Document reZ3621944ddBNogmy6Z3jmqV

CRTX0183 CRTX 0184 Contents 2 Financial highlights 3- 4 Letter to shareholders 5- 10 Financial information 5 Consolidated statement of income 5 Consolidated statement of earned surplus 6- 7 Consolidated balance sheet S Details of long-term debt 9 Consolidated statement of capital surplus 9 Consolidated statement of source and application of funds 9 Details of stock option plans 10 Ten-year consolidated financial summary 10 Report of independent accountants 11-23 Review of operations 11 CF&I Steel Corporation 15 Fluid control IS Water treatment and purification 20 Comfort conditioning and sanitary control 22 Stabilization and control of moving objects 24 Officers and directors; U.S. and international operations annual 'ncst'.nci The Crane Co. 1970 annual meeting will be held Tuesday, April 2S, 1970, at Morgan Guaranty Hall, 2Sth floor, 15 Broad Srreet, New York City, starting at 10 A.M. Crane Co. Annual Report 1969 CRTX0185 Financial Highlights 1969 1968 Sales........................................................................................ $550,707,000 . $409,549,000 Income before net extraordinary credit............................... 9.493.000 8.495.000 Net income.............................................................................. 11,602,000 10,998,000 Cash dividends........................................................................ 4.141.000 4.136.000 Net working capital.............................................................. ' 194,321,000 122.103.000 Total assets......................................... ................................... 577.410.000 295.315.000 Common shareholders' equity.............................................. 146.094.000 140.514.000 Common shares outstanding at year end............................... 2,543,015 2,532,012 Ratios at year end: Net income to sales............................................................. Common shareholders' net income to average equity . . Current ratio........................................................................ 2.1% 8.1% 3.1 2.7% 7.9% 4.1 Per common share: Income before net extraordinary credit............................... Net extraordinary credit.................................................... Net income........................................................................ Depreciation........................................................................ Cash flow from operations.............................................. Cash dividends................................................................... Common shareholders'equity......................................... $ 3.66 .82 4.48+ 5.60 10.08 1-80 -57.45 $ 3.23* .97* 4.20* 3.54* 7.74* 1.60 54.41* `Adjusted for 2% stock dividend in December, 1969. tAssuming conversion of subordinated debentures, net income per common share would amount to $3.67 (S3.96 in 1968). $2*0 -- 200 :60 - 120 -- It W - i 40- I 52 es oer Sr.are 214 91 1.24J t$f7l| *5f619 IM~S? S i- 1 S3 v1 asn F c.\ ssr 5'W: 4 41 JO - ) 49 1 6 - f 6- #3 IS 4-329 297 2- 1 0 - $0 CRTX0186 "7"o 7*-*'rinc!9rsi Last year Crane Co. made progress in a number of directions. The major accomplishment was the acquisition of more than 84 per cent of the common stock of CF&I Steel Corporation. At year end, after repurchases in the open market, there were issued and outstanding a net amount of $52,077,200 in 7 per cent subordinated deben tures and $48,552,900 in 5 per cent convertible subordi-. nated debentures, convertible at $57750, each due in 1994, covering the purchase of 2,897,480 shares of CF&I com mon. In addition, Crane purchased 458,900 CF&l common shares in the open market for $11,761,230. The acquisi tion of CF&I has put Crane into a new and promising business and has lessened its dependence on overseas operations. CF&I is a vertically integrated steel company opera ting its own railroad and coal, iron and limestone mines. In addition to the main plant at Pueblo, Colorado, CF&I operates plants in New Jersey, Massachusetts and Cali fornia. Crane believes that the growth prospects for steel products in the territory served by the Pueblo plant are extremely promising. CF&I also has outlying lands in Colorado, Wyoming, Utah, South Dakota and New Mex ico, consisting of 380,000 acres of land and 10,000 acres of mineral rights, in addition to its holdings in Pueblo. Consolidated net sales of Crane Co. in 1969 totaled $550,707,000, an increase of 35 per cent over the $409,549,000 recorded in 1968. Net income for the year was $11,602,000, equal to $4.48 per share, compared with $10,99S,000, or $4.20 per share in 1968. The inclusion of CF&I for the last six months of 1969 was the primary reason for the substantial increase in sales and the modest improvement in net income. Excluding non-recurring extraordinary credits, net income per share was $3.66 in 1969 and $3.23 in 1968. The 1969 extraordinary after-tax credit of $2,109,000 was from the sale of real estate not used in the business. In 196S, the extraordinary credit was from a net $5,027,000 gain on sale of securities, less a net $2,524,000 loss on start-up costs of new plants and disposal costs sustained in closing old plants. Cash flow (net income plus depreciation) amounted to $25,957,000, or $10.08 pershare in 1969, compared with $20,143,000, or $7.74 per share in 1968. Consolidated r.e: working capital at December 31,1969, was $194,321,000. During 1969, common shareholders' equity increased from $54.41 to $57.45 per share. During 1968 and 1969, the cash dividend of $1.60 per share was maintained and a 2 per cent stock dividend was again paid in December, 1969. All per share statistics have been adjusted to reflect this stock dividend. Crane operations outside of North America in 1969 contributed net sales of $60,430,000, compared with $54,560,000 in 1968, and net income of $679,000, com pared with $978,000 for 1968. These subsidiaries repre sented 16.7 per cent of shareholders' equity in 1969, compared with 16.2 per cent at the end of 1968. Increased start-up costs, higher interest costs, and longer break-in periods for new and renovated plants in North America, along with devaluation of the French cur rency and continued lower performance in the United Kingdom accounted for the decline in Crane net profits. CF&I operations for the last six months of 1969 con tributed $2,800,000 to income before extraordinary credit, after deducting $800,000 minority interest charged to miscellaneous other deductions and after-tax interest on the subordinated debentures. In addition, $1,074,000-for deferred credit amortization was included in cost of sales. Crane's investment in Huttig Sash & Door Company was increased to 55.3 per cent by the end of 1969. This investment is recorded at cost plus equity in undistributed earnings since acquisition. Equity in 1969 income be fore taxes, credited to miscellaneous other income, amounted to $1,551,000 and after taxes amounted to $753,000. During 1969, Crane decreased its holdings in Alcan Aluminium Limited by 223,700 shares and acquired additional shares in North Jersey National Bank, with present ownership at approximately 22 per cent. In 1969, Crane Co. adopted the straight line method of computing depreciation for financial reporting purposes but continued to take the accelerated method for income tax purposes. This change increased net income by $801,000 during the year. Consolidated deferred tax charged to current earnings was $2,313,000 in 1969, of which 5936,000 resulted from the inclusion of CF&I Steel *3 6> iZ cl 6i 6$ 66' 67 60 69 CRTX0187 x Vr .VSr- C.-rporaticn. At December 31. 196, the deferred tax liability included with operating and other reserves amounted to 51,777,000. The 1969 effective income tax rate was reduced to approximately 10 per cent, compared with 36 per cent in 1968, by investment credits of $1,075,000 and investment income, including gains on the sale of securities and other capital assets, of $3,502,000 which carried an unusually low income tax rate. Similar items in 196S amounted to 5906.000 and $1,438,000. In addition, CF&I Steel Cor poration's tax provision had been reduced approximately 5500.000 by percentage depletion and certain other charges for tax purposes which were deducted for finan cial accounting purposes prior to 1969. The difference between reported income and taxable income will result in a $3,150,000 refund of 1966 federal'income tax paid by Crane which was included in accounts receivable at December 31,1969. In 1969, the outlay for capital expenditures, including CF&I Steel for the last six months, amounted to $3S,326,000. A private placement of $50,000,000 of 73i per cent first mortgage bonds was made to provide funds for CF&I's capital improvement program, of which 523.750.000 was received in 1969, with an equal amount to be received in 1970 and the balance in 1971. Crane's program of modernizing its manufacturing facilities continued in 196, as the new vitreous china plumbing products plant at Trenton, Ontario, was com pleted at year end and the new valve manufacturing plant at Madrid, Spain, went into operation late in 1969. Initial operation of the Nevada, Missouri, plumbing products plant has been deferred into 1970 due to construction de lays. Including this plant, annual rental obligations aggre gate 53,131,000 under long-term leases expiring through 200S. Crane Co. and its subsidiaries have a variety of pen sion plans and have followed the practice of funding cur rent service costs and interest on unfunded past service cofts for its major plans. In addition. CF'.:.' p- ; f_: funding of past service cortr over a 30-year period, in vestment gains, which have been .ubstunual. are used under an averaging method to reduce payments to the trustees on certain United States plans. Pension payments under all plans charged against operations in 1969 amounted to $4,239,000, compared with $l,24,COO in 1968. At December 31, 1969, CF&I vested benefits ex ceeded pension funds and balance sheet accrual by S30,- 132,000. In December, management was informed that the Court of Appeals upheld Crane in its law suit against American Standard, Inc. and Blvth & Co. which arose out of the merger of VVestinghouse Air Brake Company into American Standard. Counsel for Crane confirmed that the Court's opinion unanimously sustains its claim that American Standard, Inc. and Blyth & Co. manipulated the market in VVestinghouse Air Brake shares and thereby illegally interfered with Crane's exchange offer to VVest inghouse Air Brake stockholders. American Standard has petitioned the appellate court for a rehearing, and it is impossible to determine at this time the extent of the damages which may be awarded to Crane. Management continues to believe, however, that American Standard's suit against Crane for so-called "insider's profit" is with out substantial merit, especially in the light of the appel late court's decision. As reported to you in previous years, Crane is a defendant in numerous private civil suits arising out of indictments in 1966 by a federal grand jury charging cer tain violations of the Sherman Anti-Trust Act. Crane is defending all of these remaining actions, and continues to be advised by counsel that the final decision should not materially affect the financial position and earnings of the Company. Speaking for the Board of Directors, we wish to thank all employees, suppliers, customers and sharehold ers for their continuing support. Respectfully submitted. D. C. Eabiani, President and T. M. Evans, Chairman D. C. Fabiani President ~r. h. T. M. Evans Chairman February 23,1970 4 CRTX0188 Consolidated Statement of income for Years Ended December 31 Net Sales....................................................................... 1969 $550,707,177 Operating Costs and Expenses: Cost of sales............................................................. : Selling, general and administrative......................... 1 t j Operating Profit............................................................. | 464,665,938 67,360,814 532,026,752 18,680,425 Other Income (Deductions): , Interest--net............................................................. .. Gain on disposal of capital assets--net.................... Dividend income on investments................................. j Miscellaneous--net......................................................1 (11,947,201) 1,089,S63 2,617,755 210,894 ( 8,028,689) [>!?$ $ 10 54$,co5 33S,S39,S59 55,451,143 394,291,002 15,257,663 ( 4,675,655) 4S1.312 1,514,090 746,322 ( 1,933,9341 Income Before Income Taxes......................................... Provision for Income Taxes......................................... 10,651,736 1,158,267 13,323,729 4,S29,222 Income Before Net Extraordinary Credit-- per share: S3.66 in 1969 and $3.23 in 1968 ($3.08 and $3.07 assuming conversion of debentures)......................... t Net Extraordinary Credit..............................................1 9,493,469 2,108,S30 S,494,507 2.503,047 Net Income................................................................... $ 11,602,299 5 10.997,554 Net income per common share: . On average shares outstanding............................ Assuming conversion of debentures S4.4S 3.67 $4.20 3.96 Consolidated Statement of Earned Surplus for Years Ended December 31 1969 Balance at Beginning of Year........................... . . . $ 72,5S0,736 Net Income.................................................................. I 11,602,299 84,183,035 Dividends: , Preferred shares--$3.75 per share............................ : Common shares: , Cash--$1.60 per share........................................... i 122,754 4,018,390 1968 5 6S,o74,272 10,997,554 79,671,S26 165,129 3,970,462 Stock--2% per share, market value of 50,084 J shares in 1969 (49,627 in 1968)......................... ' 2,172,644 2,767,203 Excess of Cost Over Par Value of Reacquired Shares--Net: 5,S70 preferred (8,530 in 1968) and 4S,300 com mon reacquired, less 6,169 issued under stock ; options (16,500 and 16,559, respectively, in 1963).................................................................. i i 1,001,256 V : 7,315,044 Balance at End of Year................................................... i $ 76,S67,991 188,296 7,091,090 ` S 72,580,736 CRANE CO. and subsidiaries See comments in letter to shareholders. CRTX0189 Con?"Si::s:2C Balance Sheet at December 31 ASSETS Current Assets: Cash............................................................................. Short-term investments.............................................. Accounts receivable, less allowances of $1,990,492 ($1,220,755 in 196S).............................................. Inventories, less LIFO reserve of $31,274,298 (552,373,877 in 196S), at lower of cost or market: Finished goods................................................... Work in process.............................................. Raw materials and supplies.............................. Prepaid expenses........................................................ Total current assets......................................... 169 $ 17,S65,S04 39,061,024 96,110,081 66,675,813 45,717,560 18,932,464 131,325,837 3,613,851 287,976,597 196$ S 13,959,603 4,767,315 63,691,441 41,492,762 27,034,313 9,848,331 73,375,406 1,033,785 161,828,050 Investments and Other Assets: Investments at cost: Southern Pacific Company, 1,000,000 shares of common stock................................................... Alcan Aluminium Limited, 301,300 shares of com mon stock (525,000 in 1968).......................... North Jersey (formerly Hudson County) National Bank, 135,052 shares of common stock (5,584 in 1968)............................................................. Outlying lands........................................................ Miscellaneous......................................................... Investment (equity method) in Huttig Sash & Door Company.............................................................. Other assets.............................................................. 41,779,934 7,359,749 4,934,362 1,261,388 4,472,726 60,308,209 7,515,528 4,774,833 72,598,570 41,779,984 13,571,161 223,360 1,234,138 56,SOS,643 6,626,430 2,540,884 65,975,957 Property, Plant and Equipment at Cost: Land................................................... Buildings and improvements . . . Machinery and equipment.... Less accumulated depreciation. . . 14,3S6,053 10S,104,626 3S0,S56,938 503,347,617 2S6,513,152 216,834,465 S577,409,632 4,720,096 59,489,569 131,659,823 195,869,4SS 12S,358,391 67,511,097 $295,315,104 CRANE CO. and subsidiaries CRTX0190 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt.................... Loans payable by foreign subsidiaries.................... Accounts payable........................................................ Accrued payrolls, taxes and other liabilities . . . U.S. and foreign taxes on income............................... Total current liabilities.................................... Long-Term Debt (see details on page 8).................... Operating and Other Reserves.................................... Minority Interest in Subsidiaries............................... Deferred Credit from Acquisition............................... 1969 S 2,736,9S5 7,891,193 42,408,221 34,536,509 6,082,611 93,655,519 271,411,242 20,158,889 26,627,972 13,958,955 19o3 $ 1,129,400 2,465,S23 18,543,707 12,735,263 4,851,025 39,725,213 106,4S8,4S4 -- 1,764,777 763,072 Shareholders' Equity: Preference stock of Glenfield & Kennedy Holdings Limited, 5V'2$e........................................................ Cumulative preferred shares, 3?ife par value $100 (redeemable at the option of the Company and subject to sinking fund requirements): Author ized--76,806 shares (81,056 in 1968); outstand ing--31,026 shares (36,896 in 1968) (after de ducting 45,780 shares in treasury in 1969 and 44,160 in 1968)........................................................ Serial preferred shares, par value $5: Authorized--600,000 shares . . Common shareholders' equity: Common shares, par value S25: Authorized 10,000,000 shares (5,000,000 in 1968); out standing--2,543,015 shares (2,532,012 in 1968) (after deducting 197,688 shares in treasury in 1969 and 153,090 in 1968)............................... Capital surplus (see details on page 9) ... . Earned surplus--$13,874,241 inl969 ($16,671,310 in 1968) is not restricted under the terms of the sinking fund debentures.......................... Total common shareholders' equity . . . Total shareholders' equity.......................... See comments in letter to shareholders. 2,400,000 2,400,000 3,102,600 2,659,600 63,575,375 5,651,059 63,300,300 4,632,917 76,867,991 72,580,736 146,094,455 . 140,513,953 151,597,055 146,603,553 $577,409,632 $295,315,104 CRTX0191 Details of Long-Term Debt at December31 Crane Co.: Sinking fund debentures due 1992, $2,000, 000 due annually beginning in 1973, of which $373,000 was in treasury in 1969 ..................... and 6Vi?c Serial promissory notes due 1973 and 1977, payable annually............................... S'HTc and 9$e Bank term loans due 1973 ($1,000, 000 due quarterly beginning October, 1970) . Miscellaneous........................................................ Subordinated debentures: 7% Sinking fund debentures due 1993, up to $1,000,000 due annually beginning in 1974 . 7$e Debentures due 1994.................................... 5% Convertible debentures due 1993, converti ble at $50 per share (380,412 common shares reserved in 1969), after deducting $1,169,000 debentures in treasury in 1969 ..................... 5$c Convertible debentures due 1994, converti ble at $57.50 per share (844,398 common shares reserved), after deducting $3,387,000 debentures in treasury.................................... _ 1969 !9o8 S 39,627,000 $ 40,000,000 2,613,437 15,000,000 200,000 57,440,437 : 3,372,499 __ 400,000 43,772,499 20,204,400 52,077,200 1 20,204,400 -- 19,020,600 ` 20,199,600 48,552,900 j 139,S55,100 ! 197,295,537 i 40,404,000 84,176,499 CF&I Steel Corporation: 53i% First mortgage and collateral trust bonds, sinking fund series due 1979, minimum of $2,000,000 due annually, of which $2,000,000 was in treasury .,.............................................. 73ifc First mortgage and collateral trust bonds, sinking fund series due 1990, $3,000,000 due annually beginning in 1975. Additional amounts of $23,750,000 and $2,500,000 to be issued in 1970 and 1971................................................... 1 4".sSo Convertible sinking fund debentures due 1977 (convertible into CF&I common shares at $31 per share), $1,000,000 due annually, of which $2,601,000 was in treasury.................... ' , . 20,000,000' 23,750,000 I 7,920,200 51,670,200 Foreign Subsidiaries: Crane Canada Limited 53A% sinking fund deben tures (secured by a general claim on property and assets), due 1985, $407,000 due annually, of which $910,200 was in treasury in 1969 . . Crane Ltd. (England): 83,i% Bank term loan due 1972 (8J,4fc in 1968) . 9% Bank term loan due 1973 (8Y2% in 1968) . Glenfield & Kennedy Holdings Limited 53,ifc un secured loan stock due 1982............................... 7,636,800 , S,547,000 4,320,000 3,442,550 4,320,000 2,473,522 3,683,513 * 3,362,642 3,745, ScO 3,192,603 S271,411,242 $106,455,434 8 CRANE CO. and subsidiaries CRTX0192 Dor.soiaated stater-.v. of Captia! Surplus for Years Ended December 31 Balance at Beginning of Year......................................... Excess of market value over par value of 50,084 common shares issued in 1969 (49,627 in 1968) as 2Sc stock dividends......................................... Excess of subordinated debentures converted over par value of common shares issued: 1993 debentures--200 shares (160 in 1968) . . 1994 debentures -- 2,850 shares ...... Balance at End of Year................................................... 1969 S 4,632,917 1963 S 3,102 J-'O 920,522 1,526,527 5,000 92,650 . 4,000 -- 5 5,651,089 5 4,632,917 Consolidated Statement of Source and Application of Funds for Years Ended December 31 Source of Funds: Net income............................................................. Depreciation............................................................. Cash flow from operations.................................... Disposals of property, plant and equipment . . . Long-term debt--(including issuance of 1994 de bentures on the acquisition of CF&I) . . . . Increase in minority interest.................................... 1969 $ 11,602,299 14,354,342 25,956,641 1,979,764 132,827,758 24,863,195 5185,627,358 Application of Funds: Acquisition of CF&I Steel Corporation's non-current assets, less long-term debt and operating reserves . Additions to plant and equipment . . . . , . Investments and other assets.................................... Reacquisition of shares (less options exercised) . . Cash dividends paid................................................... Other....................................................................... Increase in net working capital............................... - S 68,060,190 38,326,059 93,326 2,641,553 4,141,144 146,840 72,218,246 5185,627,358 1968 5 10,997,554 9,145,942 20,143,496 4,173,033 44,422,609 5 68,739,138 * . 15,017,376 44,156,382 1,031,S22 4,135,591 1,133,993 3,263,974 5 68,739,13S oeia'ls 0' =-: Decerooer .V. 13 --C- Plan Adopted in 1951: , Outstanding January 1,1969 .................................... Options exercised (3,702 shares issued from treasury) Adjustment for 2% stock dividend......................... Outstanding and exercisable, December 31, 1969 . Plan Adopted in 1965: Outstanding January 1,1969 .................................... Options granted........................................................ Options cancelled................................................... Options exercised................................................... Adjustment for 2fo stock dividend......................... Outstanding, December 31, 1969............................... At December 31, 1969, options for 17,320 shares were exercisable and options for 57,063 shares could be granted (72,599 at December 31, 1968). Number of Shares 6,679 (4,702) ___ 38_ 2,015 Price per 5hare 518.51-526.75 21.45- 26.75 518.15-526.23 33,738 20,500 (3,193) (1,467) 977 50,555 524.10-S56.13 41.75- 57.75 24.10- 57.75 25.53- 28.19 525.03-555.03 CRTX0193 -a Ten-Year Consolidated Financial Summary 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 Sates Income Before Net Income Taxes Income $285,618,712 319,556,202 333,766,863 $7,216,250 9,121,253 6,926,092 S4,824,463 5,675,770 1,176,184* 337,365,571 357,823,354 370,084,039 405,906,737 10,703,634 10,028,987 13,836,113 20,234,865 5,447,378 5,529,829 7,991,331 11,251,085 403,360,619 17,327,137 10,228,250 409,548,665 13,323,729 10,997,554* 550,707,177 10,651,736 11,602,299* Depreciation Net Working Capital $7,457,676 8,000,070 8,383,196 7,606,845 8,316,181 $89,560,647 99,371,959 88,226,079 92,081,379 96,098,246 7,846,942 105,843,822 8,124,427 107,044,223 8,632,062 118,838,858 9,145,942 122,102,832 14,354,342 194,321,078 Preferred Shares $10,459,300 10,009,300 9,109,300 8,441,300 8,069,300 6,318,600 4,908,600 4,452,600 3,689,600 3,102,600 Common Shareholders' Equity Total Net Per Income Share t Per Sharet $135,064,791 130,649,933 124,105,295 121,833,594 122,086,670 121,256,497 128,254,678 133,830,812 140,513,9S3 146,094,455 S36.37 37.85 38.67 40.92 42.53 46.67 49.66 51.82 54.41 57.45 1.19 1.53 .26 1.72 1.82 2.96 4.23 3.89 4.20 4.48 t Adjusted for 2% stock dividend in December, 1969. * After extraordinary charge of $2,018,000 in 1962 and extraordinary credits of $2,503,047 in 1968 and $2,108,830 in 1969. Report of Independent Accountants To the Shareholders of Crane Co.: We have examined the consolidated balance sheet of Crane Co. and subsidiaries as of December 31,1969, and the related consolidated statements of income, earned surplus, capital surplus and source and application of funds for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We did not examine the financial statements of CF&I Steel Corporation, a consolidated subsidiary, which statements were examined by other independent certified public accountants whose report thereon has been furnished to us. In our opinion, based upon our examination and the aforementioned report of other independent certified public accountants, the accompanying balance sheet and statements of income, earned surplus, capital surplus and source and application of funds present fairly the consolidated financial position of Crane Co. and subsidiaries at December 31,1969, and the consolidated results of their operations, changes in shareholders' equity and source and application of funds for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year, except for the change, which we approve, in the method of computing depreciation as described in the Letter to Shareholders. Mew York, N. Y. January 29,1970 10 CRANE CO. and subsidiaries CRTX0194 PUEBLO PLANT AREA 1 ueo:o ota"'. and land holdings 2 5up- $a M;"s (iron orei and land holdings 3 Caron Cua'-y 'dotonmei and land holdings 4 Monarch C^arry (histone) and land holdings 5 Aden Vine -roali and 'and holdings 6 Co^stccrf and Duncan Mines (iron ore} and land holdings jfcQlhe' lane -soldings The main CF&I Ste-1 plant at Pueblo, Colorado, employs approxi mately 7000 people, covers 639 acres. Within this area, there are 70 miles of railroad trackage and 25 miles of plant highways. The facility contains coke ovens, four blast furnaces, open-hearth ar.i basic oxygen furnaces as well as rolling mills and seamless tube, rod and wire mills. CF&I Steel Corporation Acquisition of a majority stock interest in the Coloradobased CF&I Steel Corporation gives Crane Co. a far broader product base and the opportunity to participate to a greater degree in the American economy. A vertically integrated steel company, CF&I has its own coal, iron ore and limestone deposits as well as substantial land holaings. The twelfth largest shipper of finished steel prod ucts in the United States, it produced 1,685,006 net tons in 1969. CF&I manufactures these alloy and carbon stee. items in its five plants: Principal Products Billets Cold rolled steel Cutting edges Grinding balls and rods Merchant bars and shapes Plant Locations Pueblo, Colorado Trenton and Roebiing, New Jersey Oil country tubular product; Rails and accessories Reinforcing bars Structurals Wire and wire products Palmer, Massachusetts South San Francisco, California CRTX0195 11 The Sunrise, Wyoming, iron ore mine produces over 500,000 tons annually. It is an underground mine. The beneficiation plant (foreground) upgrades the ore before shipment to Pueblo. Other iron ore comes from open pit mines in southwestern Utah. Ste-simakfng and coke plant chemicals such as benzol, toluol, xylol, Mow operating as a Crane subsidiary, CF&I Steel Corpo creosote and roofing pitch. ration is primarily engaged in the manufacture and sale In 1969, CF&I made noticeable progress in many of of over 1200 carbon and alloy steel products. As the key the traditional market areas it serves. In addition, the supplier to the rapidly growing Rocky Mountain area, extensive land holdings of the Company are being CF&I sells to such industries as construction, farming and reviewed for possible industrial, recreational or residen ranching, petroleum, metalworking, mining and trans tial development. The Company is conducting an inten portation. sive exploration program on these and other lands for The iron ore, coking coal, limestone and dolomite used minerals and materials not normally required in steel by the Pueblo, Colorado, plant are supplied from mines making operations. and quarries owned or leased in Colorado, Wyoming and The acquisition of an engineering and manufacturing Utah. In these and other holdings in South Dakota and company early in 1969, now called CF&I Engineers, Inc., New Mexico, it is estimated that proven reserves are provides additional marketing outlets. This Denver-based available to supply operations for 40 years or longer. organization designs and builds specialized equipment CF&I also owns water rights under which the Pueblo that is sold domestically and abroad. Its food processing plant draws the water necessary for its operation. equipment, particularly that used for sugar cane and A subsidiary. The Colorado & Wyoming Railway Com beet conversion in special applications, is unique. pany, serves these mining properties and transports fin- A number of new or upgraded products were intro 2 ished products. CF&I also manufactures and sells coke duced during 1969. Of interest to the railroad industry is CRTX0196 The Colorado i Wyoming Railway Company serves the Sunrise and Allen Mines and the Pueblo plant area. It is entirely equipped with diesel-electric locomotives. Limestone, which provides the necessary flux or cleanser in making iron and steel, comes from the CF&I quarry high on the Monarch Pass in central Colorado. the Hi-Cant tieplate that offers a pronounced slope on which the outer rail rests on curves. The cant provides a better bearing surface between the wheel and track, re ducing rail wear considerably. Over ten major railroads are currently conducting tests with Hi-Cant tieplates to verify CF&I's own testing program. Lok-Stres; strand, used in prestressed concrete, found wide acceptance. With a reinforcement life longer than any strand on the market, it reduces the amount of strand needed in the concrete. New super alloy grinding balls and rods, a product of CF&I research, are now undergoing tests by various mining companies. These offer the advantage of extended service life because they retain their spheroidal character istics longer. For construction and highway maintenance, CF&I is marketing heat-treated grader blades specially hardened to withstand rugged use. A new casing that resists the high pressures and tem peratures found in deeper oil wells was also introduced. CF&I acquired the license to produce a type of highly corrosion-resistant steel known as cor-ten`TM\ This is widely used in structural work where the steel is exposed to the elements since it does not require paint to protect its surface. CF&I productive capabilities are being strengthened by an extensive modernization and improvement program. A new 49-wire, 22-inch tubular horizontal strander has been put into operation in the rope mill at the Trenton, New Jersey, plant. The first and only strander of its type in the United States, it was designed and built exclusively for CF&I to increase the Company's capabilities for mak ing large strands and ropes. Earlier this year, all the wire rope facilities were also consolidated at Trenton, provid ing added economies and efficiency of operation. During the year, the multi-million-dollar moderniza tion of the rod mill at the Pueblo plant was completed. The mill produces a basic pencil-thin rod that is then CRTX0197 13 The new bar mill being constructed at Pueblo takes shape. Stands to do the preliminary shaping of heated steel and the intermediate trains are shown. The rolling of wide flange beams is automatically controlled by punch cards which regulate the equipment. Pueblo was the first western steel plant equipped with a mill to turn out this structural shape. formed by the plant wire mills, or by customers, into a broad range of wire products -- drawn wire, nails, barbed wire, welded fabric and fencing. Major expenditures were also made in the area of environmental control to incor porate the best equipment available to meet and main tain air and water standards. A major new capital improvement program is now underway at Pueblo with the installation of a new 11-inch bar mill. When completed in late 1970, it will be one of the most technologically advanced facilities of its type in the country. The eight-acre bar mill will be capable of producing up to 450,000 tons per year under average working schedules. Among its products are angles, chan nels, strips, reinforcing bars, fence posts, coiled rods and flats. With the completion of this facility, CF&I will be in an even better position to offer high-quality products to the 4 growing Rocky Mountain market area it serves. Over half of the steel production in this country is by the basic oxygen process. CF&I, the fifth company to utilize this method, uses two giant vessels in rotation. Each is capable of making about ISO tons of steel every hour. CRTX0198 A l50-::-.ch diame:er butterfly valve !o be installed :n South Africa is heirs fabricated of steel at Kiimarnoclv (foreground) whtie a 72-inch cast iron butterfly valve which will handle pump discharge in a Canadian power station is machined at the rear. A corrosion-resistant Deming pump, handling acid solutions used in processing, is one of 41 pumps and over 125 Crane steel valves installed in this U.S. plant. This leakproof Chempump canned pump was specified to pump volatile fluids at a testing site in the West. Fluid Control Crane offers the widest range of fluid control products to such industries as nuclear and fossil-fueled power, gas and oil production (both on- and off-shore), chemical processing, irrigation, shipbuilding -- to name a few. Crane valves, pumps, meters, automatic operators, fit tings and related equipment are used worldwide to con trol, transfer, measure, channel, meter and govern the flow of all types of fluids. North American Operations. Crane's operating perform ance in the fluid control area during the past year did not come up to expectations. While good progress was made in some product lines, particularly pumps, meters and control valves, the overall results in the North America valve market were disappointing. Due to severe competition, price levels were depressed and inflationary cost increases also cut into profits. In addition, two new valve plants, completed in the United States and Canada late in 1968 as part of a mod ernization program to increase capacity and lower costs, required a longer break-in period than anticipated. At year end, both had made substantial progress toward achieving efficient operating capacity, and it is believed that major operating problems have been solved. Major capital equipment expenditures in 1969 covered modernization and expansion of the Chattanooga, Ten nessee, valve plant where the installation of numerical and computer controlled machinery will be completed in the first half of this year. New heavy duty equipment in the St. Louis plant increased appreciably its capabilities to produce large diameter, heavy wall fittings for the high Crane valves for this West German refinery, some manufactured in the United Kingdom and France, were supplied by Crane G.m.b.H. pressure resistance demanded today by more sophisti cated industrial processes. Crane Canada Limited further expanded its product line with the introduction of a line of forged steel valves. Its recently developed butterfly and ball valve designs showed good market acceptance during 1969. The Flomatics Division concentrated its efforts on in troducing a new line of automatic control valves to the industrial market. With an extensive line now available, orders were received from petrochemical and power plants, paper mills and shipyards. Both the Deming and Chempump operations showed substantial improvements in performance in 1969. Dem ing pump business increased as the result of efforts to penetrate major industrial markets for its centrifugal, chemical and alloy pumps. To meet the increasing demand for Deming product lines, particularly engineered pumps, plans have been announced for construction of a new manufacturing plant in Salem, Ohio. Completion is scheduled for late next year. The leakproof and maintenance-free design of Chem pump canned pumps resulted in the specification and use of an increasing number of units to solve problems of safety and economy in the pulp and paper, chemical processing, nuclear and aerospace industries. CRTX0199 15 Crane va.vc; pertorm a wide range of services at Manic 3, one or ?e\en nycro-eicctric developments on the Manicouagan and Aux Outaraes Rivers by Hydro-Quebec. Crane cast steel gate valves (below), in sizes up to 24 inches, are part of an order for two gas and oil reforming plants handling off-shore production near Melbourne, Australia. In all. Crane supplied hundreds of cast iron, bronze and cast and forged steel valves used in this complex. ^ >3 A new low-cost diaphragm metering pump. Series 200 Chem, Meter, was introduced in 1969, to expand this product line. It is designed primarily for use in the chem ical processing industries and water and waste treatment. Water meter sales increased significantly last year. Crane deepened its penetration of the municipal and domestic markets with a complete line, in all sizes up to 2 inches, for household and commercial measurement. Crane has kept pace with the rapidly advancing tech nology of off-shore underwater operations in the petro leum industry. A number of pilot units are in service on platforms off the Gulf Coast. New approaches and in novations initiated by Crane for pumping, filtering and straining indicate considerable savings in weight, initial costs and operating expenses for the platform operators. International Operations. Crane Ltd. had reduced profits in 1969. While the order backlog for heavy engineered products was high, profitability on these items was less than anticipated. Corrective actions have been taken, and it is expected that the United Kingdom operation will show an overall improvement in 1970. Crane Ltd. has completed the installation of a new automated steel valve machining center at the Kilmar nock, Scotland, works. A separate production unit has also been set up at Kilmarnock to manufacture auto matic control valves similar to the line offered by Flo- matics in the Western Hemisphere. Crane Nederland N.V. showed a substantial gain in 1969. Sales of ball valves used in gas distribution in creased and malleable fittings shipments were higher. During 1970, an automated molding line will be in stalled in the malleable foundry. With the broadened product mix and this increased capacity, prospects for the year appear good. In Spain, Crane-FISA, S.A. bettered its performance last year. The new cast steel valve plant near Madrid, put into operation late in 1969, will enable Crane to in crease export and domestic shipments this year. Stringent economic controls by the French government leading up to and following devaluation affected Crane shipments adversely during the year. However, with the introduction of a new line of oil valves to complement its new Gem and stainless steel ball valves, Crane S.A. will be in a position to better its performance in 1970. Crane G.m.b.H. improved its operations through an ex panded line of forged steel valves produced at the new Herne, West Germany, plant. As a result of growth in the chemical, petroleum, gas and power industries, valve sales increased appreciably in 1969, and the trend is ex pected to continue in 1970. Crane Australia Pty. Limited showed continued growth last year. This unit participated in most major refinery, petrochemical, alumina and nickel refining projects. The markets for both valves and pump products are expected to remain strong in 1970. More floor space was added last year to expand manu facturing facilities. In addition, distribution has been broadened to provide warehouses in all capital cities in Australia. Crane-Glenfield (S.A.) Pty. Ltd. improved its perform ance last year, supplying valves used in the handling and distribution of water in South Africa. New foundry equipment is being installed to meet increased demand expected this year. Crane-Deming de Mexico S.A. made positive strides in 1969 through greatly increased pump business. Close competition in valve markets, however, held valve sales lower than expected. Continued improvement should be shown by this division in 1970. Crane Teledyne motor operators and valves, used as a manifolding installation, control the flow of crude oil on a Louisiana tank farm. CRTX 0200 CRTX 0201 CRTX 0202 j6-r--rrC6?! <'cSHrt- ' ' A Cochrane chemical treatment system helps an electric generating plant automatically neutralize the acidity in its makeup cooling water supply. Cochrane condensate booster pumps in the Co-op City power plant drain both the refrigeration units used for air conditioning and the hot water exchangers used in space heating. '.sier Treatment and Purification With the present and ever-growing emphasis on pollu tion control and concern over health hazards to the world's water sources. Crane has concentrated its re search efforts on solving problems in water reclamation and purification. New and improved products and proc esses pioneered and developed by Cochrane in this coun try and Glenfield & Kennedy in Scotland are helping to establish Crane as a leader in water discipline. A significant addition to Crane's capabilities in 1969 was the consummation of an agreement with La Compagnie des Eaux et de l'Ozone, France, for the exclusive representation for Otto Process ozonation in the United States. The use of ozone not only eliminates contami nants from water; it also improves the color and partic ularly the taste when compared with conventional chem ical purification methods. Water filtration with the Glenfield microstrainer con tinued to find wide acceptance in North America and abroad, not only for the clarification of municipal water supplies, but also for an increasing number of pollution control applications involving tertiary treatment of sewage and industrial wastes. Two years of research and testing culminated in a con tract award in 1969 by the Metropolitan Sanitary Dis trict of Greater Chicago for the installation of the world's :his bank of ozonators, oxygen in the air undergoes ionization en passed between electrodes. The ozone thus generated ised to complete the purification of water supplies and ered effluents, and to restore the oxygen content of the water. largest microstrainer, with a capacity of 15-million gal lons per day. This may well be the prototype for handling the total sewage effluent of Chicago when the District goes to tertiary treatment at its three large plants. Ozona tion equipment is also being tested by the city. Pilot work involving the use of microstraining and ozonation for the treatment and control of storm water overflow has continued successfully in Philadelphia. Re sults of the project, sponsored by the Federal Water Pollution Control Administration, have been so encour aging thus far that test work in this field will be continued. Demonstrating Cochrane's continued leadership in total water treating requirements for the electrical gener ating industry is a recent order for the complete system for primary water treating, makeup treatment and con densate purification for one of the largest nuclear plants in the country. Cochrane engineers are also designing the condensate purification systems for the largest fossil fuel plant ever built. The success of the Ammonex Process for treating con densate in high-pressure steam generation in power sta tions continues to grow. Since its introduction early in 1968, over 35 major generating units are now using it. Another significant combination of Crane equipment is installed at Co-op City, which covers 300 acres of northeast Bronx County in New York City. The power plant--containing Chapman valves, Cochrane condensate booster pumps, heat exchangers, a triple-unit water soft ener, a double-unit deaerator, and a continuous blow-off system--is an example of the Company's system engi neering capability with both steam and water. Cochrane is furnishing the deaerators for the nuclearpowered destroyers for the United States Navy. It also has been entrusted with the critical requirements of strip ping radioactive gases from reactor cooling water with specially designed deaeration equipment at a major utility plant in the eastern United States. 19 CRTX 0203 CRTX 0204 Automatic transfer equipment at the new Ontario pottery moves chinaware from color spraying through the firing kilns to inspection areas. v**- tillrfty n$ .. *. -v t: ::=s** f: ti: *33A: :: :j Sv 5J-JJ.*VW S^rS^sT- . (Mm asSeSSf-l At Arlen House, a luxury Miami " " 1 " Beach condominium, baths are equipped with Crane plumbing. First specially designed hospital models of the Unette (above) are installed in Dallas, Texas. At left, an assembled unit is positioned during the conversion of part of an upper New York State motel into off-campus college dormitory space. Comfort Conditioning and Sanitary Control Despite high interest rates, the inflationary economy and diverted public funds last year. Crane plumbing product sales in this country improved. This performance was due, in part, to large orders for hotels, luxury condo miniums and apartments. Crane also received large plumbing fixture contracts for new or expanded hospitals and for nursing homes. Crane's recognition in the hospital market plus the antic ipated growth of nursing homes promise a good poten tial market for succeeding years. The concept of a modular bathroom, pioneered by Crane during 1967, continues to gain recognition and acceptance. In this area. Crane last year introduced the new 220H Unette, a modular bathroom with unique, tai lor-made features for patients and the handicapped. De signed for hospitals and nursing homes, it was a logical adaptation of the original Unette. Last year Crane continued its emphasis on product de velopment which enabled it to enter new, or further penetrate existing, markets. Among the products intro duced in 1969, or the first of this year, are a new urinal, a rim flushing lavatory, a wheelchair lavatory, a "water miser" closet that uses far less water in flushing, and a molded fiberglass tub shower wall unit. An entirely new enamelware manufacturing facility is being built in Chattanooga. When completed and oper ational late this year, the plant will contain all the latest innovations in foundry technique from the standpoint of :r 5300 Crane plumbing fixtures, most in decorator >rs, plus fittings and valves were selected the new International Hotel in Las Vegas. casting, cleaning, metal preparation and enameling. Also to be completed in the latter half of 1970 is a new, mod em pottery being constructed at Nevada, Missouri. A major development in heating for single-home and multi-family dwellings during the year was the introduc tion of the Petite-7, a completely new line of highly styled hydronic nonferrous baseboard heating. Sales gains for plumbing and heating products by Crane Canada Limited reflected a favorable climate dur ing the past year. While all sectors of the construction industry showed a slowing growth, housing starts re mained high. The outlook for 1970 is for a somewhat slower rate of growth in building construction and a decline in housing starts. Crane Canada Limited continued its work with the Canadian government particularly in moderate income and public housing needs. Modern plastic fixtures, in cluding bathtubs with integral walls and one-piece lava tory countertops, are expected to make some inroads into the conventional plumbing fixtures market. Toward the end of 1969, the new and highly automated pottery in Trenton, Ontario, was completed and will be fully operational by mid-year. It has an annual capacity in excess of 200,000 units and provides Crane Canada Limited with pottery plants close to all its major markets. Crane Ltd. (England) maintained its position as a major United Kingdom supplier of domestic central and hot water heating equipmentdespite increased competition and start-up costs for a new. gas-fired, warm air heating line. Crane Nederland N.V. showed a sizable gain in the sale of boilers for residential heating. The wide acceptance of this product line has grown out of the distribution of nat ural gas from discoveries in the North Sea, and sales are expected to increase in 1970. CRTX 0205 21 CRTX 0206 ComponcrUs or :he r.sw Aircraft Integrated Data System are the data playback unit, shown with the cassette recorder on its console bench, and two data acquisition units, a data entry panel and the flight data recorder (left to right) on top. These coolant pumps in the Apollo Lunar Modules environmental control systems kept temperatures inside between SS and 90 degrees. In addition to Hytrol skid-control braking, each Boeing 747 has 14 Hydro-Aire booster and transfer pumps aboard. Stabilization and Control of Moving Objects A pioneer in the development of skid-control braking systems, Hydro-Aire Division of Crane maintains its lead in this market. During the year, it continued to de velop new products for the aerospace market, to con centrate on greater market penetration with its present product line, and to effect other long-range plans for increased volume. Hydro-Aire's latesj; Mark III version of Hyfrol, for example, has now- demonstrated its special competence in landings on wet runways. Under investigation are such new concepts as "brake-by-wire" -- a method of elimi nating heavy hydraulic lines and cable linkage in wheel brakes -- as well as Mark Ill's unique selected decelera tion possibilities. The new generation of giant jets, the Lockheed C5 Galaxy and the Boeing 747, are equipped with Hytrol anti-skid systems. The Boeing 747, largest commercial transport in the world, is also powered through HydroAire fuel pumps. A modification of the computer-controlled anti-skid braking system, marketed under the name of Sure Track, became standard equipment on the 1970 Ford Motor's Continental Mark III. Sure Track, pioneered by HydroAire, is manufactured and marketed by Kelsey-Hayes Company under a licensing agreement. leraling under Class I Clean Room editions, technicians assemble trol manifolds for the Boeing 747. A major contract was awarded during the year for'fuel pumps on the new DC-10 commercial jet, each of which uses nine pumps. A highlight of the past year was the important part played by Hydro-Aire pumps in the Apollo moon landings. In addition to pumps in the Command and Service Modules, Crane glycol coolant pumps served as a crucial support in the instrument and environmental cooling system of the Lunar Modules which set down on the surface of the moon. Three of the manned rated pumps were in each module to keep the capsule and elec tronic equipment at optimum temperatures. Encouraged by this and other non-space successes, Hydro-Aire is studying the translation of this unique technology into a line of coolant pumps for commercial and military aircraft. During 1969, Hydro-Aire entered the highly competi tive flight data recorder market. Its new Flight Data Re corders and AIDS (Aircraft Integrated Data Systems) are now being extensively tested. These units help to de termine causes of aircraft incidents and to monitor per formance and maintenance requirements on aircraft. Taken together, it permits customers to go in modular stages from the basic flight data recorder to a complete AIDS program without duplication in hardware. The Hydro-Aire line of single stage electro-hydraulic four-way servo valves, which went on the market last year, has met with good customer acceptance. These units have a broad range of flow control, pressure control and power control applications throughout the aerospace, computer and automation equipment industries. Under exploration are new methods of extending acceptance in aerospace to marketing for all other relevant industries. Also exhibiting significant promise is progress in the development of a new engine-driven pump for aircraft jet engines. It is being designed for the new generation of high-speed, high-performance jet engines which will be used on such planes as the DC-10, L-1011 and other new space-age aircraft. CRTX0207 Thomas M. Evans Dante C. Fabiani John D. Garrison P. Blair Lee John G. McCarthy Joseph V. Quarles A. Varick Stout Charles W. Veatch R. Arthur Williams Oncers Thomas M. Evans Chairman Dante C. Fabiani President William C. Dackis Vice President--Research & Development--Crane-U.S.A. Eugene L. Hannon, Jr. Vice President--Crane Supply Company John P. Kinnane Vice President--International Sales Dale A. Lichty Vice President Sr General Manager-- Hydro-Aire Division Daniel P. Nugent Vice President & General Manager-- Crane-U.S.A. James F. O'Brien, Jr. Vice President--Finance Norman Pacun Vice President, Secretary Sr General Counsel John H. Redmond Vice President Planning Stephen W. Smith Controller 30 States Operations Crane-U.S.A. New York, New York D. P. Nugent, Vice President & General Manager Hydro-Aire Division Burbank, California D. A. Lichty, Vice President & General Manager CF&l Steel Corporation Denver, Colorado F. A. Fielder, President Affiliated Company Huttig Sash & Door Company St. Louis, Missouri R. F. Eson, President International Operations Crane Australia Pty. Limited St. Marys, N.S.W., Australia P. J. Farrell, Managing Director Crane Canada Limited Montreal, Canada R. S. Reade, President . Crane Ltd. London, England Leslie V. Chater, Chairman R. B. Hill, Managing Director Crane S.A. Paris, France Leon Skarniak, General Manager Crane-Deming de Mexico S.A. Monterrey, Mexico J. C. Grau, General Manager Crane Nederland N.V. Deventer, The Netherlands G. J. DeHorn, Managing Director Crane-Glenfield (S.A.) Pty. Ltd. Benoni, South Africa J. W. Boocock, Managing Director Crane-FISA, S.A. Bilbao, Spain A. J. Pijuan, General Manager Crane G.m.b.H. Diisseldorf, West Germany Klaus Alms, General Manager Chempump, Hytrol, Gem, Crane Teledyne and Lak-Stress are Registered Trade Marks. Applications have been filed to register Petite-7 and Unette as Trade Marks. CRTX 0208 Mo-gar Guaranty Trust Company ' New York, New York 10015 ' Continental Illinois. National Bank and._-....... Trust Company of.Chicago. *. < '