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, 2000 to December 30, 2001
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
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000:
Statements of Net Assets Available for
Benefits 2
Statements of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE FOR THE YEAR ENDED DECEMBER 30, 2001
Schedule of assets held for investment 14
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, 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 as of December 30, 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 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 purposes as of December 30, 2001, is presented for the purpose of
additional analysis and is not a required part of the basic 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. Such schedule has been subjected to the auditing procedures applied
in our audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
Deloitte & Touche LLP
Seattle, Washington
June 2, 2002
1
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 30, 2000 AND DECEMBER 30, 2001
2000 2001
ASSETS
INVESTMENTS, AT FAIR VALUE (Note 2):
Mutual funds 41,758,383 34,852,663
Common and collective funds 6,323,426 8,894,407
Common stock 6,865,339 6,987,315
Participant notes receivable 1,786,260 1,625,285
Total investments 56,733,408 52,359,670
NET ASSETS AVAILABLE FOR BENEFITS 56,733,408 52,359,670
See notes to financial statements.
2
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR THE YEAR ENDED DECEMBER 30,2000 AND DECEMBER 30, 2001
------------------------------------------------------------------------------- ------------------------ ---------------------------
2000 2001
CONTRIBUTIONS:
Employee $3,829,393 $3,875,107
Employer (Crane Co. Stock Fund) 1,171,288 1,182,433
Rollovers 141,680 22,536
Total contributions 5,142,361 5,080,076
EARNINGS (LOSS) ON INVESTMENTS:
Interest and dividends 530,050 472,052
Net realized and unrealized appreciation/(depreciation) of
investments (2,924,463) (5,202,668)
Total gain/(loss) on investments (2,394,413) (4,730,616)
DISTRIBUTIONS TO PARTICIPANTS (6,538,716) (4,723,198)
NET INCREASE/(DECREASE) IN NET ASSETS AVAILABLE FOR BENEFITS
(3,790,768) (4,373,738)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of period 60,524,176 56,733,408
NET ASSETS AVAILABLE FOR BENEFITS
End of period $56,733,408 $52,359,670
See notes to financial statements.
3
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN
Notes to Financial Statements For the Year Ended December 30, 2001 and December
30, 2000
--------------------------------------------------------------------------------
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 substantially 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: Participants can elect to contribute and defer between 1%
and 17% of pretax annual compensation as defined by the Plan. 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.
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
Administrative Committee (the Committee), range from 1 to 5 years, or up to 15
years for the purchase of a primary residence. The fixed rate of interest will
be equal to the Wall Street Journal prime lending rate 15 days prior to the end
of each quarter plus one percent per annum.
4
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.
Plan expenses: Administrative expenses are paid by the Plan Sponsor.
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 filed for a new determination letter in late
2001. 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 options in such increments and at such times as designated by the
Investment Committee appointed by the Crane Co. Board of Directors except for
the New Match Account. All employer matching contributions are used to purchase
Crane Co. Stock and become part of the New Match Account. The plan contains a
New Match diversification provision for qualified participants. A Qualified
Participant who has attained age fifty-five (55) and has completed at least ten
(10) years of participation in the Plan shall be permitted to direct the Plan as
to the investment of an aggregate total of twenty-five percent (25%) of the
value of his Account balance attributable to Company Stock, incrementally or in
total, during a Qualified Election Period. During the last Plan Year in the
Participant's Qualified Election Period or no later than 90 days after its
close, a Qualified Participant may direct the Plan as to the investment of an
aggregate of fifty percent (50%) of such Account balance (including amounts
previously directed).
The investment options available for as of December 30, 2001 are as
follows:
Wells Fargo Stable Value Fund This Fund is an actively managed diversified
portfolio of assets issued by highly rated financial institutions and
corporations as well as obligations of the U.S. Government or its agencies.
Examples of assets include: traditional book value contracts such as
guaranteed investment contracts (GICs), bank investment contracts (BICs),
GIC alternatives, corporate bonds, U.S. Treasury/Agency Securities (for
enhanced liquidity), mortgage related securities and Asset Backed
Securities.
5
AIM Balanced Fund Class A This fund seeks total return consistent with
preservation of capital. The fund normally invests between 30% and 70% of
assets in equities, and the balance in investment-grade fixed-income
securities. The fixed-income portion may include U.S. government
obligations, mortgage- or asset-backed securities, and corporate debt. The
fund may invest up to 10% of assets in bonds rated below investment-grade
and up to 20% of assets in foreign securities.
Prudential Stock Index Fund Class I This fund seeks to mirror the returns
of the S&P 500 index. The fund normally invests at least 80% of its assets
in securities included in the S&P 500 index according to each security's
weighting in the index. Management attempts to achieve a performance
correlation with the S&P 500 of 0.95 irrespective of expenses. The fund may
invest in derivatives.
Prudential Jennison Growth Fund Class Z This fund seeks long-term growth of
capital and normally invests at least 65% of assets in equities issued by
companies with market capitalizations exceeding $1 billion. The subadvisor
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.
6
Mutual Qualified Fund A This fund seeks capital appreciation; income is
secondary. The fund invests primarily 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.
Fidelity Advisor Dividend Growth T This fund seeks capital appreciation and
primarily invests in common stocks. It normally invests at least 65% of
assets in companies that the adviser believes have either the potential for
dividend growth or commencing dividends, if none are currently paid. It may
invest in securities of either domestic or foreign issuers. The fund may
invest in either growth stocks or value stocks or both. (This fund added in
2001)
Prudential Small Company Value Fund Class Z This fund seeks capital growth
and invests primarily in common stocks selected for their low valuations
relative to the companies' earnings, assets, cash flow, and dividends.
Although the fund may invest in companies of any size, it typically focuses
on companies with market capitalizations of less than $1.5 billion.
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 is undervalued. The fund may invest in both
developed and emerging markets. It may also engage in various hedging
strategies.
Crane Co. Stock Fund Investments in common stock of Crane Co.
Huttig Stock Fund Investments in common stock of Huttig Building Products
Inc. (Huttig). This company was previously a wholly-owned subsidiary of
Crane Co. which was subsequently spun off from Crane Co. in 1999 through an
initial public offering.
7
Below are the investments whose fair value individually represented 5 percent or
more of the Plan's net assets as of December 30, 2000
and 2001:
2000 2001
Wells Fargo Bank Stable Value Fund 6,323,211 8,894,193
AIM Balanced Fund Class A 5,549,078 3,930,392
Prudential Stock Index Fund Class I 7,941,022 6,585,627
Prudential Jennison Growth Fund Class Z 19,696,769 14,626,833
Prudential Small Company Value Fund Class Z 4,179,551 5,028,842
Putnam International Growth Fund Class A 3,932,491 3,208,197
Crane Co. Stock Fund* 6,714,683 6,796,624
*Fund includes non-participant directed amounts.
During 2001, the Plan's investment (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$5,202,668 as follows:
2001
Mutual Funds $(5,020,058)
Common and Collective Funds 441,975
Common Stocks (624,585)*
===========
$(5,202,668)
2. SUMMARY OF ACCOUNTING POLICIES
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 a 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
Benefit payments: Benefits are recorded when paid.
Adminstrative expenses: Costs of administering the Plan are paid by the
Company.
Recently issued accounting standards: Statement of Financial Accounting
Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities, is effective for all fiscal years beginning after June 15,
2000. SFAS No. 133, as amended, establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. Under
SFAS No. 133, certain contracts that were not formerly considered
derivatives may now meet the definition of a derivative. The Plan adopted
SFAS No. 133 effective Janaury 1, 2001, which did not have a significant
impact on the Plan's financial position.
Use of estimates: The preparation of financial statements in conformity
with generally accepted accounting principles 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. Nonparticipant-Directed Investments
Information about the significant components of the changes in net assets
relating to the nonparticipant-directed investments during the year ended
December 31, 2001 is as follows:
Balance at 12/31/00 $5,198,643
Contributions 1,182,433
Dividends 80,253
Net appreciation/(depreciation) (563,026)
Distributions (397,178)
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Balance at 12/31/01 $5,501,125
============
4. PARTIES-IN-INTEREST
The Plan has investments and transactions with parties-in-interest, those
parties being Crane Co., Huttig, and participants with loan balances.
In addition, certain plan investments are shares of mutual funds managed by
Prudential Financial. Prudential Financial is the trustee as defined by the
plan, and, therefore, transactions qualify as party-in-interest.
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
ELDEC Corporation and Interpoint Corporation
Deferred Income PLAN
D.J. Robinson
D.J. Robinson
David Neils
David Neils
Linda Wood
Linda Wood
Lynnwood, WA
June 27, 2002
13
ELDEC CORPORATION AND INTERPOINT CORPORATION DEFERRED INCOME PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 30, 2001
Issuer Description Shares Current Value
Collective Funds:
Wells Fargo Bank,N.A. Prudential Stable Fund 285,871 8,894,193
The Prudential Insurance * AP Fund 214
Mutual Funds:
Prudential Mutual Funds * Pru Small Company Fund Z 306,824 5,028,842
Prudential Mutual Funds* Pru Stock Index Fund I 254,862 6,585,627
Prudential Mutual Funds* Pru Jennison Growth Fund Z 969,949 14,626,833
Mutual Qualified Income A Mutual Qualified Income A 57,361 945,301
Putnam International Growth A Putnam International Growth A 162,493 3,208,197
AIM Balanced Fund A AIM Balanced Fund A 151,053 3,930,392
Fidelity Adv Dividend Growth Fidelity Adv Dividend Growth 44,701 527,471
Other:
Crane Co. Company Stock* Crane Co. Company Stock 265,079 6,796,624
Huttig Company Stock* Huttig Company Stock 31,261 190,691
Participant notes receivable 7.5%- 11% 1,625,285
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52,359,670
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*Represents a party-in-interest to the plan.