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, 2001
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
CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for
Benefits as of December 31, 2001 and
2000 2
Statements of Changes in Net Assets
Available for Benefits for the years ended
December 31, 2001 and 2000 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes as of December 31, 2001 12
Exhibit 23.1 - Consent of Independent Auditors 13
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, 2001 and 2000, 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, 2001
and 2000, 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 schedule of
assets held for investment purposes as of December 31, 2001 is presented for the
purpose of additional analysis and is not a required part of the basic 2001
financial statements, but is 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. This schedule has been subjected to the
auditing procedures applied in our audit of the basic 2001 financial statements
and, in our opinion, is fairly stated in all material respects when considered
in relation to the basic 2001 financial statements taken as a whole.
Deloitte & Touche LLP
Stamford, Connecticut
June 25, 2002
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CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
2001 2000
---- ----
ASSETS
INVESTMENTS, AT FAIR VALUE:
Crane Co. Stock Fund $19,322 $18,059
Prudential Jennison Growth Fund Z 148,934 79,590
Prudential Stock Index Fund Z 82,627 104,084
Wells Fargo Stable Return Fund 740,361 327,761
Fidelity Advisors Growth Opportunities Fund T 83,991 127,509
Oppenheimer Enterprise Fund A 21,364 42,032
Putnam International Growth Fund A 88,142 22,791
Dreyfus Premier Balanced Fund A 200,644 158,170
MFS Mid-Cap Growth Fund A 84,716 -
Fidelity Advisor Dividend Growth Fund T 172,673 -
Loan Fund 65,621 35,989
--------- ---------
Total investments 1,708,395 915,985
--------- ---------
RECEIVABLES:
Company contributions 11,722 -
Employee contributions 24,313 26,875
Employee loan payments 1,864 1,600
--------- --------
Total receivables 37,899 28,475
--------- --------
NET ASSETS AVAILABLE FOR BENEFITS $1,746,294 $944,460
========== ========
See notes to financial statements.
2
CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2001 and 2000
2001 2000
---- ----
CONTRIBUTIONS:
Employee $344,077 $269,198
Company 29,515 14,615
---------- -----------
Total contributions 373,592 283,813
---------- -----------
LOSS ON INVESTMENTS, NET:
Interest and dividends 8,941 19,140
Net depreciation in fair value of investments (79,708) (55,341)
---------- --------
Total loss on investments, net (70,767) (36,201)
---------- ----------
Distributions to participants (64,779) (193,036)
Rollovers and transfers from other plans 565,077 -
Administrative and other Expenses (1,289) (238)
---------- ----------
Net increase in net assets available for benefits
801,834 54,338
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 944,460 890,122
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS
End of year $1,746,294 $944,460
========== ========
See notes to financial statements.
3
CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
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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 Investment Policy - In connection with its decision to name
Prudential Trust Company, a new Trustee, the Company, effective March 2,
2000, determined that it was necessary to freeze activity in the Plan until
on or about May 24, 2000. During that interim period no participant was
permitted to receive any payout from the Plan or alter any investment
option. All contributions to the Plan however were continued and were
invested in accordance with a participant's investment instructions
received prior to March 2, 2000.
In March 2000, account balances in the Vanguard/Primecap Fund and
Vanguard/Morgan Growth Fund were transferred to the Prudential Jennison
Growth Fund Z and account balances in the Vanguard/Windsor II Fund were
transferred to Fidelity Advisors Growth Opportunities Fund T. Account
balances in the Vanguard Index Trust- 500 Portfolio were transferred to the
Prudential Stock Index Fund Z. Account balances in the Vanguard/Wellington
Fund were transferred to the Dreyfus Premier Balanced Fund A and account
balances in the
4
Vanguard Retirement Savings Trust, Vanguard Fixed Income Securities-
Long-Term Corporate Portfolio and the Vanguard Money Market Reserves- Prime
Portfolio were transferred to the Wells Fargo Stable Return Fund. Copies of
the prospectus for each of these investment funds are available to
participants from Prudential. Two additional new funds were made available
to employees the Oppenheimer Enterprise Fund A and the Putnam International
Growth Fund A. All existing account balances in the Company Stock fund were
also transferred to Prudential's custodian in April 2000.
E. Participation - Subject to certain conditions, U.S. union employees of
Crane Washington (effective 1998); Sequentia (effective 2001); Powers
Process (effective 1995 was sold in September 2001); 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 coinciding with or following their date
of hire.
F. 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
$10,500 in 2000 and in 2001. Discrimination tests are performed yearly. Any
discrepancies in passing the threshold would result in refunds to the
participants.
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:
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).
5
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 Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
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 the 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 has provided the following funds in which participants elected to
invest their Plan assets:
6
Crane Co. Stock Fund - Invests in the common stock of Crane Co.
Prudential Jennison Growth Fund Z - Consists of a diversified portfolio of
equity securities seeking to provide long-term capital growth. The fund
normally invests at least 65% of assets in equities issued by companies
with market capitalizations exceeding $1 billion. The sub-advisor seeks
companies that it believes are attractively valued and have demonstrated
earnings and sales growth and high returns on equity and assets. It may
invest up to 20% of assets in foreign securities.
Prudential Stock Index Fund Z - Seeks to replicate the performance of the
S&P 500 index. The fund normally invests up to 80% of assets in securities
listed on the S&P 500 index. It intends to purchase all 500 securities in
the same proportions as they are represented on the index. The fund seeks
to achieve a .95 correlation with the index. It may invest the balance of
assets in other equity-related securities, U.S. government debt, put and
call options on securities and stock indices, and futures contracts on
stock indices and options.
Wells Fargo Stable Return Fund - Consists of a diversified portfolio of
assets issued by highly-rated financial institutions and corporations as
well as obligations of the U.S. Government or its agencies such as:
guaranteed investment contracts, bank investment contracts, corporate
bonds, U.S. Treasury/Agency Securities, mortgage related securities and
asset backed securities.
Fidelity Advisors Growth Opportunities Fund T - Consists of a diversified
portfolio of equity securities seeking to provide long-term capital growth.
The fund normally invests at least 65% of assets in equity securities of
companies that management believes have long-term growth potential. It may
also purchase fixed-income securities. The fund may invest without limit in
foreign securities.
Oppenheimer Enterprise Fund A - Consists of a diversified portfolio of
equity securities seeking to provide long-term growth of capital. The fund
normally invests at least 65% of assets in equity securities of companies
with market capitalizations at or below $500 million. It may invest the
remaining assets in companies with larger market capitalizations. The fund
may invest without limitations in foreign securities. It may invest in
investment-grade debt securities.
7
Putnam International Growth Fund A - Consists of a diversified portfolio of
equity securities seeking to provide long-term growth of capital. The fund
normally invests at least 65% of 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 to be
undervalued. The fund may invest in both developed and emerging markets.
Dreyfus Premier Balanced Fund A - Seeks to out perform a hybrid index that
includes the S&P 500 index and the Lehman Brothers Intermediate Bond index.
The fund normally invests 60% of assets in common stocks and 40% in
investment-grade bonds. Although the equity and debt portions are similar
to their respective indices, the fund may purchase securities not included
on the indices.
MFS Mid-Cap Growth Fund A - Consists of a diversified portfolio of equity
securities seeking to provide long-term growth of capital. The fund
normally invests at least 65% of assets in equity securities of medium
market capitalizations. Management determines market capitalization by
selecting companies that fall within the range of the Russell MIDcap Growth
index. It may invest up to 20% in debt rated below BBB and up to 35% of
assets in foreign securities.
Fidelity Advisor Dividend Growth Fund T - Consists of a diversified
portfolio of equity securities seeking to provide long-term growth of
capital. The fund normally invests at least 65% of assets in companies that
the advisor believes have either the potential for dividend growth or
commencing dividends. It may invest in securities of either domestic or
foreign issuers. The fund may invest in either growth stocks or value
stocks or both.
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.
8
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's common stock.
Participant loans are valued at cost, which approximates fair value.
Below are the investments whose fair value individually represented 5 percent or
more of the Plan's net assets as of December 31, 2001
and/or 2000:
2001 2000
------------- -------------- ------------- ---------------
Shares/Units Market Value Shares/Units Market Value
------------- -------------- ------------- ---------------
Prudential Jennison Growth Fund Z 10,016 $148,934 4,368 $79,590
Prudential Stock Index Fund Z 3,233 82,627 3,539 104,084
Wells Fargo Stable Return Fund 23,797 740,361 11,151 327,761
Fidelity Advisors Growth Opportunities Fund T 2,920 83,991 3,734 127,509
Putnam International Growth Fund A 4,447 88,141 922 22,791
Dreyfus Premier Balanced Fund A 15,434 200,644 10,841 158,170
Fidelity Advisor Dividend Growth Fund T 14,771 172,673 - -
9
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 Prudential Trust Company (the trustee), Crane Co. and
participants with loan balances.
10
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/ E. Kopczick
----------------
E. Kopczick
/s/ Z. A. Weinberger
------------------
Z. A. Weinberger
Stamford, CT
June 25, 2002
11
CRANE CO. UNION EMPLOYEES SAVINGS AND INVESTMENT PLAN
SCHEDULE H, Line 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 2001
Identity of Issue Shares Cost Current Value
----------------- ------ ------- -------------
Prudential Jennison Growth Fund Z* 10,016 $ 184,918 $148,934
Prudential Stock Index Fund Z* 3,233 98,544 82,627
Wells Fargo Stable Return Fund 23,797 701,943 740,361
Crane Co. Stock Fund* 707 18,021 19,322
Fidelity Advisors Growth Opportunities Fund T 2,920 119,735 83,991
Oppenheimer Enterprise Fund A 1,534 31,559 21,364
Putnam International Growth Fund A 4,447 97,995 88,141
MFS Mid-Cap Growth Fund A 7,730 77,340 84,716
Fidelity Advisor Dividend Growth Fund T 14,771 176,046 172,673
Dreyfus Premier Balanced Fund A 15,434 227,498 200,644
Loans to Participants*- Loans have interest rates ranging
from 7.50% to 11.50% and mature in 2002 through 2006 - 65,621 65,621
--------- ---------
$1,799,220 $1,708,394
========= =========
*Represents a party-in-interest to the plan.
12
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 25, 2002 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, 2001.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
June 28, 2002
13