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 the period from December 31, 1998 to December 30, 1999
A. Full title of the plan and the address of the plan if different from that
of the issuer named below:
ELDEC CORPORATION AND INTERPOINT CORPORATION
DEFERRED INCOME 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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ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for
Benefits as of December 30, 1998 and
December 30, 1999 2
Statements of Changes in Net Assets
Available for Benefits for the
years ended December 30, 1998
and December 30, 1999 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE AS OF AND FOR THE YEAR ENDED DECEMBER 30, 1999
Item 27a - Schedule of Assets Held for Investment 14
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INDEPENDENT AUDITORS' REPORT
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN:
We have audited the accompanying statements of net assets available for benefits
of ELDEC Corporation and Interpoint Corporation Deferred Income Plan (the Plan)
as of December 30, 1999 and 1998, and the related statements of changes in net
assets available for benefits for the year ended December 30, 1999 and December
30, 1998. 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 as of December 30,
1999 and 1998, and the changes in net assets available for benefits for the
years ended December 30, 1999 and December 30, 1998, in conformity with
accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying schedule of assets held
for investment as of December 30, 1999 is presented for the purpose of
additional analysis and is 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. This schedule is the responsibility of the Plan's
management. Such schedule has been subjected to the auditing procedures applied
in our audit of the basic 1999 financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
1999 financial statements taken as a whole.
Deloitte & Touche LLP
Seattle, Washington
May 31, 2000
1
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ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 30, 1998 AND DECEMBER 30, 1999
<S> <C> <C>
1998 1999
---- ----
ASSETS
CASH $37 $0
INVESTMENTS, AT FAIR VALUE (Note 2):
Mutual funds 38,137,504 46,682,377
Common and collective funds 5,678,340 7,567,200
Crane Co. common stock 5,533,947 4,406,333
Participant notes receivable 1,421,482 1,835,612
---------- ----------
Total investments 50,771,273 60,491,522
---------- ----------
RECEIVABLES:
Employer contribution receivable 45,614 10,887
Employee contributions 144,587 21,767
------- ------
Total receivables 190,201 32,644
------- ------
NET ASSETS AVAILABLE FOR BENEFITS $50,961,511 $60,524,176
=========== ===========
See notes to financial statements.
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2
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ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 30,
1998 AND DECEMBER 30, 1999
<S> <C> <C>
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1998 1999
---- ----
CONTRIBUTIONS:
Employee $4,142,119 $4,064,628
Employer 1,307,342 1,269,757
Rollovers 7,691,509 517,367
--------- -------
Total contributions 13,140,970 5,851,752
---------- ---------
EARNINGS ON INVESTMENTS:
Interest and dividends 499,231 768,689
Net appreciation in fair value of investments
7,578,474 8,920,584
--------- ---------
Total earnings on investments 8,077,705 9,689,273
--------- ---------
BENEFITS PAID TO PARTICIPANTS (3,805,827) (5,978,360)
ADMINISTRATIVE EXPENSE AND OTHER (123,668) 0
---------- ----------
(3,929,495) (5,978,360)
NET INCREASE IN NET ASSETS AVAILABLE 17,289,180 9,562,665
FOR BENEFITS
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 33,672,331 50,961,511
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS
End of year $50,961,511 $60,524,176
=========== ===========
See notes to financial statements.
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3
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ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
Notes to Financial Statements For the Years Ended December 30, 1998 and
December 30, 1999
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1. DESCRIPTION OF THE PLAN
The following description of the Eldec Corporation and Interpoint Corporation
Deferred Income Plan (the Plan) provides only general information. Participants
should refer to the Plan document for more complete information regarding the
Plan's provisions.
General: The Plan is a defined contribution plan covering all employees of
Eldec Corporation and Interpoint Corporation (collectively, the Corporation).
The Corporation is a wholly-owned subsidiary of Crane Co. The Plan is subject
to the terms of the Employee Retirement Income Security Act of 1974 (ERISA).
Eligibility: All employees of the Corporation are eligible upon their hire
date.
Contributions: Until October 1, 1998, each year, participants could elect to
contribute and defer between 1% and 15% of pretax annual compensation as
defined by the Plan. Effective October 1, 1998, the percentage election
increased to 17%. Such employee contributions may not exceed the maximum
allowable contribution under IRC regulations. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or contribution plans. The Corporation matches 50% of each
participant's contribution, up to 6% of the participant's salary, made in the
form of common stock of Crane Co.
During the year ended December 30, 1998, the Interpoint Corporation
Retirement & Savings Plan was terminated and all assets were transferred into
the Plan. The total amount transferred of approximately $7,342,000 is
included in Rollovers in the Statement of Changes in Net Assets Available for
Benefits.
Participant accounts: Each participant's account is credited with the
participant's contributions and allocations of the Corporation's matching
contribution and Plan earnings and charged with an allocation of management
fees not paid by the Corporation.
Vesting: A participant's deferred income contribution account and
Corporation matching contributions are 100% vested and nonforfeitable at
all times.
Participant notes receivable: Actively employed participants may borrow from
their fund accounts a minimum of $1,000 up to a maximum equal to the lesser
of $50,000 or 50% of their account balance. Loan terms, subject to approval
by the Administration Committee (the Committee), range from 1 to 5 years, or
up to 15 years for the purchase of a primary residence. The interest rate on
loans is 1% above the Wall Street prime lending rate on the first business
day of the calendar quarter in which the loan is made.
4
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Payment of benefits: Upon retirement, disability, termination of employment
or death, a participant or designated beneficiary will receive a lump sum
payment equal to the participant's account balance. If the participant's
account balance is greater than $5,000, the participant may elect to defer
the withdrawal until reaching the age of 70-1/2.
Plan termination: Although it has not expressed any intent to do so, the
Corporation has the right to terminate the Plan at any time subject to the
provisions of ERISA. In the event the Plan is terminated, the Plan's assets
will be liquidated by the Trustee and distributed to participants.
Tax status: The Internal Revenue Service has determined and informed the
Corporation, by a letter dated May 5, 1994, that the Plan is designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan has been amended and restated since receiving the determination letter
and the Plan Administrator is currently in the process of filing for a new
determination letter. The Plan Administrator believes the Plan, as amended
and restated, is currently being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
recorded.
Investment funds: Plan participants may direct investment of their accounts
in any of several funds in such increments and at such times as designated by
the Investment Committee appointed by the Crane Co. Board of Directors. The
investment options available as of December 30, 1999 are as follows:
Norwest Stable Value Fund This fund invests primarily in Guaranteed
Investment Contracts ("GICs") but may also invest in U.S. Treasury
obligations and money market instruments. A GIC is issued by a major life
insurance company to retirement plans. GICs offer safety, stability and
relatively high income. Although GICs do not experience market fluctuations,
they do not have U.S. Government backing. It is the insurance company that
guarantees the investment rate and return of principal at full value. The
objective of this fund is to earn a predictable investment return that is
somewhat higher than overall money market rates, with a minimum chance of
loss of the original contributions. The risk and return characteristics of
this fund are that it is low risk with low to moderate long-term growth
potential. Interest on the invested money provides the investment return.
AIM Balanced Fund Class A This fund is a mutual fund with a balanced
portfolio which seeks to provide reasonable current income and long-term
capital appreciation by investing 60% to 70% of its assets in common stocks
with the remainder held in high-quality corporate bonds and U.S. Government
securities. Stocks are selected on the basis of their current dividends and
potential growth of capital and income. The fund may also invest up to 20% of
its assets in foreign securities. The objective of this fund is to provide
the possibility of long-term investment growth while reducing the risk of
investment loss. The risk and return characteristics of this fund are that it
is moderate risk with moderate long-term growth potential. Dividends,
interest and changes in the values of the shares provide most of the
investment return.
Prudential Stock Index Fund Class Z This fund is a mutual fund which seeks to
match the total return performance of the S&P 500 Stock Index by investing in
all 500 stocks in approximately the same proportions as represented in the
S&P 500 Stock Index. Dominated by large "blue chip" stocks, this unmanaged
index covers about 70% of the total U.S. market capitalization. The very low
turnover in the portfolio's holdings allows the fund to maintain
substantially lower management fees. The objective of this fund is to provide
the possibility of long-term investment growth while reducing the risk of
investment loss. The risk and return characteristics of this fund are that it
is moderate risk with moderate long-term growth potential. Dividends,
interest and changes in the values of the shares provide most of the
investment return.
5
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Prudential Jennison Growth Fund Class Z This fund is a mutual fund, which
seeks long-term growth of capital by investing primarily in established
companies with market capitalizations of at least $1 billion and above
average growth prospects. The fund invests substantially all, but at least
65% of its total assets, in common stocks, convertible securities and other
equity securities. Companies must be currently demonstrating superior
absolute and relative earnings growth and be attractively valued to be
included in this fund's portfolio. The objective of this fund is to provide
the higher rates of return that are associated with stocks, while limiting
the risk associated with stocks by investing in large companies. The risk and
return characteristics of this fund are that it is moderate to high risk with
moderate to high long-term growth potential. Changes in the values of the
shares provide most of the investment return, but the fund also receives
dividends and interest.
Mutual Qualified Fund A This fund is a mutual fund which invests primarily in
medium-sized companies. Its goal is capital appreciation, which may
occasionally be short-term. Income is a secondary objective. The fund invests
in common and preferred stocks, and debt of any credit quality. It may also
invest up to 50% of assets in companies involved in prospective mergers,
consolidations, liquidations, reorganizations, or other special situations.
The objective of the fund is to provide the possibility of short and
long-term investment growth, while reducing the risk of investment loss by
investing in securities that, in the opinion of the fund manager, are priced
at discounts to their intrinsic values. The risk and return characteristics
of this fund are that it is moderate to high risk with moderate to high
long-term growth potential. Changes in values of the shares provide most of
the investment return, but the fund may also receive dividends and interest.
Prudential Small Company Value Fund Class Z This fund is a mutual fund, which
invests primarily in small company stocks with market capitalizations of less
than $500 million to provide long-term capital appreciation. The fund
emphasizes equities that appear undervalued by various measures, such as
price/earnings or price/book ratios. The value approach is intended to be
conservative, but the fund's focus on small company stocks adds substantial
risks. The objective of this fund is to provide the possibility of higher
rates of return than by investing in small companies with greater growth
potential. The risk and return characteristics of this fund are that it is
moderate to very high risk with moderate to very high long-term growth
potential. Changes in the values of the shares provide most of the investment
return, but the fund also receives dividends.
6
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Putnam International Growth Fund Class A This fund is a mutual fund which
seeks capital appreciation by investing at least 65% of its assets in equity
securities of companies located outside the United States. It may invest in
companies of any size that it judges to be in a strong growth trend or that
it believes are undervalued. The fund may invest in both developed and
emerging markets. This fund is considered riskier because of its foreign
stock emphasis. The objective of this fund is to provide higher rates of
return and greater diversification by investing in stocks of international
companies. The risk and return characteristics of this fund are that it is
moderate to very high risk with moderate to very high long-term growth
potential. Changes in the values of the shares provide most of the investment
return, but the fund also receives dividends.
Crane Co. Stock Fund Investments in common stock of Crane Co.
Huttig Co. Stock Fund Investments in common stock of Huttig Co. This
company was a wholly-owned subsidiary of Crane Co. which was spun off from
Crane Co. in 1999 through an initial public offering.
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 30, 1998 and 1999:
<TABLE>
<S> <C> <C>
1998 1999
---- ----
U.S. Trust Company of the Pacific Northwest
Capital Preservation Fund $5,534,855 $0
Norwest Stable Value Fund 143,485 7,567,159
AIM Balanced Fund Class A 5,654,817 5,823,646
Prudential Stock Index Fund Class Z 7,730,360 9,304,773
Prudential Jennison Growth Fund Class Z 17,015,924 23,823,631
Prudential Small Company Value Fund Class Z 5,219,220 3,814,018
Putnam International Growth Fund Class A 2,494,963 3,618,413
Crane Co. Stock Fund* 5,533,947 4,194,912
</TABLE>
*Fund includes non-participant directed amounts.
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.
Basis of accounting: The financial statements of the Plan are prepared under
the accrual method of accounting.
Investment valuation: Investments are stated at fair value based on quoted
market prices. Participant notes receivable are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis with the
cost basis of securities sold determined by specific identification.
Dividend income, interest income and realized gains and losses from
investments are recorded as earned on an accrual basis. The dividend income,
interest income and realized gains and losses are allocated to participant
accounts daily on a cash basis based upon each participant's proportionate
share of assets in each fund. Unrealized gains and losses are allocated to
participants daily based on the participant's proportionate share of assets
in each fund.
8
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Benefit payments: Benefits are recorded when paid. Benefits payable to
participants included in net assets totaled $0 and $1,919 at December 30,
1999 and 1998, respectively. Such amounts are shown as Plan liabilities in
the Form 5500.
Use of estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of additions to, and deductions from, net assets during the
reporting period. Actual results could differ from those estimates.
9
3. PARTIES-IN-INTEREST
The Plan has investments and transactions with parties-in-interest, those
parties being Crane Co., Huttig Co., and participants with loan balances.
10
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4. ALLOCATION OF NET ASSETS AVAILABLE FOR BENEFITS
Allocation by fund of net assets available for benefits at December 30, 1998
and 1999 follows:
<TABLE>
<S> <C> <C>
1998 1999
---- ----
U.S. Trust Company of the Pacific Northwest
Capital Preservation Fund $ 5,534,873 $0
Prudential AP LN Fund 0 387
Norwest Stable Value Fund 158,734 7,572,543
AIM Balanced Fund Class A 5,672,990 5,825,523
Prudential Stock Index Fund Class Z 7,758,127 9,308,973
Prudential Jennison Growth Fund Class Z 17,059,528 23,828,062
Mutual Qualified Fund A 23,574 298,131
Prudential Small Company Value Fund Class Z 5,241,460 3,815,739
Putnam International Growth Fund Class A 2,502,738 3,619,766
Crane Co. Stock Fund* 5,588,006 4,208,020
Huttig Co. Stock Fund* 0 211,420
Loan Fund 1,421,481 1,835,612
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$50,961,511 $60,524,176
</TABLE>
*Fund includes non-participant directed amounts.
5.INFORMATION RELATED TO CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS The
changes in net assets available for benefits by fund for the year ended
December 30, 1998 and December 30, 1999 were as follows:
<TABLE>
<S> <C> <C>
Employee contributions:
1998 1999
---- ----
U.S. Trust Company of the Pacific Northwest
Capital Preservation Fund $330,421 $0
Norwest Stable Value Fund 111,941 448,507
Vanguard Wellington Fund 360,699 0
Prudential AP LN Fund 0 4,256
AIM Balanced Fund Class A 133,619 465,361
Vanguard Institutional Equity Index Fund 535,459 0
Prudential Stock Index Fund Class Z 198,274 817,391
Harbor Capital Appreciation Fund 976,632 0
Prudential Jennison Growth Fund Class Z 322,742 1,352,638
Mutual Qualified Fund A 6,928 44,423
T. Rowe Price Small Cap Value Fund 536,659 0
Prudential Small Company Value Fund Class Z 167,375 523,398
American Funds Europacific Growth Fund 185,232 0
Putnam International Growth Fund Class A 55,390 237,494
Crane Co. Stock Fund* 220,748 171,160
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$ 4,142,119 $4,064,628
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*Fund includes non-participant directed amounts.
</TABLE>
11
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<S> <C> <C>
Net investment income: 1998 1999
---- ----
U.S. Trust Company of the Pacific
Northwest Capital Preservation Fund $302,594 $45,017
Norwest Stable Value Fund 1,235 297,326
Vanguard Wellington Fund 178,027 0
AIM Balanced Fund Class A 796,747 990,940
Vanguard Institutional Equity Index
Fund 188,534 0
Prudential Stock Index Fund Class Z 1,530,620 1,604,221
Harbor Capital Appreciation Fund 81,291 0
Prudential Jennison Growth Fund Class Z 4,978,626 7,128,557
Mutual Qualified Fund A 452 12,342
T. Rowe Price Small Cap Value Fund (1,121,682) 0
Prudential Small Company Value Fund
Class Z 522,980 (263,652)
American Funds Europacific Growth Fund (131,352) 0
Putnam International Growth Fund
Class A 581,422 1,427,305
Crane Co. Stock Fund* 51,956 (1,915,767)
Huttig Co. Stock Fund* 0 212,321
Loan Fund 116,255 150,663
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$8,077,705 $9,689,273
========== ==========
*Fund includes non-participant directed amounts.
</TABLE>
12
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<TABLE>
<S> <C> <C>
Benefits paid to participants: 1998 1999
---- ----
U.S. Trust Company of the Pacific
Northwest Capital Preservation Fund $847,244 $227,821
Prudential AP LN Fund - 5,248
Norwest Stable Value Fund - 659,089
Vanguard Wellington Fund 372,290 -
AIM Balanced Fund Class A - 660,205
Vanguard Institutional Equity Index
Fund 323,907 -
Prudential Stock Index Fund Class Z - 1,031,052
Harbor Capital Appreciation Fund 964,171 -
Prudential Jennison Growth Fund Class Z - 1,593,655
American Funds Europacific Growth Fund 156,698 -
T. Rowe Price Small Cap Value Fund 636,498 -
Mutual Qualified Fund A - 9,060
Prudential Small Company Value Fund
Class Z - 512,777
Putnam International Growth Fund
Class A - 458,914
Crane Co. Stock Fund* 450,165 679,223
Loan Fund 54,854 141,316
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$3,805,827 $5,978,360
========== ==========
*Fund includes non-participant directed amounts.
</TABLE>
13
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the ELDEC CORPORATION AND INTERPOINT CORPORATION
DEFERRED INCOME PLAN has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
ADMINISTRATIVE COMMITTEE OF THE
AMENDED AND RESTATED CRANE CO.
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
Lynnwood, WA
June 15, 2000
14
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ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 30, 1999
<TABLE>
<S> <C> <C>
Identity of Issue Cost Current Value
----------------- ----- -------------
Collective Funds:
----------------
Norwest Stable Value Fund $7,314,788 $7,567,159
Mutual Funds:
------------
AIM Balanced Fund Class A 4,493,439 5,823,646
Prudential Stock Index Fund Class Z 6,972,529 9,304,773
Prudential Jennison Growth Fund Class Z 19,646,369 23,823,631
Mutual Qualified Fund A 313,042 297,938
Prudential Small Company Value Fund Class Z 3,705,969 3,814,018
Putnam International Growth Fund Class A 2,096,491 3,618,413
Crane Co. Stock Fund* (215,123 shares) 4,836,947 4,194,912
Huttig Co. Stock Fund* 248,377 211,420
Participant notes receivable 1,835,612 1,835,612
----------- -----------
$51,463,563 $60,491,522
=========== ===========
*Represents a party-in-interest to the plan.
</TABLE>
15
