Crane NXT, Co. — Annual Report 2004

Jun 25, 2004

11-K 1 d11k.htm FORM 11-K Form 11-K

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U.S. 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 fiscal year ended December 30, 2003

A. Full title of the plan and the address of the plan if different from that of the issuer named below:

AMENDED AND RESTATED CRANE CO. 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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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

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	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits as of December 30, 2003 and 2002	2
Statements of Changes in Net Assets Available for Benefits for the Years Ended December 30, 2003 and 2002	3
Notes to Financial Statements	4
SUPPLEMENTAL SCHEDULES
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes at December 30, 2003	9
Form 5500, Schedule H, Part IV, Line 4j – Schedule of Reportable Transactions for the Year Ended December 30, 2003	10
EXHIBITS
Exhibit 23.1 – Consent of Independent Registered Public Accounting Firm

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees and Participants of the Amended and Restated Crane Co. Savings and Investment Plan:

We have audited the accompanying statements of net assets available for benefits of the Amended and Restated Crane Co. Savings and Investment Plan (the “Plan”) as of December 30, 2003 and 2002, 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 the standards of the Public Company Accounting Oversight Board (United States). 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 30, 2003 and 2002, and the changes in 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 assets held for investment purposes at December 30, 2003 and reportable transactions for the year ended December 30, 2003 are presented for the purpose of additional analysis and are not a required part of the basic 2003 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 2003 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic 2003 financial statements taken as a whole.

Deloitte & Touche LLP

Stamford, Connecticut

June 15, 2004

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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

DECEMBER 30, 2003 AND 2002

	2003	2002
ASSETS
INVESTMENTS, AT FAIR VALUE:
Crane Co. Stock Fund	$ 67,522,034	$ 36,245,655
Huttig Stock Fund	636,078	608,286
Jennison Growth Fund Z	27,153,522	9,726,855
Dryden Stock Index Fund I	14,502,481	5,794,627
Wells Fargo Stable Value Fund A	51,026,864	30,554,814
Fidelity Advisors Growth Opportunities Fund T	—	10,452,933
Oppenheimer Enterprise Fund A	—	1,306,230
Putnam International Growth Fund A	8,377,752	4,083,479
Lord Abbett Mid Cap Value Fund A	5,600,188	—
American Balanced Fund A	11,997,708	—
Dreyfus Premier Balanced Fund A	—	6,279,671
Jennison Small Company Fund Z	7,066,061	—
MFS Mid-Cap Growth Fund A	5,098,901	2,639,335
Fidelity Advisor Dividend Growth Fund T	20,415,275	2,300,947
Loan Fund	5,654,434	3,734,417
Total investments	225,051,298	113,727,249
RECEIVABLES:
Company contributions	253,479	291,221
Employee contributions	751,425	815,125
Employee loan payments	112,902	165,489
Total receivables	1,117,806	1,271,835
Total assets	226,169,104	114,999,084
NET ASSETS AVAILABLE FOR BENEFITS	$ 226,169,104	$ 114,999,084

See notes to financial statements.

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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 30, 2003 AND 2002

	2003
CONTRIBUTIONS:
Employee	$ 12,044,751	$	10,984,553
Company	4,082,024		3,749,098
Total contributions	16,126,775		14,733,651
GAIN (LOSS) ON INVESTMENTS, NET:
Interest and dividends	1,474,700		1,257,297
Net appreciation (depreciation) in fair value of investments	33,522,900		(24,456,958	)
Total gain (loss) on investments, net	34,997,600		(23,199,661	)
Distributions to participants	(12,199,327	)	(12,400,680	)
Rollovers and transfers from other plans	72,084,423		9,325,893
Administrative and other income (expenses)	160,549		(99,072	)
Net increase (decrease) in net assets available for benefits	111,170,020		(11,639,869	)
Net assets available for benefits beginning of year	114,999,084		126,638,953
Net assets available for benefits end of year	$ 226,169,104	$	114,999,084

See notes to financial statements.

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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

Notes to Financial Statements

1. DESCRIPTION OF THE PLAN

The following is a brief description of the Amended and Restated Crane Co. Savings and Investment Plan (the “Plan”). Participants should refer to the Plan document and amendments for more complete information.

A. General The Plan is a defined contribution plan covering certain United States of America (“U.S.”) 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 Plan was amended effective January 1, 1997 designating the portion of the Plan invested in the Crane Co. Stock Fund consisting of (a) Company matching contributions, and (b) participants’ deferred savings contributions that participants have elected to invest in the Crane Co. Stock Fund, as an Employee Stock Ownership Plan, as defined in Section 4975 of the Internal Revenue Code (the “Code”). Effective June 1, 1997, employees are eligible to participate in the Plan on the first day of the month coinciding with or following their date of hire. The Plan was amended and restated effective December 31, 2002. Effective December 22, 2003, an amendment was made to the Plan to allow any participant who has a fully vested interest in the participant’s account to be permitted to direct the Plan as to the investment of all or any portion of the participant’s Account balance attributable to Company Stock and allocated to the Company Matching Contribution Stock Fund or the Crane Co. Stock Fund, or any successor fund.

C. Administration of the Plan The authority to manage, control and interpret the Plan is vested in the Administrative Committee (the “Committee”) of the Company. 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 ERISA.

D. Participation Subject to certain conditions, U.S. employees of Crane Co. are eligible to participate in the Plan upon completing the enrollment process following their date of hire.

E. Contributions and Funding Policy Participants may elect to contribute to the Plan from one to twenty-five percent of their annual compensation. The contribution limit for highly compensated employees, those whose earnings equal or exceed $90,000, is limited to seven percent. Participants who have attained age 50 before the close of the Plan Year will be eligible to make Catch-Up Contributions in accordance with, and subject to the limits of, Section 414(v) of the Code. Contributions are invested in funds selected by the participant. The Company contributes on a matching basis an amount equal to 50 percent, of up to the first six percent of each participant’s deferred savings, which is invested in the Crane Co. Stock Fund. In accordance with the Code, participant pretax contributions could not exceed $12,000 in 2003 and $11,000 in 2002. Discrimination tests are performed annually; any test discrepancies would result in refunds to the participants.

F. Expenses Plan administrative expenses (except those associated with the Crane Co. Stock Fund and the Huttig 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 and the Huttig Stock Fund are paid by the respective funds through automatic unit deductions. Participant loan fees are paid by the participant through automatic deductions.

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G. Vesting Employee contributions are 100 percent vested. Vesting for employer contributions are as follows:

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 %

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).

H. Distributions 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 65. 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 unvested Company contribution at the time of termination of employment is forfeited and used to reduce future Company contributions.

I. 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 hereunder, the interest of each participant in benefits earned to such date, to the extent then funded, is fully vested and non-forfeitable. Subject to the requirements of the Code, the Board of Directors shall thereupon direct either (i) The Prudential Trust Company (“Trustee”) 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) the Trustee immediately distribute to each participant all amounts then credited to their account as a lump sum.

J. Tax Status The Internal Revenue Service has determined and informed the Company by letter dated November 14, 2003 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. Although the Plan has been amended since receiving the determination letter, the Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

K. 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.

On December 30, 2003 the ELDEC Corporation and Interpoint Corporation Deferred Income Plan (“ELDEC Plan”) merged into the Plan. The total assets transferred were $58,780,839. The funds existing in the ELDEC Plan were transferred to the comparable investment options of the Plan. The funds in both plans were the same with the exception of the following: the Mutual Qualified Fund CL I was transferred 50% to the Lord Abbett Mid Cap Value Fund and 50% to the MFS Mid-Cap Growth Fund A, and the AIM Balanced Fund CL A was transferred to the American Balanced Fund.

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L. Participant Loan Fund 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 percent of their account balance. Loan transactions are treated as transfers between the investment fund and the Loan Fund. Loan terms range from one to five years or up to 15 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 two percent. Principal and interest are paid ratably through regular payroll deductions.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Investment Valuation Investments in mutual funds are valued at the closing composite price published for the last business day of the year. The Wells Fargo Stable Value Fund A is a collective trust fund that is administered by Wells Fargo Bank, N.A. (the “Bank”). The value of this investment is based on the underlying unit value reported by the Bank. The Crane Co. Stock Fund and Huttig Stock Fund are valued at the quoted market price of the respective company’s common stock. Participant loans are valued at cost, which approximates fair value.

Below are the investments whose fair value individually represented 5% or more of the Plan’s net assets as of December 30, 2003 and 2002:

	2003 — Shares/Units	Market Value	2002 — Shares/Units	Market Value
Crane Co. Stock Fund	2,195,838	$ 67,522,034	1,812,283	$ 36,245,655
Jennison Growth Fund Z	2,037,023	27,153,522	948,961	9,726,855
Dryden Stock Index Fund I	585,959	14,502,481	295,795	5,794,627
Wells Fargo Stable Value Fund A	1,498,520	51,026,864	933,885	30,554,814
Jennison Small Company Fund Z	391,038	7,066,061	—	—
Putnam International Growth Fund A	407,875	8,377,752	250,982	4,083,479
Fidelity Advisors Growth Opportunities Fund T	—	—	471,703	10,452,933
Dreyfus Premier Balanced Fund A	—	—	592,981	6,279,671
American Balanced Fund A	695,519	11,997,708	—	—
Fidelity Advisors Dividend Growth Fund T	1,821,166	20,415,275	—	—

The Plan’s investments, including gains and losses on investments bought and sold, as well as held during the period, appreciated (depreciated) in value as follows:

Mutual Funds	2003 — $ 11,605,589	2002 — $ (15,031,676	)
Common and Collective Funds	1,308,976	1,454,238
Common Stocks	20,608,335	(10,879,520	)
	$ 33,522,900	$ (24,456,958	)

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B. Nonparticipant-Directed Investments

A portion of the Crane Co. Stock Fund is considered a nonparticipant-directed investment for the Plan. Information about the net assets and the significant components of the changes in net assets relating to this investment are as follows:

	December 30, — 2003	2002
Net assets:
Common stock	$ 50,320,538	$ 25,296,118
	Year ended December 30, 2003	Year ended December 30, 2002
Changes in net assets:
Contributions	$ 4,339,644	$ 3,894,003
Dividends	529,354	489,432
Net appreciation (depreciation)	14,507,355	(6,946,328	)
Benefits paid to participants	528,022	436,177
Transfers to participant-directed investments	2,193,435	1,885,218

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 participant’s 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. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates. The Plan utilizes various investment instruments, including mutual funds and investment contracts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

3. RELATED-PARTY TRANSACTIONS

Certain Plan investments are shares of mutual funds managed by Prudential Financial. Prudential Financial is the trustee as defined by the Plan, and, therefore, these transactions qualify as party-in-interest transactions. Fees incurred for investment management services, if any, were paid by the Employer.

At December 30, 2003 and 2002, the Plan held 2,195,838 and 1,812,283 shares, respectively, of common stock of Crane Co., the sponsoring employer, with a cost basis of $44,623,534 and $34,872,091, respectively. During the year ended December 30, 2003 and 2002, the Plan recorded dividend income of $752,761 and $708,737, respectively, related to its investment in the common stock of Crane Co.

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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. Savings and Investment Plan has duly caused this annual report to be signed on its behalf 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
On behalf of the Committee
/s/ A. I. duPont
A.I. duPont
On behalf of the Committee

Stamford, CT

June 25, 2004

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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS HELD

FOR INVESTMENT PURPOSES

DECEMBER 30, 2003

Identity of Issue, Borrower, Lessor or Similar Party	Shares	Cost	Market Value
Crane Co. Stock Fund*	2,195,838	$ 44,623,534	$ 67,522,034
Huttig Stock Fund	218,584	888,574	636,078
Jennison Growth Fund Z*	2,037,023	30,270,792	27,153,522
Dryden Stock Index Fund I*	585,959	14,923,990	14,502,481
Wells Fargo Stable Value Fund A	1,498,520	47,703,129	51,026,864
Lord Abbett Mid Cap Value Fund A	297,566	5,003,522	5,600,188
Jennison Small Company Fund Z	391,038	7,066,061	7,066,061
Putnam International Growth Fund A	407,875	8,299,616	8,377,752
American Balanced Fund A	695,519	10,919,548	11,997,708
MFS Mid-Cap Growth Fund A	652,033	4,912,827	5,098,901
Fidelity Advisor Dividend Growth Fund T	1,821,166	18,343,762	20,415,275
Loans to Participants*
Loans have interest rates ranging from 5.00% to 11.50% and mature in 2004 through 2013 (1,228 loans outstanding).	—	5,654,434	5,654,434
		198,609,789	$ 225,051,298

• Represents a party-in-interest to the plan.

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AMENDED AND RESTATED CRANE CO. SAVINGS AND INVESTMENT PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 30, 2003

Identity of Issue	Cost of Assets Purchased	Proceeds From Sales	Cost of Assets Sold	Net Gain
Series of Transactions
Crane Co. Stock Fund*	$ 5,212,062	$ 6,544,131	$ 5,212,062	$ 1,332,069

• Represents a party-in-interest to the plan.

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