated with acquisition	—			0.2		—			0.6
Tax effect of Deconsolidation of joint venture	—			—		0.4			—
Impact of Tax Law Change	—			0.8		—			0.5
Provision for Income Taxes - non-GAAP Basis	$	27.9		$	27.0	$	51.5		$	45.8

Totals may not sum due to rounding

11

SEGMENT INFORMATION:
	For the three months ended June 30, 2019
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net sales	$	290.6		$	291.0		$	204.5		$	55.5		$	—		$	841.6
Operating Profit - GAAP	37.3			46.5			49.4			7.5			(17.9		)	122.8
Acquisition & Integration Related Charges	—			0.4			—			—			2.0			2.4
Repositioning Related charges	2.5			2.2			1.7			—			—			6.4
Operating Profit before Special Items	$	39.8		$	49.1		$	51.1		$	7.5		$	(15.9	)	$	131.6
Percentage of Sales	13.7		%	16.9		%	25.0		%	13.5		%				15.6		%

	For the three months ended June 30, 2018
	Fluid Handling			Payment & Merchandising Technologies			Aerospace & Electronics			Engineered Materials			Corporate			Total Company
Net Sales	$	276.9		$	324.3		$	187.2		$	62.6		$	—		$	851.0
Operating Profit - GAAP	29.5			46.1			43.3			11.2			(17.1		)	113.0
Inventory step-up and backlog amortization	0.1			1.8			—			—			—			1.9
Acquisition & Integration Related Charges	—			4.1			—			—			—			4.1
Repositioning Related charges	0.8			0.7			0.2			—			—			1.7
Operating Profit before Special Items	$	30.4		$	52.7		$	43.5		$	11.2		$	(17.1	)	$	120.7
Percentage of Sales	11.0		%	16.3		%	23.2		%	17.9		%				14.2		%

Totals may not sum due to rounding

12

CRANE CO.

Guidance

(in millions, except per share data)

	2019 Full Year Guidance
2019 Earnings Per Share Guidance	Low		High
Earnings Per Share - GAAP basis	$	6.00	$	6.20
Repositioning Costs	0.18		0.18
M&A Related, net	0.07		0.07
Earnings Per Share - Non-GAAP basis	$	6.25	$	6.45

CASH FLOW ITEMS

	Three Months Ended June 30,						Six Months Ended June 30,						2019 Full Year Guidance
	2019			2018			2019			2018			Low			High
Cash Provided by Operating Activities  before Asbestos-Related Payments	$	161.1		$	89.3		$	70.4		$	166.3		$	475.0		$	505.0
Asbestos-related payments, net of insurance recoveries	(8.2		)	(32.0		)	(17.9		)	(34.9		)	(50.0		)	(50.0		)
Cash Provided by Operating Activities	152.9			57.3			52.5			131.4			425.0			455.0
Less: Capital Expenditures	(16.3		)	(16.5		)	(36.1		)	(44.0		)	(90.0		)	(90.0		)
Free Cash Flow	$	136.6		$	40.8		$	16.4		$	87.4		$	335.0		$	365.0

Totals may not sum due to rounding

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

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

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

13