Exhibit 99.2
CRANE CO.
Income Statement Data
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Sales: | ||||||||||||||||
Aerospace & Electronics | $ | 142,982 | $ | 141,722 | $ | 429,860 | $ | 409,243 | ||||||||
Engineered Materials | 71,636 | 75,558 | 239,931 | 235,550 | ||||||||||||
Merchandising Systems | 73,384 | 40,610 | 179,566 | 130,050 | ||||||||||||
Fluid Handling | 256,249 | 244,036 | 755,445 | 718,504 | ||||||||||||
Controls | 23,387 | 20,413 | 70,637 | 61,896 | ||||||||||||
Intersegment Elimination | 66 | (108 | ) | (202 | ) | (331 | ) | |||||||||
Total Net Sales | $ | 567,704 | $ | 522,231 | $ | 1,675,237 | $ | 1,554,912 | ||||||||
Operating Profit: | ||||||||||||||||
Aerospace & Electronics | $ | 25,272 | $ | 26,461 | $ | 73,919 | $ | 60,679 | ||||||||
Engineered Materials | 9,661 | 15,691 | 38,551 | 50,835 | ||||||||||||
Merchandising Systems | 8,887 | 3,529 | 17,101 | 11,362 | ||||||||||||
Fluid Handling | 29,404 | 21,131 | 83,780 | 53,588 | ||||||||||||
Controls | 2,112 | 1,711 | 7,664 | 5,287 | ||||||||||||
Corporate | (4,173 | ) | (6,764 | ) | (26,546 | ) | (23,244 | ) | ||||||||
Total Operating Profit | 71,163 | 61,759 | 194,469 | 158,507 | ||||||||||||
Interest Income | 552 | 503 | 2,163 | 1,004 | ||||||||||||
Interest Expense | (5,244 | ) | (5,564 | ) | (16,268 | ) | (17,025 | ) | ||||||||
Miscellaneous- Net | 1,461 | 778 | 7,143 | 2,844 | ||||||||||||
Income Before Income Taxes | 67,932 | 57,476 | 187,507 | 145,330 | ||||||||||||
Provision for Income Taxes | 21,889 | 17,434 | 59,602 | 44,616 | ||||||||||||
Net Income | $ | 46,043 | $ | 40,042 | $ | 127,905 | $ | 100,714 | ||||||||
Share Data: | ||||||||||||||||
Net Income per Diluted Share | $ | 0.74 | $ | 0.66 | $ | 2.06 | $ | 1.67 | ||||||||
Average Diluted Shares Outstanding | 62,226 | 60,490 | 62,192 | 60,229 | ||||||||||||
Average Basic Shares Outstanding | 61,110 | 59,936 | 60,941 | 59,676 | ||||||||||||
Supplemental Data: | ||||||||||||||||
Cost of Sales | $ | 378,054 | $ | 356,058 | $ | 1,125,978 | $ | 1,071,033 | ||||||||
Selling, General & Administrative | 118,487 | 104,414 | 354,790 | 325,372 | ||||||||||||
Depreciation and Amortization * | 12,259 | 11,666 | 39,056 | 36,509 | ||||||||||||
Stock Compensation Expense | 3,169 | 1,579 | 11,288 | 6,452 |
* | Amount included within cost of sales and selling, general & administrative costs. |
CRANE CO.
Condensed Balance Sheets
(in thousands)
September 30, 2006 | December 31, 2005 | |||||
ASSETS | ||||||
Current Assets | ||||||
Cash and Cash Equivalents | $ | 99,077 | $ | 180,392 | ||
Accounts Receivable | 342,865 | 289,521 | ||||
Inventories | 301,963 | 272,354 | ||||
Other Current Assets | 51,467 | 56,128 | ||||
Total Current Assets | 795,372 | 798,395 | ||||
Property, Plant and Equipment | 267,236 | 263,791 | ||||
Insurance Receivable - Asbestos | 214,626 | 224,600 | ||||
Other Assets | 341,698 | 284,345 | ||||
Goodwill | 712,377 | 568,355 | ||||
Total Assets | $ | 2,331,309 | $ | 2,139,486 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current Liabilities | ||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 315 | $ | 254 | ||
Accounts Payable | 155,557 | 149,647 | ||||
Current Asbestos Liability | 55,000 | 55,000 | ||||
Accrued Liabilities | 186,024 | 174,366 | ||||
Income Taxes | 28,984 | 19,322 | ||||
Total Current Liabilities | 425,880 | 398,589 | ||||
Long-Term Debt | 366,094 | 293,248 | ||||
Deferred Tax Liability | 70,417 | 71,406 | ||||
Long-Term Asbestos Liability | 486,899 | 526,830 | ||||
Other Liabilities | 88,315 | 96,119 | ||||
Shareholders’ Equity | 893,704 | 753,294 | ||||
Total Liabilities and Shareholders’ Equity | $ | 2,331,309 | $ | 2,139,486 | ||
CRANE CO.
Condensed Statements of Cash Flows
(in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Operating Activities: | ||||||||||||||||
Net income | $ | 46,043 | $ | 40,042 | $ | 127,905 | $ | 100,714 | ||||||||
Income from joint venture | (1,306 | ) | (1,894 | ) | (4,525 | ) | (4,476 | ) | ||||||||
Gain on divestitures | (664 | ) | — | (8,931 | ) | — | ||||||||||
Depreciation and amortization | 12,259 | 11,666 | 39,056 | 36,509 | ||||||||||||
Stock-based compensation expense | 3,169 | 1,579 | 11,288 | 6,452 | ||||||||||||
Cash (used for) provided by operating working capital | (1,469 | ) | 9,573 | (35,617 | ) | (35,063 | ) | |||||||||
Other | (1,501 | ) | 11,532 | 3,697 | 14,665 | |||||||||||
Subtotal | 56,531 | 72,498 | 132,873 | 118,801 | ||||||||||||
Asbestos related payments, net of insurance recoveries | (20,877 | ) | (5,298 | ) | (29,957 | ) | (24,556 | ) | ||||||||
Refund associated with terminated Master Settlement Agreement | — | — | — | 9,925 | ||||||||||||
Total provided by operating activities | 35,654 | 67,200 | 102,916 | 104,170 | ||||||||||||
Investing Activities: | ||||||||||||||||
Capital expenditures | (5,311 | ) | (6,259 | ) | (22,312 | ) | (17,634 | ) | ||||||||
Proceeds from disposition of capital assets | 463 | 188 | 3,317 | 1,569 | ||||||||||||
Proceeds from divestitures | 208 | — | 26,088 | — | ||||||||||||
Payment for acquisition, net of cash acquired | (85,669 | ) | (7,157 | ) | (234,734 | ) | (7,157 | ) | ||||||||
Total used for investing activities | (90,309 | ) | (13,228 | ) | (227,641 | ) | (23,222 | ) | ||||||||
Financing Activities: | ||||||||||||||||
Dividends paid | (9,173 | ) | (7,509 | ) | (24,465 | ) | (19,429 | ) | ||||||||
Common shares acquired on the open market | (12,500 | ) | — | (37,499 | ) | — | ||||||||||
Stock options exercised - net of shares reacquired | 1,963 | 8,758 | 20,606 | 10,634 | ||||||||||||
Excess tax benefit from stock-based compensation | 800 | — | 7,575 | — | ||||||||||||
Issuance of Debt | 71,700 | — | 71,700 | — | ||||||||||||
Repayment of debt, net | (79 | ) | 1,009 | (355 | ) | (3,416 | ) | |||||||||
Total provided by (used for) financing activities | 52,711 | 2,258 | 37,562 | (12,211 | ) | |||||||||||
Effect of exchange rate on cash and cash equivalents | 857 | (2,250 | ) | 5,848 | (5,860 | ) | ||||||||||
(Decrease) increase in cash and cash equivalents | (1,087 | ) | 53,980 | (81,315 | ) | 62,877 | ||||||||||
Cash and cash equivalents at beginning of period | 100,164 | 59,624 | 180,392 | 50,727 | ||||||||||||
Cash and cash equivalents at end of period | $ | 99,077 | $ | 113,604 | $ | 99,077 | $ | 113,604 | ||||||||
CRANE CO.
Order Backlog
(in thousands)
September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | |||||||||||
Aerospace & Electronics | $ | 380,224 | $ | 380,514 | $ | 364,539 | $ | 365,010 | $ | 366,109 | |||||
Engineered Materials | 13,162 | 18,617 | 16,972 | 17,241 | 20,673 | ||||||||||
Merchandising Systems | 18,637 | 15,190 | 14,838 | 9,183 | 8,362 | ||||||||||
Fluid Handling | 209,671 | 204,180 | 205,741 | 188,832 | 194,436 | ||||||||||
Controls | 17,259 | 18,385 | 19,480 | 16,864 | 15,182 | ||||||||||
Total Backlog | $ | 638,953 | $ | 636,886 | $ | 621,570 | $ | 597,130 | $ | 604,762 | |||||
CRANE CO.
Non-GAAP Financial Measures
(in thousands)
September 30, 2006 | December 31, 2005 | |||||||
BALANCE SHEET ITEMS | ||||||||
Notes Payable and Current Maturities of Long-Term Debt | $ | 315 | $ | 254 | ||||
Long-Term Debt | 366,094 | 293,248 | ||||||
Total Debt | 366,409 | 293,502 | ||||||
Less Cash and Cash Equivalents | (99,077 | ) | (180,392 | ) | ||||
Net Debt | 267,332 | 113,110 | ||||||
Shareholders’ Equity | 893,704 | 753,294 | ||||||
Total Capitalization | $ | 1,161,036 | $ | 866,404 | ||||
Percentage of Net Debt to Total Capitalization | 23.0 | % | 13.1 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
(Estimated) | |||||||||||||||||||||||
CASH FLOW ITEMS | |||||||||||||||||||||||
Cash Provided from Operating Activities before Asbestos - Related Payments | $ | 56,531 | $ | 72,498 | $ | 132,873 | $ | 118,801 | $ | 245,000 – $260,000 | $ | 216,958 | |||||||||||
Asbestos Related Payments, Net of Insurance Recoveries * | (20,877 | ) | (5,298 | ) | (29,957 | ) | (24,556 | ) | (45,000) | (45,338 | ) | ||||||||||||
Refund Associated with Terminated | |||||||||||||||||||||||
Master Settlement Agreement | — | — | — | 9,925 | — | 9,925 | |||||||||||||||||
Cash Provided from Operating Activities | 35,654 | 67,200 | 102,916 | 104,170 | $ | 200,000 – $215,000 | 181,545 | ||||||||||||||||
Less: Capital Expenditures | (5,311 | ) | (6,259 | ) | (22,312 | ) | (17,634 | ) | (30,000) | (27,164 | ) | ||||||||||||
Free Cash Flow | $ | 30,343 | $ | 60,941 | $ | 80,604 | $ | 86,536 | $ | 170,000 – $185,000 | $ | 154,381 | |||||||||||
* | Includes certain legal fees and expenses relating to the terminated Master Settlement Agreement amounting to $5.1 million for the full year of 2005, $4.5 million in the first nine months of 2005 and $.4 million in the third quarter of 2005. |
Certain non-GAAP measures have been provided to facilitate comparison with the prior year.
Free cash flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate positive cash flow. Free cash flow is considered a measure of cash generation and should be considered in addition to, but not as a substitute for, other measures reported in accordance with generally accepted accounting principles and may be inconsistent with similar measures presented by other companies.