SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15 (d) of the
Securities and Exchange Act of 1934
For Year Ended December 31, 1999
A. Full title of the plan and the address of the plan if different from that
of the issuer named below:
CRANE CO. UNION EMPLOYEES SAVINGS
AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CRANE CO.
100 First Stamford Place
Stamford, Connecticut 06902
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<TABLE>
CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
<S> <C>
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for
Benefits as of December 31, 1999 and 1998 2
Statements of Changes in Net Assets
Available for Benefits for the years ended
December 31, 1999 and 1998 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1999 AND FOR THE YEAR ENDED
DECEMBER 31, 1998
Schedule H - Schedule of Assets Held for Investment Purposes 10
Schedule H - Schedule of Reportable Transactions 11
Exhibit 23.1 - Consent of Independent Auditors 12
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INDEPENDENT AUDITORS' REPORT
Crane Co. Union Employees Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of the Crane Co. Union Employees Savings and Investment Plan (the "Plan") as of
December 31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1999
and 1998, and the changes in its net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of (1) assets held for investment purposes as of December 31, 1999 and (2)
reportable transactions for the year ended December 31, 1999 are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to
the auditing procedures applied in our audit of the basic 1999 financial
statements and, in our opinion, are fairly stated in all material respects when
considered in relation to the basic 1999 financial statements taken as a whole.
Deloitte & Touche LLP
Stamford, Connecticut
June 20, 2000
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<S> <C> <C>
1999 1998
---- ----
ASSETS
INVESTMENTS, AT FAIR VALUE:
Vanguard Money Market Reserves - Prime
Portfolio $135,882 $130,827
Vanguard Retirement Savings Trust 70,258 85,638
Vanguard/Windsor II 121,441 97,588
Crane Co. Stock Fund 46,576 57,317
Vanguard/Wellington Fund 312,963 277,577
Vanguard/Morgan Growth Fund 14,655 1,748
Vanguard Fixed Income Securities -
Long-Term Corporate Portfolio 10,448 3,273
Vanguard Index Trust - 500 Portfolio 72,646 8,320
Vanguard/PRIMECAP Fund 20,016 4,054
Loan Fund 61,515 24,074
------- -------
Total investments 866,400 690,416
------- -------
RECEIVABLES:
Company contributions 1,551 3,976
Employee contributions 22,171 10,181
------ ------
Total receivables 23,722 14,157
------ ------
LIABILITIES NONE NONE
-----------
NET ASSETS AVAILABLE FOR BENEFITS $890,122 $704,573
======== ========
See notes to financial statements.
</TABLE>
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED
DECEMBER 31, 1999 and 1998
<S> <C> <C>
1999 1998
---- ----
CONTRIBUTIONS:
Employee $231,882 $133,393
Company 18,766 21,451
------- -------
Total contributions 250,648 154,844
------- -------
EARNINGS ON INVESTMENTS:
Interest and dividends 61,142 53,154
Net (depreciation) appreciation in fair value of
investments (44,031) 2,359
------- ------
Total earnings on investments 17,111 55,513
------- ------
DISTRIBUTIONS TO PARTICIPANTS (82,040) (28,955)
ADMINISTRATIVE AND OTHER EXPENSES (170) (3,415)
------- -------
NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
185,549 177,987
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 704,573 526,586
------- -------
NET ASSETS AVAILABLE FOR BENEFITS
End of year $890,122 $704,573
======== ========
See notes to financial statements.
</TABLE>
3
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements For Years ended December 31, 1999 and 1998
1. DESCRIPTION OF THE PLAN
The following is a brief description of the Crane Co. Union Employees
Savings and Investment Plan ("the Plan"). Participants should refer to the
Plan agreement and amendments for more complete information.
A. General - The Plan is a defined contribution plan covering certain United
States bargaining employees of Crane Co. and its subsidiaries (the
"Company"). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
B. Plan Amendments - The predecessor plan was The Mark Controls 401(k) Savings
Plan and was amended effective January 1, 1998 renaming the Plan as the
Crane Co. Union Employees Savings and Investment Plan. Effective January 1,
1998 the Plan became available to those Crane Co. collective bargaining
units who negotiated inclusion in the Plan. The benefits delivered vary by
union group and are dependent upon the negotiated terms through the
collective bargaining process.
C. Administration of the Plan - The authority to manage, control and interpret
the Plan is vested in the Administrative Committee (the "Committee"). The
Committee, which is appointed by the Board of Directors of the Company,
appoints the Plan Administrator and is the named fiduciary within the
meaning of the Employee Retirement Income Security Act of 1974.
D. Changes in the Plan - The Plan received a distribution on December 16,
1999, of the common shares of the Company's wholly-owned subsidiary, Huttig
Building Products, Inc. (the "Huttig Distribution") which was distributed
pro rata to holders of record of Crane Co. common stock at the close of
business on December 8,1999.
Upon the Huttig Distribution, these shares of Huttig common stock were
immediately sold and the proceeds used to purchase additional shares of
Crane Co. common stock, in which participants became 100% vested.
E. Participation - Subject to certain conditions, U.S. union employees of
Crane Washington (effective 1998); Powers Process (effective 1995);
Dyrotech Industries (effective 1998) and Kemlite Company Inc. (effective
1998); are eligible to participate in the Plan following completion of one
year of service, as defined in the Plan document. Employees are eligible to
participate in the Plan on the first day of the month coincident with or
next following their date of hire.
Contributions and Funding Policy - Participants may elect to contribute to
the Plan from two to sixteen percent of their annual compensation.
Contributions are invested in short-term, stock, equity, bond, company
stock or fixed income funds selected by the participant. The Company
matching benefits vary by union group and are dependent upon the negotiated
terms through the collective bargaining process. In accordance with the
Internal Revenue Code, participant pretax contributions could not exceed
$10,000 in 1999 and in 1998. Discrimination tests are performed yearly. Any
discrepancies in passing the threshold would result in refunds to the
participants.
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G. Expenses - Administrative expenses of the Plan (except those associated
with the Crane Co. Stock Fund) are paid by the employer. In addition
personnel and facilities of the employer used by the Plan for its
accounting and other activities are provided at no charge to the Plan.
Commission fees and administrative expenses incurred by the Crane Co. Stock
Fund are paid by the fund through automatic unit deductions. Participant
loan fees are paid by the participant through automatic payroll deductions.
H. Vesting - Employee contributions are one hundred percent vested.
Vesting for employer contributions are as follows:
<TABLE>
<S> <C>
Years of Service Vested Interest
---------------- ---------------
Less than 1 year None
1 year but fewer than 2 20%
2 years but fewer than 3 40%
3 years but fewer than 4 60%
4 years but fewer than 5 80%
5 years or more 100%
</TABLE>
Participants whose employment terminates by reason of death, permanent
disability or retirement are fully vested. Participants are fully vested
upon the attainment of age sixty-five (65).
I. Distributions - A participant whose employment with the Company terminates
can elect to receive all vested amounts, subject to applicable tax law. A
participant may apply to the Committee for a distribution in cases of
hardship. The Committee has the sole discretion to approve or disapprove
hardship withdrawal requests, in accordance with the Internal Revenue Code.
Any part of a participant's Company contribution portion which is not
vested at the time of termination of employment is forfeited and used to
reduce future Company contributions.
J. Plan Termination - The Company expects to continue the Plan indefinitely,
but reserves the right to modify, suspend or terminate the Plan at any
time, which includes the right to vary the amount of, or to terminate, the
Company's contributions to the Plan. In the event of the Plan's termination
or discontinuance of contributions thereunder, the interest of each
participant in benefits accrued to such date, to the extent then funded, is
fully vested and nonforfeitable. Subject to the requirements of the
Internal Revenue Code, the Committee shall thereupon direct either (i) that
the Trustee continues to hold the accounts of participants in accordance
with the provisions of the Plan without regard to such termination until
all funds in such accounts have been distributed in accordance with such
provisions, or (ii) that the Trustee immediately distribute to each
participant all amounts then credited to their account as a lump sum.
K. Tax Status - "The Company adopted a non-standardized prototype plan which
received an Internal Revenue Service opinion letter dated September 12,1994
and the Internal Revenue Service has determined and informed the Company by
letter dated June 1,1995 that the Plan, as adopted, and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (the "Code"). The Plan has been amended since receiving its
determination letter. However, the Plan Administrator believes that the
plan is currently being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the plan's financial statements."
5
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L. Rollovers and Transfers from Other Plans - Rollovers and transfers from
other qualified plans are accepted by the Plan. Rollovers and transfers
represent contributions of assets from other qualified plans of companies
acquired by Crane Co. and participant account balances of new employees
from other non-company qualified plans.
M. Participant Loan Fund - Some participants (depending on negotiated union
plan) may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account
balance. Loan transactions are treated as a transfer between the investment
fund and the Loan Fund. Loan terms range from 1-5 years or up to 10 years
for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at the prevailing
prime lending rate on the first day of the Plan year plus 2 percent.
Principal and interest are paid ratably through regular payroll deductions.
N. Investment Funds
The Plan provides the following funds in which participants can elect to
invest their Plan assets:
Vanguard Money Market Reserves - Prime Portfolio - A diversified portfolio
of money market instruments such as: domestic certificates of deposit and
bankers' acceptances, commercial paper rated A1/P1 or better, U.S. Treasury
and Government Agency securities and repurchase agreements on such
securities and up to 50 percent of approved foreign banks net assets in
Eurodollar certificates of deposit issued by approved U.S.banks and Yankee
obligations. The intent is to maintain a constant net asset value of $1.00
per share.
Vanguard Retirement Savings Trust - Tax-exempt collective trust invested
primarily in guaranteed investment contracts issued annually by insurance
companies and commercial banks, and similar types of fixed principal
investments. The intent is to maintain a constant net asset value of $1.00
per share. Plan assets in the Retirement Savings Trust are recorded at
contract value (which represents contributions made under the contract plus
earnings, less withdrawals and administrative expenses) because they are
fully benefit responsive. The average yield was approximately 6% during
both 1999 and 1998. The crediting interest rate was approximately 6% at
December 31, 1999 and 1998. Fair value of Plan assets invested was $70,258
and $85,638 at December 31, 1999 and 1998, respectively. The fair value of
the Trust's assets approximated contract value at December 31,1999 and
1998.
Vanguard/Windsor II - A diversified portfolio of equity securities seeking
to provide long-term growth of capital and income. Its secondary objective
is to provide a reasonable level of current income.
6
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Crane Co. Stock Fund - Investments in the common stock of Crane Co.
Vanguard/Wellington Fund - A diversified portfolio of equity and fixed
income securities aimed at conserving capital, providing reasonable levels
of current income and profits without undue risks. Generally, 60-70% of net
assets are allocated to equities and 30-40% to fixed income securities.
Vanguard/Morgan Growth Portfolio - A diversified portfolio of equity
securities seeking to provide long-term growth of capital; dividend income
is incidental.
Vanguard Fixed Income Securities - Long-Term Corporate Portfolio - A
diversified portfolio of long-term investment-grade bonds seeking to
provide a high and sustainable level of current income consistent with the
maintenance of principal and liquidity by investing in a diversified
portfolio of long-term investment-grade bonds.
Vanguard Index Trust - 500 Portfolio - A broadly diversified portfolio of
equity securities seeking to provide investment results that parallel the
performance of the Standard & Poor's 500 Composite Stock Price Index. Given
this objective, the portfolio is expected to provide long-term growth of
capital and income as well as a reasonable level of current income.
Vanguard/PRIMECAP Fund - A diversified portfolio of equity securities
seeking to provide long-term growth of capital; dividend income is
incidental.
The Trustee may, at its discretion, keep any portion of the above-mentioned
investment programs in cash or short-term commercial paper to accommodate
withdrawals and administrative fees or deposit all or any part of such
funds in a "General Account" pending further instruction by participants.
2. SUMMARY OF ACCOUNTING POLICIES
The following is a summary of the significant accounting and reporting
policies followed in preparation of the financial statements of the Plan.
A. The financial statements of the Plan have been prepared using the accrual
basis of accounting.
B. Investment Valuation- Investments in mutual funds are valued at the closing
composite price published for the last business day of the year. The Crane
Co. Stock Fund is valued at the quoted market price of the Company.
Participant loans are valued at cost, which approximates fair value.
7
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Below are the investments whose fair value individually represented 5
percent or more of the Plan's net assets as of December 31, 1999 and 1998:
<TABLE>
<S> <C> <C> <C> <C>
1999 1998
----------------------------- -----------------------------
Principal Market Value Principal Market Value
Amounts ($) Amounts ($)
or or
Shares/Units Shares/Units
----------------------------- -----------------------------
Vanguard Money Market
Reserves-Prime Portfolio 135,882 $135,882 130,827 $130,827
Vanguard/Windsor II 4,863 121,441 3,269 97,588
Vanguard Index Trust 500
Portfolio 537 72,646 - -
Vanguard Retirement
Savings Trust $70,258 70,258 $85,638 85,638
Vanguard/Wellington Fund 11,193 312,963 9,457 277,577
Crane Co. Stock Fund 1,484 46,576 1,272 57,317
</TABLE>
C.Investment Transactions and Investment Income - Investment transactions are
accounted for on the date purchases or sales are executed. Dividend income
is accounted for on the ex-dividend date. Interest income is recorded on
the accrual basis as earned. Total income of each fund is allocated monthly
to participants' accounts within the fund based on the participants'
relative beginning balance. In accordance with Department of Labor
requirements, realized and unrealized gains and losses are determined based
on the fair market value of assets at the beginning of the plan year.
D.Distributions to Participants- Benefit payments are recorded when paid.
E.General - The financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America which require
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and contingent assets and
liabilities at the date of the financial statements, and the reported
amounts of additions and deductions during the reporting period. Actual
results could differ from those estimates.
3. PARTIES-IN-INTEREST
The Plan has investments and transactions with parties-in-interest, those
parties being The Vanguard Group, Crane Co., Huttig Building Products, Inc.
and participants with loan balances.
8
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the Amended and Restated Crane Co. Union
Employees Savings and Investment Plan has duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
ADMINISTRATIVE COMMITTEE OF THE
CRANE CO. UNION EMPLOYEES
SAVINGS AND INVESTMENT PLAN
/S/ G. A. Dickoff
G. A. Dickoff
/S/ A. I. duPont
A. I. duPont
/S/ J. R. Packard
J. R. Packard
/S/ Z. A. Weinberger
Z. A. Weinberger
Stamford, CT
June 28, 2000
9
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
SCHEDULE H - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<TABLE>
<S> <C> <C> <C>
Principal
Amount ($)/
Identity of Issue Shares Cost Market Value
----------------- ---------- ---- ------------
Vanguard Money Market
Reserves-Prime Portfolio* 135,882 $ 135,882 $135,882
Vanguard Retirement
Savings Trust* $70,258 70,258 70,258
Vanguard/Windsor II* 4,863 128,710 121,441
Crane Co. Stock Fund* 1,484 57,720 46,576
Vanguard/Wellington Fund* 11,193 312,001 312,963
Vanguard/Morgan Growth
Fund* 639 13,490 14,655
Vanguard Index Trust -
500 Portfolio* 537 64,843 72,646
Vanguard/PRIMECAP Fund* 322 17,107 20,016
Vanguard Fixed Income
Securities - Long-Term
Corporate Portfolio* 1,288 11,195 10,448
Loans to Participants* - 61,515 61,515
-------- --------
$872,721 $866,400
======== ========
*Represents a party-in-interest to the plan.
</TABLE>
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CRANE CO.UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
SCHEDULE H - SCHEDULE OF REPORTABLE TRANSACTIONS
PERIOD FROM JANUARY 1, 1999 TO DECEMBER 31, 1999
<TABLE>
<S> <C><C> <C> <C>
<C>
Proceeds
Cost of Assets From Cost of Net Gain
Identity of Issue Purchased Sales Assets Sold or (Loss)
----------------- --------- ----- ----------- ---------
Series of Transactions
----------------------
Crane Co. Stock Fund* $21,191 $15,289 $15,668 $(379)
Vanguard Money
Market Reserves
-Prime Portfolio* 33,109 28,054 28,054 -
Vanguard/Windsor II* 54,678 8,016 7,176 840
Vanguard Retiement
Savings Trust* 30,113 45,493 45,493 -
Vanguard/Wellington 121,647 71,203 63,205 7,998
Fund*
Vanguard 500 Index* 59,943 2,875 2,701 174
*Represents a party-in-interest to the plan.
</TABLE>
11
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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-35860 of Crane Co. on Form S-8 of our report dated June 20, 2000
appearing in this Annual Report on Form 11-K of the Crane Co. Union
Employees Savings and Investment Plan for the year ended December 31, 1999.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
June 28, 2000
12
