Crane Co.

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Press Release $CR Crane Co.

0 COMMENTs 28 Jan
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Crane Co. Reports Fourth Quarter Results; Posts Record EPS in 2012; Provides Updated 2013 EPS Guidance of $4.10 - $4.30

STAMFORD, Conn.--(BUSINESS WIRE)-- Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported fourth quarter 2012 earnings from continuing operations of $0.79 per share, compared to a net loss of $2.18 per share in the fourth quarter of 2011. Fourth quarter 2012 results included after-tax charges of $4 million, or $0.07 per share, associated with previously announced repositioning actions, as well as transaction-related costs of $4 million, or $0.07 per share, related to the recently announced acquisition of MEI Conlux Holdings. Fourth quarter 2011 results included an after-tax asbestos provision of $157 million and an after-tax environmental provision of $20 million (totaling $3.05 per share). Excluding these Special Items, fourth quarter 2012 and 2011 earnings per diluted share from continuing operations were $0.92 and $0.86, respectively. The Company noted that adjusted fourth quarter 2012 earnings of $0.92 did not include a previously anticipated $0.05 per share benefit associated with the reinstatement of the R&D tax credit in the United States, as the legislation was not enacted until early January 2013. (Please see the attached Non-GAAP Financial Measures table for pretax, after-tax and earnings per share amounts of Special Items.)

Fourth quarter 2012 sales from continuing operations of $630 million increased $10 million, or 1.6%, compared to the fourth quarter of 2011, resulting entirely from core sales growth. Operating profit from continuing operations in the fourth quarter of 2012 was $76.2 million compared to an operating loss of $194.0 million in the fourth quarter of 2011. Excluding Special Items, fourth quarter 2012 operating profit from continuing operations increased 8.5% to $84.6 million compared to $78.0 million in the fourth quarter of 2011, and operating profit margin increased to 13.4%, compared to 12.6% in the fourth quarter of 2011. (Please see the attached Non-GAAP Financial Measures table.)

Full Year 2012 Results

Total sales from continuing operations in 2012 were $2.58 billion, an increase of 3.1% from $2.5 billion in 2011, resulting from a core sales increase of $105 million (4.2%) and an increase from acquisitions of $12 million (0.5%), partially offset by unfavorable foreign currency translation of $38 million (1.6%).

Operating profit from continuing operations for the full year 2012 was $310.4 million compared to $36.6 million in 2011. Excluding Special Items, 2012 operating profit from continuing operations increased 9% to $334.9 million, compared to $308.5 million in 2011, and operating profit margin increased to 13.0%, compared to 12.3% in 2011.

Full year 2012 earnings per diluted share were $3.72, compared to $0.44 per share in 2011. Excluding Special Items, 2012 earnings per diluted share increased 9% to $3.75, compared to $3.43 per share in 2011. Full year 2012 results did not include the previously anticipated $0.05 per share benefit associated with the reinstatement of the R&D tax credit (Please see the attached Non-GAAP Financial Measures table.) Order backlog was $749 million at December 31, 2012 compared to $778 million at December 31, 2011.

“We are pleased to report record full year EPS of $3.75, excluding Special Items, which is in line with our most recent guidance,” said Crane Co. chief executive officer, Eric C. Fast. “Our adjusted, full year operating margin was 13%, a substantial improvement over 12.3% in 2011. In 2013, we are expecting our third consecutive year of record earnings, with continued operating margin expansion and strong free cash flow. Our 2013 forecast does not include the recently announced acquisition of MEI which, in combination with Crane Payment Solutions, establishes a third large growth platform for Crane.”

Cash Flow and Financial Position

Cash provided by operating activities in the fourth quarter of 2012 was $155.5 million, compared to $84.8 million in the fourth quarter of 2011, including the effect of a $30 million discretionary pension contribution made in December 2011. Free cash flow (cash provided by operating activities less capital spending) for the fourth quarter of 2012 was $146.1 million, compared to $77.8 million in the fourth quarter of 2011. For the full year 2012, cash provided by operating activities was $234.8 million compared to $149.8 million in 2011. Free cash flow for the full year 2012 was $205.4 million, compared to $115.1 million in the prior year. The Company repurchased 1,271,592 shares of its common stock during 2012 at a cost of $50 million. The Company’s cash position was $424 million at December 31, 2012, as compared to $245 million at December 31, 2011. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

Repositioning Actions

In the second quarter of 2012, the Company initiated repositioning actions relating to the transfer of certain manufacturing operations from higher cost to lower cost Company facilities, principally in response to weak European economic conditions. Following aggregate pre-tax charges of $16.1 million through the third quarter, as planned, the Company incurred additional pre-tax costs of $4.5 million, or $0.07 per share, during the fourth quarter (total pre-tax charges of $20.6 million, or $0.29 per share, during 2012). These repositioning actions, which are substantially complete, are expected to generate $12 million in savings in 2013, of which $10 million relates to Fluid Handling.

Segment Results

All comparisons detailed in this section refer to continuing operations for the fourth quarter 2012 versus the fourth quarter 2011. The commentary refers to the results before Special Items.

Aerospace & Electronics

         
Fourth Quarter Change
(dollars in millions) 2012   2011    
 
Sales $176.1 $172.0 $4.1 2%
 
Operating Profit $39.2 $38.8 $0.4 1%
 
Profit Margin 22.3% 22.6%
 

Fourth quarter 2012 sales increased $4.1 million, or 2%, reflecting a $3.1 million increase (3%) in Aerospace Group sales and an increase of $1.0 million (2%) in Electronics Group revenue. The Aerospace sales growth reflected higher OEM and aftermarket activity. Segment operating profit increased by 1% and margins remained strong at 22.3%, driven by the impact of the higher sales and lower engineering expense in the Aerospace Group, partially offset by lower profits in the Electronics Group.

Aerospace & Electronics order backlog was $378 million at December 31, 2012 compared to $393 million at September 30, 2012 and $411 million at December 31, 2011.

Engineered Materials

       
Fourth Quarter Change
(dollars in millions) 2012     2011    
 
Sales $46.9 $45.0 $1.9 4%
 
Operating Profit $3.3 $4.6 ($1.2) -27%
Operating Profit, before Special Items* $4.7 $4.6 $0.1 2%
 
Profit Margin 7.1% 10.1%
Profit Margin, before Special Items 10.0% 10.1%
 

* Excludes $1.3 million of repositioning charges in Q4 '12 related to the closure of a manufacturing facility.

Segment sales of $46.9 million were 4% higher than the fourth quarter of 2011, reflecting higher sales to recreational vehicle manufacturers. Operating profit increased 2% and margins were generally flat, reflecting the impact of the higher sales, offset by higher raw material costs.

Merchandising Systems

       
Fourth Quarter Change
(dollars in millions) 2012     2011    
 
Sales $94.2 $86.2 $8.0 9%
 
Operating Profit $10.4 $7.7 $2.7 36%
Operating Profit, before Special Items* $11.8 $7.7 $4.1 53%
 
Profit Margin 11.1% 8.9%
Profit Margin, before Special Items 12.6% 8.9%
 

* Excludes $1.4 million of repositioning charges in Q4 '12 related to facility exit costs.

Merchandising Systems sales of $94.2 million increased $8.0 million, or 9%, reflecting strong sales growth in both Payment Solutions and Vending Solutions. Operating profit and margins increased, reflecting the impact of the higher sales and productivity gains in both businesses.

Fluid Handling

             
Fourth Quarter Change
(dollars in millions) 2012   2011
 
Sales $291.9 $294.4 ($2.5) -1%
 
Operating Profit $39.2 $38.3 $0.9 2%
Operating Profit, before Special Items* $40.6 $38.3 $2.3 6%
 
Profit Margin 13.4% 13.0%
Profit Margin, before Special Items 13.9% 13.0%
 

* Excludes $1.4 million of repositioning charges in Q4 '12 related to transferring production to lower cost Company facilities.

Fourth quarter 2012 sales declined $2.5 million, or 1%, driven primarily by weaker European end markets. Segment operating margin improved to 13.9%, reflecting improved execution, productivity gains and solid cost management. Fluid Handling order backlog was $327 million at December 31, 2012, compared to $331 million at September 30, 2012 and $314 million at December 31, 2011.

Controls

               
Fourth Quarter Change
(dollars in millions) 2012 2011
 
Sales $20.8 $22.2 ($1.4) -6%
 
Operating Profit $2.3 $2.3 ($0.0) -2%
 
Profit Margin 11.1% 10.5%
 

Fourth quarter 2012 sales of $20.8 million decreased 6% compared to the fourth quarter of 2011, reflecting slightly weaker industrial demand. Operating profit was flat, as deleverage on the lower sales was offset by productivity gains.

Updated 2013 Guidance

The Company revised its preliminary 2013 guidance which was provided on December 20, 2012. The updated guidance reflects lower pension expense associated with the curtailment of the Company’s U.S. defined benefit pension plan, as well as a slightly reduced outlook for 2013 core sales growth of between 1% and 3% (excluding acquisition and foreign exchange impacts). Earnings per share in 2013 are now estimated to be in a range of $4.10 to $4.30, representing an increase of 11%-16% over 2012 earnings per diluted share of $3.70 (before Special Items and on a continuing operations basis, which excludes profits from discontinued operations of $0.05 per share in 2012). The 2013 guidance does not include potential impacts from the pending acquisition of MEI. Excluding inventory step-up and one-time transaction and integration costs, the Company expects MEI to be accretive to earnings within the first year of acquisition by approximately $. 25 per share, including $. 05 in synergies. The Company expects 2013 free cash flow (cash provided by operating activities less capital spending) to be in the range of $190 - $220 million, including the effect of asbestos related cash flows.

Segment-specific sales and operating profit guidance will be provided at the Company’s Investor Day conference on February 27, 2013.

Please see the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 29, 2013 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.

Crane Co. Investor Day

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

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and subsequent reports filed with the Securities and Exchange Commission.

 
CRANE CO.
Income Statement Data
(in thousands, except per share data)
       

 

Three Months Ended

 

Twelve Months Ended

 

December 31,

 

December 31,

2012 2011 2012 2011
Net Sales:
Aerospace & Electronics $ 176,081 $ 171,973 $ 701,208 $ 677,663
Engineered Materials 46,900 45,037 216,503 220,071
Merchandising Systems 94,160 86,204 371,901 373,907
Fluid Handling 291,884 294,386 1,195,501 1,140,315
Controls 20,763   22,204   93,955   88,413  
Total Net Sales $ 629,788   $ 619,804   $ 2,579,068   $ 2,500,369  
 
Operating Profit (Loss) from Continuing Operations:
Aerospace & Electronics $ 39,181 $ 38,785 $ 156,015 $ 145,624
Engineered Materials 3,344 4,562 24,522 29,754
Merchandising Systems 10,447 7,705 33,771 30,337
Fluid Handling 39,247 38,329 148,167 149,803
Controls 2,300 2,336 12,813 11,228
Corporate (18,336 ) (13,748 ) (64,847 ) (58,201 )
Asbestos Provision - (241,647 ) - (241,647 )
Environmental Provision -   (30,327 ) -   (30,327 )
Total Operating Profit (Loss) from Continuing Operations 76,183 (194,005 ) 310,441 36,571
 
Interest Income 587 514 1,879 1,635
Interest Expense (6,717 ) (6,730 ) (26,831 ) (26,255 )

Miscellaneous - Net

(180 ) (452 ) (884 )

2,810*

 
Income (Loss) from Continuing Operations Before Income Taxes 69,873 (200,673 ) 284,605 14,761
Provision for Income Taxes 23,901   (74,991 ) 88,416   (8,055 )
Income (Loss) from Continuing Operations 45,972 (125,682 ) 196,189 22,816
 
Profit from Discontinued Operations attributable to common shareholders (a) - 1,350 3,777 5,693
Gain from Sales of Discontinued Operations attributable to common shareholders (b) - - 29,445 -
 
Profit from Discontinued Operations attributable to common shareholders, net of tax (a) - 878 2,456 3,700
Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax (b) -   -   19,176   -  
Gain / Profit from Discontinued Operations, net of tax - 878 21,632 3,700
 
Net income (loss) before allocation to noncontrolling interests 45,971 (124,805 ) 217,821 26,516
 
Less: Noncontrolling interest in subsidiaries' earnings 327 324 828 201
       
Net income (loss) attributable to common shareholders $ 45,644   $ (125,129 ) $ 216,993   $ 26,315  
 
Share Data:
Earnings (Loss) per share from Continuing Operations $ 0.79 $ (2.18 ) $ 3.35 $ 0.38
Earnings per share from Discontinued Operations -   0.02   0.37   0.06  
Earnings (Loss) per Diluted Share $ 0.79   $ (2.16 ) $ 3.72   $ 0.44  
 
Average Diluted Shares Outstanding 57,783 57,903 58,293 59,204
Average Basic Shares Outstanding 57,008 57,903 57,443 58,120
 

Supplemental Data:

Cost of Sales $ 417,569 $ 417,950 $ 1,708,240 $ 1,653,238
Asbestos Provision 241,647 241,647
Environmental Provision 30,327 30,327
Selling, General & Administrative 131,505 123,885 539,755 538,586
Repositioning Charges 4,531 - 20,632 -
Depreciation and Amortization ** 14,141 15,735 57,263 62,943
Stock-Based Compensation Expense 4,459 3,840 17,319 14,972
 
* Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011.
** Amount included within cost of sales and selling, general & administrative costs.
 
(a) Amounts represent the operating profit, and after-tax profit, from the Houston Service Center and Azonix Corporation businesses divested in June 2012.
(b) Amounts represent the pre-tax and after-tax gains from the June 2012 sales of both the Houston Service Center and the Azonix Corporation.
 
 

CRANE CO.

Condensed Balance Sheets

(in thousands)

   
December 31, December 31,
2012 2011
 

ASSETS

Current Assets
Cash and Cash Equivalents $ 423,947 $ 245,089
Accounts Receivable, net 333,330 349,250
Current Insurance Receivable - Asbestos 33,722 16,345
Inventories, net 352,725 360,689
Other Current Assets 36,797 60,859

Total Current Assets

1,180,521 1,032,232
 
Property, Plant and Equipment, net 268,283 284,146
Long-Term Insurance Receivable - Asbestos 171,752 208,952
Other Assets 455,530 497,377
Goodwill 813,792 820,824
 
Total Assets $ 2,889,878 $ 2,843,531
 

LIABILITIES AND EQUITY

Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt $ 1,123 $ 1,112
Accounts Payable 182,731 194,158
Current Asbestos Liability 91,670 100,943
Accrued Liabilities 220,678 226,717
Income Taxes 15,686 10,165

Total Current Liabilities

511,888 533,095
 
Long-Term Debt 399,092 398,914
Long-Term Deferred Tax Liability 36,853 41,668
Long-Term Asbestos Liability 704,195 792,701
Other Liabilities 310,474 255,097
 
Total Equity 927,376 822,056
 
Total Liabilities and Equity $ 2,889,878 $ 2,843,531
 
 

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

   
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  

Operating Activities:

Net income attributable to common shareholders $ 45,644 $ (125,129 ) $ 216,993 $ 26,315
Noncontrolling interest in subsidiaries' earnings   327     324     828     201  
Net income before allocations to noncontrolling interests 45,971 (124,805 ) 217,821 26,516
Asbestos Provision - 241,647 - 241,647
Environmental charge - 30,327 - 30,327
Gain on divestiture - - (29,445 ) (4,258 )
Restructuring - Non Cash 1,078 - 3,855 -
Depreciation and amortization 14,141 15,735 57,263 62,943
Stock-based compensation expense 4,459 3,840 17,319 14,972
Defined benefit plans and postretirement expense 5,321 1,959 20,090 6,770
Deferred income taxes 30,583 (66,574 ) 55,000 (43,923 )
Cash provided by (used for) operating working capital 81,146 34,957 1,824 (41,955 )
Defined benefit plans and postretirement contributions (1,041 ) (31,059 )

*

(5,504 ) (48,113 )
Environmental payments, net of reimbursements (2,115 ) (799 ) (13,371 ) (9,534 )
Other   (6,134 )   (366 )   (12,139 )   (6,303 )
Subtotal 173,409 104,862 312,713 229,089
Asbestos related payments, net of insurance recoveries   (17,906 )   (20,044 )   (77,957 )   (79,277 )
Total provided by operating activities   155,503     84,818     234,756     149,812  
 

Investing Activities:

Capital expenditures (9,364 ) (7,034 ) (29,308 ) (34,737 )
Proceeds from disposition of capital assets 4,184 73 6,438 4,793
Payment for acquisition, net of cash acquired - (996 ) - (36,590 )
Proceeds from divestiture   480     -     54,079     1,000  
Total provided by (used for) investing activities   (4,700 )   (7,957 )   31,209     (65,534 )
 

Financing Activities:

Dividends paid (15,976 ) (15,035 ) (61,974 ) (56,992 )
Reacquisition of shares on open market - (30,000 ) (49,991 ) (79,999 )
Stock options exercised - net of shares reacquired 4,630 3,295 13,056 23,232
Excess tax benefit from stock-based compensation 370 391 3,603 6,097
Change in short-term debt   -     333     -     (1,003 )
Total used for financing activities   (10,976 )   (41,016 )   (95,306 )   (108,665 )
 

Effect of exchange rate on cash and cash equivalents

  3,584     (1,939 )   8,199     (3,465 )

Increase (decrease) in cash and cash equivalents

143,411 33,906 178,858 (27,852 )

Cash and cash equivalents at beginning of period

    280,536     211,183     245,089       272,941  

Cash and cash equivalents at end of period

  $ 423,947   $ 245,089   $ 423,947     $ 245,089  
 

* Includes a $30 million discretionary pension contribution.

 
       
CRANE CO.
Order Backlog
(in thousands)
 
December 31, September 30, June 30, March 31, December 31,
2012 2012   2012   2012   2011
 
Aerospace & Electronics $ 378,152 $ 392,862 $ 423,282 $ 437,822 $ 410,794
Engineered Materials 12,689 11,357 13,884 11,129 11,110
Merchandising Systems 14,686 19,957 23,587 30,033 15,212
Fluid Handling 326,863 330,824 334,696 337,538 * 313,715 *
Controls   16,507   17,296     16,187     29,770 **   27,120 **
Total Backlog $ 748,897 $ 772,296   $ 811,636   $ 846,292   $ 777,951
 
* Includes Order Backlog of $2.9 million at March 31, 2012 and $1.9 million at December 31, 2011 pertaining to a business divested in June 2012.
 

** Includes Order Backlog of $11.3 million at March 31, 2012 and $9.6 million at December 31, 2011 pertaining to a business divested in June 2012.

 
 
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
           
Three Months Ended Twelve Months Ended Percent Change Percent Change
December 31, December 31, December 31, 2012   December 31, 2012
  2012     2011     2012     2011   Three Months   Twelve Months

INCOME ITEMS

 

 
Net Sales $ 629,788 $ 619,804 $ 2,579,068 $ 2,500,369 1.6 % 3.1 %
 
 
Operating Profit (Loss) from Continuing Operations 76,183 (194,005 ) 310,441 36,571 N/A 748.9 %
Percentage of Sales 12.1 % -31.3 % 12.0 % 1.5 %
 

Special Items impacting Operating Profit (Loss) from Continuing Operations:

 
Repositioning Charges (a) 4,531 20,632
 
Asbestos Provision - Pre-Tax (b) 241,647 241,647
 
Environmental Provision - Pre-Tax (c) 30,327 30,327
 
Non-deductible Acquisition Transaction Costs (d) 3,874 3,874
       
Operating Profit from Continuing Operations before Special Items $ 84,588   $ 77,969   $ 334,947   $ 308,545   8.5 % 8.6 %
 
Percentage of Sales 13.4 % 12.6 % 13.0 % 12.3 %
 
 
Net Income (Loss) Attributable to Common Shareholders $ 45,644 $ (125,129 ) $ 216,993 $ 26,315
Per Diluted Share $ 0.79 $ (2.16 ) $ 3.72 $ 0.44 N/A 737.5 %
 

Special Items impacting Net Income (Loss) Attributable to Common Shareholders:

 
Repositioning Charges - Net of Tax (a) 3,896 16,724
Per Share $ 0.07 $ 0.29
 
Asbestos Provision - Net of Tax (b) 157,071 157,071
Per Share $ 2.71 $ 2.65
 

Environmental Provision - Net of Tax (c)

19,713 19,713
Per Share $ 0.34 0.33
 
Non-deductible Acquisition Transaction Costs (d) 3,874 3,874
Per Share $ 0.07 $ 0.07
 
Gain on Divestitures - Net of Tax (e) (19,176 )
Per Share $ (0.33 )
       
Net Income Attributable To Common Shareholders Before Special Items $ 53,414   $ 51,654   $ 218,416   $ 203,098   3.4 % 7.5 %
Per Diluted Share $ 0.92 $ 0.88 $ 3.75 $ 3.43 5.3 % 9.2 %
 
Profit from Discontinued Operations attributable to common shareholders, net of tax (f) - (878 ) (2,456 ) (3,700 )
Per Share $ (0.01 ) $ (0.04 ) $ (0.06 )
       
Net Income Attributable To Common Shareholders Before Special Items from Continuing Operations $ 53,414   $ 50,776   $ 215,960   $ 199,398  
Per Diluted Share $ 0.92 $ 0.86 $ 3.70 $ 3.37 7.1 % 10.0 %
 
In the three months ended December 31, 2011, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since this period was in a loss position. Had Net Income Attributable To Common Shareholders been reported for this period, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).
       
Average Basic Shares Outstanding 57,903
Effect of Diluted Stock Options

915

Average Shares Outstanding including the effect of Stock Options

    58,818

 
(a) The Company incurred repositioning charges in the second quarter, third quarter and fourth quarter of 2012, associated with productivity actions. The charges included severance and impairment costs related to the shutdown of certain facilities, the transfer of certain manufacturing operations, staff reduction actions and a pension curtailment charge.
 
(b) During the three months ended December 31, 2011, the Company recorded an Asbestos Provision.
 
(c) During the three months ended December 31, 2011, the Company recorded a charge related to an increase in the Company's expected liability at its Goodyear, AZ Superfund Site.
 
(d) During the three months ended December 31, 2012, the Company recorded non-deductible transaction costs associated with the potential acquisition of MEI.
 
(e) In June 2012, the Company divested of a business within the Fluid Handling segment (Houston Service Center) and a business within the Controls segment (Azonix Corporation). The associated gains were included in the “Gain from Sale of Discontinued Operations attributable to common shareholders, net of tax" section on the accompanying Income Statement Data. In September 2012, the Company recorded a favorable price adjustment associated with the Azonix Corporation divestiture.
 
(f) Amounts represent the after-tax profit from the Houston Service Center and Azonix Corporation businesses divested in June 2012.
         
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
 

CASH FLOW ITEMS

Cash Provided from Operating Activities before Asbestos - Related Payments

$ 173,409 $ 104,862 $ 312,713 $ 229,089
Asbestos Related Payments, Net of Insurance Recoveries   (17,906 )   (20,044 )   (77,957 )   (79,277 )
Cash Provided from Operating Activities 155,503 84,818 234,756 149,812
Less: Capital Expenditures   (9,364 )   (7,034 )   (29,308 )   (34,737 )
Free Cash Flow $ 146,139   $ 77,784   $ 205,448   $ 115,075  

 

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

 
 
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance.
 
In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on the Company's long-term debt. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
 
Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

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

Source: Crane Co.

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