Document ympEeLmXYBj4gw8KBxB66DjYd

ANNUAL REPORT TO SHAREHOLDERS UNIV. OF vmw MAR 2 6 1352 PLAINTIFF'S EXHIBIT ( I A j\ > H. H. Bunchman C. R. Crane, II J. L. Holloway David Levinger Mark W, Lowell Edward H. McDermott William L. McKnight Peter V. Moulder S. M. Roberts V. P. Rumely V. Pi Rumely Vice President J. A. Dwyer Vice President F. H. Kaiser Comptroller P. L. Yates Assistant Comptroller E. E. Wyatt ' Executive Assistant J. L. Holloway, President C. T. Pollock Vice President PI. H. Bunchman Treasurer C. W. Dittmar Assistant Treasurer J. K. O'Neill Assistant Treasurer H. A. Tacon Assistant Treasurer F. F. Elliott Vice President C. R. Crane, II Vice President K. L. Karr Secretary A. R. Glass Assistant Secretary J. W, Hedericic Assistant Secretary R. G. Creviston Director, Public Relations J. P. Magos Director, Engineering L. W. Moore Director, Purchases J. N. Krohne Manager, Public Relations H. H. Simmons Manager, Advertising J. P. Morgan & Go., Incorporated, New York 8, New York A. R. Glass, Transfer Clerk, Crane Co., Chicago 5, Illinois The Chase National Bank of the City of New York, New York 15, New York Continental Illinois National Bank and Trust Company, Chicago 4, Illinois Arthur Youno & Company, Chicago 2, Illinois PLANTS----PRODUCTS PERSONNEL IN THE UNITED STATES CHICAGO PLANT. Chicago. Illinois Valves, Fittings, Plumbing Brass Trim, Pipe Fabrication V. P. Rumely, Vice President, Manufacturing G. C. Detlefsen, Works Manager G. L. Larson, General Superintendent CHATTANOOGA DIVISION, Chattanooga, Tennessee Enameled Iron Plumbing Fixtures, Bathtubs, Sinks, Lavatories, Iron Heating Boilers and Radiation V. P. Rumely, Vice President, Manufacturing W. M. Hamilton, Manager O. J. Stoesser, General Superintendent CRANE PACIFIC DIVISION. Colton, California Vitreous China Plumbing Fixtures, Water Closets, Lavatories . H. A. Rydstrom, General Manager A. E. Hoch, Superintendent THE TRENTON POTTERIES COMPANY, Trenton, New Jersey Vitreous China and Duraclay Plumbing Fixtures, Water Closets, Lavatories, Urinals, Tubs, Fountains, Hospital Fixtures H. A. Rydstrom, President J. W. Pieslak, Superintendent J. R. Beam, Technical Director HYDRO-AIRE, INC., Burbank, California Aircraft Valves, Filters and Actuators H. H. Rhoads, President J. H. Overholser, Executive Vice President L. L. Hill, Vice President D. A. Lichty, Vice President G. S. Massa, Vice President R. C. Stunkel, Vice President CRANE, LIMITED (Canada) Montreal L. H. T. Clego, President G. R. Gustin, Vice President F. D. MagNaughton, Vice President E. J. Laidlaw, Vice President F. H. Meyer, Vice President ST. PATRICK ST. PLANT, Montreal, Quebec Valves, Fittings, Plumbing Brass Trim, Pipe Fabrication J. D. Walker, General Superintendent CANADIAN POTTERIES LIMITED, St.Johns, Quebec Vitreous China Plumbing Fixtures, Water Closets, Lavatories A. J. Buronbr, Manager Geo. Toeffer, Superintendent PORT HOPE SANITARY MFG. CO., LIMITED, Port Hope, Ontario Enameled Iron Plumbing Fixtures, Bathtubs, Sinks and Lavatories G. M. Jacob, Acting General Manager E. H. Dithridge, Superintendent ALLIANCEWARE, LTD., Vancouver. B. C. Enameled Steel Plumbing Fixtures R. E. Strain, General Manager A. T. Gelz, Superintendent CRANE STEELWARE, LIMITED, Quebec, Quebec Enameled Steel Plumbing Fixtures R. S. Cooke, Manager J. E. Doyle, General Superintendent WARDEN KING (LIMITED), Montreal. Quebec Iron Heating Boilers, Radiators and Soil Pipe J. B. Flanagan, Manager E. N. Delahunt, General Superintendent CRANE, LIMITED (Great Britain) London J. E. Bennett, Chairman of the Board R. E. Dunnett, Managing Director IPSWICH WORKS, Ipswich, England Valves, Fittings, Boilers, Radiation J. B. Webster, Works Manager FINANCIAL SUMMARY Crane Co. and Subsidiaries in the United States Fixed Assets less Reserves for Depreciation ................ Capital Expenditures--Property, Plant and Equipment Depreciation charged to Operations ............................ Net Working Capital ..................................................... Ratio Current Assets to Current Liabilities.................. Shareholders' Equities..................................................... Shareholders' Equity per Common Share..................... Net Sales, including Sales to Foreign Subsidiaries................................. Net Earnings--Domestic Operations....................................................... Net Earnings--Domestic Operations--per Dollar of Sales.................. Dividends received from Foreign Subsidiaries....................................... Net Earnings, including Dividends received from Foreign Subsidiaries Net Earnings per Common Share ......................................................... Special Appropriation of Income............................................................. Amount of Earnings transferred to Earned Surplus............................... Net Earnings, per Common Share, transferred to Earned Surplus .... Direct Taxes per Common Share........................................................... 1951 . $ 47,008,302 10,315,983 3,253,787 91,785,734 5.64-1 140,500,445 53.64 $270,350,583 12,761,530 4.74 2,562,737 15,324,267 6.26 1,080,000 14,244,267 5.81 6.89 Total Dividends Paid-- Preferred Shares ........................ Common Shares.......................... Dividends paid per Common Share Number of Employees ...................................... Payroll, Group Insurance and Pension Expense Number of Shareholders-- Preferred ....................................................... Common......................................................... $ 529,237 6,120,432 2.60 17,939 $ 79,058,496 1,545 19,020 2 1950 $ 40,293,760 3,829,534 2,796,833 87,836,313 6.35-1 132,852,745 50.45 $220,066,910 12,068,184 5.54 4,676,987 16,745,171 6.89 979,000 15,766471 6.48 4.65 $ 544,969 6,106,433 2.60 16,024 $ 56,278,228 1,625 18,693 THE PRESENT'S LETTER FOUNDED BY R,T. CRANE 1855 CRAN E CO. OFFICE QFTHE PRESIDENT To our Shareholders: VALVES - FITTINGS - PIPE PLUMBING AND HEATING 836 SO. MICHIGAN AVE. CHICAGO 5 March 11, 1952 The Management, with the approval of the Board of Directors, presents herewith the Annual Report of Crane Co. for the year 1951. Sales of the Crane organization if consolidated amounted to $334,406,471 in 1951, the Company and its United States subsidiaries accounting for a record $267,365,809 exclusive of sales to foreign subsidiaries, up 22.7% over 1950, and the consolidated operations of the Company's subsidiaries in Canada and England resulting in record sales of $67,040,662, an increase of 25.5% over the previous year. However, despite the substantial increase in sales, net earnings from domestic operations increased only 5.7% and con solidated earnings of our Canadian and English subsidiaries decreased 9.4% compared, with 1950. Higher taxes were the principal reason for earnings not keeping pace with the increase in sales volume. Direct taxes in the United States increased from $4.65 in 1950 to $6.89 per common share in 1951, and in Canada and England from $1.86 to $2.86 per Crane Co. common share. The story of our operations is told in more detail in the Financial and Operating Review Section of this report. Dividends received from the Company's foreign subsidiaries amounted to $2,562,737 compared with $4,676,987 received in 1950. Dividends in 1950 were abnormally high as a result of a change in Canadian Government regu lations liberalizing the restrictions on the distribution of current earnings. Net earnings of the Company's subsidiaries in Canada amounted to $3,205,903 in 1951 vs. $3,757,340 in 1950, and in England to $1,598,393 in 1951 vs. $1,543,536 for 1950, stated in equivalent United States dollars. Further de tails regarding the operations of these companies are also shown in later sections of this report. Modernization and expansion of the Company's facilities in this country and Canada and England progressed satisfactorily during 1951. The new* pottery plant of the Crane-Pacific Division at Colton, California, started operations in June and showed satisfactory results in training em ployees new to the pottery business and in reaching a good level of efficiency. In May of 1951 The Trenton Potteries Company and a newly created subsid iary Repeal Land Co., acquired the assets of Repeal Brass Mfg. Co., Los Angeles, California, producers of a high grade line of moderately priced plumbers brass, such as faucets, shower heads and the like. No change has been made or is contemplated in the management or method of conducting that company's business and it will continue to operate independ ently. Crane Co. branches have purchased some of this company's products for resale for a number of years and expect to continue to do so. Late in 1951 a newly organized subsidiary of Crane Co. purchased the assets of Hydro-Aire, Incorporated, Burbank, California, and is carrying on the business of that company under the name of Hydro-Aire, Inc. This company produces valves, filters, actuators, and other common and exclusive compo nents for aircraft and aircraft engines. The business is being carried on by the previous management with no disruption to the organization. Facilities are in process of being increased several fold to better serve the heavy de mand for its product. For the most part the new facilities will be equipped with government-owned tools. The pilot plant for the production of titanium was completed during 1951 and has been in operation on an experimental basis for a number of months. No revolutionary discoveries have been made but a lot has been learned'at first hand regarding the problems to be solved. Plans are now underway to extend the pilot operation over the entire 'scope of the process from the earth to finished metal. Exploration for titanium and other mineral bearing deposits by Company geologists and mineralogists has so far resulted largely only in the elimination of some of the prospects from further exploration; however, developments have decidedly warranted a continuation of the program. The activities of the Company's already substantial Engineering and Develop ment Division are being continuously though gradually increased. A large part of the work is still devoted to improvement and expansion of basic pro ducts but increasing emphasis is being placed on the development of new and diversified lines. The outlook for volume of business for 1952 is good. Residential building is expected to be some lower than in 1951 and, further, 1952 does not have the large carryover from the preceding year that existed in 1951. However, a high demand for the Company's products going into the industrial and commer cial field is expected to continue throughout the year, and the Company's par ticipation in the Armament Program both directly and indirectly is expected to be larger than in 1951. Your Management is very appreciative of the helpful cooperation of the share holders, the employees, and the Company's customers and suppliers, without which the results of 1951 could not have been achieved. Sincerely r financial and operating review 1951 The financial and statistical information contained in this review relates to the year 1951, and is on the basis of consolidating only the figures of the United States companies, except where otherwise indicated. Financial statements of the Company and its United States subsidiaries consolidated and of the Company's subsidiaries in Canada and England consolidated, as certified by our auditors, Arthur Young & Com pany, will be found on pages 17 to 22 of the report. Sales and Earnings Net sales of $270,350,583 in 1951 established a new high and compared with $220,066,910 for the pre vious year, an increase of $50,283,673 or over 22%. While all segments of the Company's sales recorded gains the major portion of the increase represented in creased sales of valves and fittings. Sales of products manufactured by others (jobbed products) accounted for approximately 47% of total sales compared with \ 52% in 1950. Net earnings for 1951 transferred to earned surplus , were $14,244,267 after appropriation toward ex cess of future replacement cost of machinery and equipment over original cost. This compares with $15,766,171 for the previous year. Reflecting the increase in sales, earnings from do mestic operations before Federal income and excess profits taxes were $25,393,803 for 1951, an increase of $5,425,156, or more than 27%, over the compa rable item for 1950. However, this increase in earn ings before taxes was substantially offset by an increase of $4,731,810 in Federal income taxes so that net earnings from domestic operations after taxes in creased only $693,346 to $12,761,530 for 1951, com pared to $12,068,184 for 1950. Sales during 1951 reflect the effect of requirements of the Nation's mobilization program. A substantial increase in the demand for valves and fittings, during the last quarter of 1950, continued throughout most of 1951. Sales of plumbing and heating increased slightly for the year, partially as a result of carryover from activity in residential construction that attained a In summary, the financial results of the Company and its United States subsidiaries consolidated for 1951 compared with 1950, were as follows: 1951 1950 Earnings before Federal income taxes--domestic operations ............................. Provision for Federal income taxes applicable to above earnings....................... Net earnings--domestic operations......................................................................... Dividends received from Foreign subsidiaries .................................................. Net earnings for the year......................................................................................... Appropriation of earnings toward excess of future replacement cost of machinery and equipment over original cost (see plant and equipment) ......................... Net earnings transferred to earned surplus........................................................... $25,393,803 12,632,273 12,761,530 2,562,737 15,324,267 1,080,000 14,244,267 $19,968,647 7,900,463 12,068,184 4,676,987 16,745,171 979,000 15,766,171 5 high rate during 1950. However, demand for these products declined considerably during the last half of 1951. Cost of sales and expenses including provision for depreciation was 90.81% of net sales compared with 90.89% for the previous year. Taxes Total direct taxes paid or accrued during the year, including Federal income taxes of $12,632,273, amounted to $16,272,905 and were equivalent to $6.89 for each common share outstanding. Inventories At the close of the year, inventories totaled $65, 417,384 reflecting an increase of $22,724,788. Of this increase $4,097,649 was in raw material and sup plies, $7,069,699 in work in process and $11,557,440 in finished goods. The major portion of the Company's inventory is priced on the "last-in, first-out" (LIFO) basis. The remainder of the inventory not on the LIFO basis was priced at the lower of cost or market, but has been reduced by a taxable reserve which has the effect of stating such inventory, except for special order prod uct and inventories of subsidiaries acquired during 1951 aggregating $7,824,319, on a basis substantially equivalent to the LIFO method. At December 31, 1951 open commitments for raw materials, made in the ordinary course of business, approximated $1,218,000, based on prices substantially the same as current market quotations. Working Capital Net working capital as of December 31, 1951, amounted to $91,785,734, an increase of $3,949,421 during the year. The ratio of current assets to cur rent liabilities was 5.64 to 1 compared with 6.35 to 1 a year ago. Plant and Equipment Replacements and additions to plant and equip ment during 1951 totaled $10,315,983 compared with $3,829,534 in 1950. The amount for the cur rent year is comprised of $342,015 for land, $1,453, 401 for buildings and $8,520,567 for machinery and equipment. These expenditures include approximately Annual Report $1,029,000 for the new pottery plant in Colton, Cali fornia; $4,167,000 for manufacturing facilities at the Chicago plant; and $2,665,000 for the plant and equipment portion of the assets acquired in Repeal and Hydro-Aire as mentioned in the President's letter. Depreciation charged to operations in 1951 amounted to $3,253,787 compared with $2,796,833 for 1950. In addition $1,080,000 was appropriated toward providing for excess of future replacement cost of machinery and equipment, based on current cost indices, over original cost. The comparable amount appropriated in 1950 was $979,000. The total of such appropriations at the close of the current year was $4,920,000 whereas the total reserve necessary on the basis indicated is estimated at $19,322,000. Dividend Payments Dividend payments during 1951, totaling $6,649, 669, represented 46.7% of earnings transferred to earned surplus during the year. These payments con sisted of regular quarterly dividends at the annual rate of $3.75 per share on the 3%% cumulative preferred shares, amounting to $529,237, and dividends total ing $6,120,432 on common shares, or $2.60 per share. The first quarterly dividend paid on common shares was 40^ per share, with the rate being increased to 50^ for the three remaining quarters. In addition, an extra dividend of 70^ was paid at the year end. The remaining $7,594,598, or 53.3% of earnings trans ferred to earned surplus, was retained in the business to finance current operations. The book value of Crane common shares rose from $50.45 to $53.64 per share during the year. Employees The number of employees increased during 1951 to 17,939, as at the close of business on December 31. This number compares with 16,024 employees on the same date in 1950. A Stock Option Plan for officers and key employees of the Company and its subsidiaries was adopted by the Board of Directors in 1951, subject to ratification by shareholders. Under the plan the Stock Option Committee may grant ten-year options to purchase the Company's common shares at not less than 85% of the fair market price on the day the option is granted. No more than 200,000 shares may be optioned, subject to adjustments in case of stock split-ups or dividends. In November 1951, options were granted to 91 offi cers and key employees for 98,750 shares at $37 per Partial view of the highly efficient sand system in the modernized malleable iron foundry at the Chicago Plant CRANE CO. i share, or slightly more than 95 % of the closing market price on the day the options were granted. The formal program for pensions to retiring em ployees which was adopted in 1950 has been function ing satisfactorily. Based on experience under the plan, such as interest and changes in the number of em ployees and rates of pay, the estimated cost for past service of employees as most recently computed by independent actuaries is approximately $34,600,000, an increase of $4,100,000 over the estimate made a year ago. The estimated actuarial cost of the program for the year 1951 amounted to $4,268,957, of which amount $1,573,286 relates to past service on the basis of amortizing the past service liability over a period of approximately 24 years. During the year 1951, $2,128,594 was deposited with the Trustees for the payment of pensions under the retirement program. The estimated unfunded actuarial liability of the program at December 31, 1951 amounted to approximately $32,800,000, on ac count of which payments aggregating $5,000,000 have been made in January and February 1952. Total pay ments to the Trustees including the $5,000,000 amount to $11,181,645. Subsidiaries in Canada and England Net sales of the Canadian and English subsidiaries for 1951 (which are in addition to our domestic sales) amounted to $55,554,525 and $11,486,137, re spectively, representing an increase over 1950 of 26% in Canada and 19% in England. In both countries the major portion of the sales increase resulted from an increase in demand for valves and fittings and jobbed products. Net earnings for 1951 in Canada were $3,205,903, a decrease of $551,437 from 1950, and in England were $1,598,393, an increase of $54,857. Such earn ings were after taxes on income in the amount of $4,464,885 in Canada and $1,837,869 in England, representing increases over 1950 of $1,938,042 and $419,546, respectively. The major portion of the Canadian inventories has been reduced by a reserve which has the effect of stating such inventory on a basis substantially equiva lent to the "last-in, first-out" method. The charge against earnings (not deductible for income tax pur poses) for the increase in this reserve amounted to $1,092,224 in 1951 compared with $406,087 in 1950. Dividends received from the Canadian subsidiary amounted to $2,562,737. Of this amount $710,024 represents in effect dividends from the subsidiary in England, which dividends were paid first to its parent Canadian company. Dividends received from these companies in 1950 amounted to $4,676,987. The Company's investment in its foreign subsidiaries located in Canada and England is carried in the bal ance sheet at $12,000,000. The Company's equity in the surplus of these subsidiaries, which amounted to $13,331,404 at December 31, 1951, is not included in the consolidated surplus. 8 INNING PERFECTING PRODUCING: this continuous process ( the manufacture of Crane Co. products finds much of its impetus in i Company's engineering. People who have proved their technical llify--many of them in years of work at Crane Co.--apply a broad ope of engineering knowledge, techniques and product experiencetan array of problems in valves,fittings, piping, plumbing and heatg. Here products are planned and perfected, so Crane Co. may fltinue producing for the industries and peoples of the world. It scope of the Company's business may be Tated in the application of Crane valves and ngs. Huge Crane valves, as shown in typical indus- ol installations on some of the following pages, can (Inspiring. Yet the millions of small-size Crane valves such as in the soft drink bottling plant below, and household water pipes--suggest this conclusion: obably few people on this continent spend a day out using products or commodities that ha en [contact with Crane valves and fittings. !H& Come to Crane for Ideas This invitation is being given to ail present and prospective home owners in a completely new merchandising program initiated by Crane early in 1952. Color photography, such as the two examples on this page, is used to dramatize how Crane ideas and Crane plumbing fixtures can help create more beautiful, more useful bathrooms, kitchen: and utility rooms. Results of Crane idea re search are being given to architects, inferioi decorators and Crane dealers. Idea Center: in dealer display rooms of Crane fixtures are ready to help home owners who want < more interesting result from remodeling. Si i CRANE DEALERS perform the final step in the distribution of Crane plumbing and heating, and many types of valves and fittings. They are local business men who qualify as plumbing and heating contractors in the communities where they have worked to earn the reputations they enjoy. To architects, engineers and merchant build ers, Crane Dealers are the contractors who handle plumbing and heating installations in a variety of new buildings for residential, institutional, industrial and public use. To home owners, they are sources for Crane fixtures and equipment, as well as for maintenance and remodeling services. ip t CO. DISTRIBUTION OPERATES, Before distribution naturally comes production. The Chicago Works is typical of Crane's manu facturing facilities where production is sched uled toward orderly delivery of merchandise to its thousands of customers. The operations of Crane's plants together with plants of our suppliers result in a constant stream of products to Crane Branches and Crane Wholesalers. CRANE WHOLESALERS, like Crane Branches, serve the important function of supplying Crane and Crane-Line products to their customers, such as industrial plants and plumbing and heating dealers. After adding 88 new accounts in 1951, this part of Crane distribution now in cludes 683 wholesale establishments, which account for an important and increasing portion of Crane's sale*. Working closely with Crane Branches, they are able to maintain ample, intelligently planned stocks of Crane valves, fittings, plumbing, heating and Crane-Line mer chandise to provide comprehensive wholesaling service. K- ^TfereSj *i 9 II lv ..A?-S*/ -.1 *.. Vi -- *?-. A' . i tx< # - ' ^S4*0, M= HgySg:, V'W-W-- ^4* ~/?sv.ri B*ane BRANCH HOUSES. 146 Crane Branch Houses and Service Stores are Bted in 144 cities in 46 states. Together they form a nationwide network of rchandising centers to give more complete service to Crane customers. This disfjrlbution system began with the establishment of the first Branch in 1886. While m Branches have many common problems in the field of plumbing and heating, i nature of industrial needs for valves and fittings are varied. Each location appropriately staffed with qualified sales representatives and engineers dined to serve the particular industries in its territory. 30DSTOCKS are a foremost aim of Crane distribution. All of the 146 Branch es have the responsibility of maintaining suitable stocks needed by their ners. In addition, it is the duty of Branches to serve Crane wholesalers and >lers toward maintaining balanced inventories. I .. -- : wes: *' i.-A J m'1 *i , i.fcyrasr*? A**' 'V ; sttaMK&maB sag- ^' j s '--^i f* -- -wixl> * A / ^ ' A 'A ;/ * - " * "*'* V''- ','V ^ ^ *-*, GOOD DISPLAY. Today plumbing and heating deal in leading markets are doing a better retailing job, 1 cause of their attractive stores and good display of Crc fixtures and equipment. In helping its dealers enjoy results of good display, Crane Co. is the pioneer. Deal found Crane to be the first to advocate attractive,open fr> stores. Supplementing the dealers' activities, Crane Brand and Crane wholesalers maintain excellent display roo In recognition of this merchandising need, the first Brai House display room was opened in 1 906. Complete Water Systems Water Softeners Items such as these are sold by Crane Branches-- also by Whole* salers and Dealers to supplement Crane Products. Related specialty items for industry and tools for plumbers are reg ularly sold by Crane Branches and Wholesalers. PLUMBING PRODUCTS & APPLIANCES Medicine Cabinets Water Coolers Food Wasted . Disposers Automatic Dishwashers Roof Drains Kitchen Ranges INDUSTRIAL SPECIALTIES & PLUMBERS' TOOLS Pipe Threa Mach Fire Pots Unit Heaters Circulating Pumps Bench Tools Lubricated Plug.Valves Pipe Hangers .(RANI h iuJ Thread Lubri( CRANE CO a AND SUBSIDIARIES IN THE UNITED STATES CONSOLIDATED EARNINGS AND EARNED SURPLUS STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1951 Net sales: To customers............ To foreign subsidiaries Total .... Cost of sales, selling, administrative and general expenses (Notes 1 and 3) . .. . Provision for depreciation.................................................................................... Net earnings from operations.......................................................................... . . Miscellaneous other income (net) ...................................................................... Minority stockholders' interest in net income of subsidiaries............................ Net earnings (exclusive of dividends received from foreign subsidiary) before Federal taxes on income ................................................................................ Provision for Federal taxes on income (including $269,868 for excess profits taxes) ............................................................................................................... Dividends received from Canadian subsidiary (Note 2) ................................. Net earnings for the year.................................................................................... Appropriation toward excess of future replacement cost of machinery and equipment over original cost.......................................................................... Amount of earnings transferred to earned surplus........................................... Earned surplus, at December 31, 1950................................................................ Deduct: Cash dividends paid-- On 3^4% cumulative preferred shares, $3.75 per share........................ On common shares, $2.60 per share....................................................... Excess of cost over par value of 3,106 shares of 3%% cumulative pre ferred shares cancelled in connection with sinking fund requirements . . Earned surplus, at December 31, 1951 (Note 6) ............................................. $242,257,554 3,253,787 245,511,341 $ 24,839,242 726,173 $ 25,565,415 171,612 $ 25,393,803 12,632,273 $ 12,761,530 2,562,737 $ 15,324,267 1,080,000 $ 14,244,267 58,293,503 $ 72,537,770 $ 529,237 6,120,432 $ 6,649,669 10,621 6,660,290 $ 65,877,480 CONSOLIDATED CAPITAL SURPLUS STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1951 Balance, December 31, 1950 ................................................................................ Add: Premium on 11,666 shares of Crane Co. common shares issued during 1951 ................................................................................................. ......... Surplus of subsidiary company at date of acquisition, November 30, 1951 Balance, December 31, 1951 ................................................................................ $ 1,509,050 180,823 18,448 $ 1,708,321 17 ASSETS Current Assets: Cash ................................................................................................................. XJ. S. Government securities, at cost, which approximates market value . .. . Accounts receivable.......................................................................................... Less: Reserve for doubtful accounts........................................................ 30,128,449 2,226,438 16,005,405 1,816,571 Inventories (Note 1) -- Raw material and supplies Work in process................ Finished goods.................. | $ 10,955,062 f 16,363,432 I 38,098,890 27,902,011 Due from foreign subsidiaries not consolidated I 65,417,384 I 406,021 Total Current Assets..................... $111,547,392 Investments : Investment in foreign subsidiary not consolidated, at cost (Note 2) Other investments, at cost or nominal value (less reserve, $305,338) 1 } $ 12,000,000 | 831,380 12,831,380 Fixed Assets: Land and land improvements........................................................................ ! $ 6,169,086 Buildings.................................................................................... $33,917,558 Less: Reserve for depreciation........................................... 16,227,906 Machinery and equipment...................................................... Less: Reserve for depreciation............................................. $48,984,170 27,988,174 | 17,689,652 I Unfinished construction Deferred Charges 20,995,996 2,153,568 i 47,008,302 I 671,400 j-- i $172,058,474 _ 18 T* CRANE CO. AND SUBSIDIARIES IN THE UNITED STATES CONSOLIDATED BALANCE SHEET DECEMBER 31. 1951 LIABILITIES mmmmm Current Liabilities : Accounts payable, accrued payrolls, etc............................................................ Accrued Federal taxes on income..................................................................... Less: U. S. Treasury tax notes..................................................................... 13,548,905 | 10,040,783 | 14,404,755 Accrued general taxes....................................................................................... Total Current Liabilities............................................................... Reserves and Appropriations: Reserve for pensions (Note 3) ......................................... ............................... Appropriation toward excess of future replacement cost of machinery and equipment over original cost ..................................................................... $ 5,524,298 4,920,000 3,508,122 1,848,781 19,761,658 Minority Stockholders' Interest in Subsidiary Companies ...................... f Capital Stock and Surplus : Capital Stock-- Cumulative preferred shares, 3%%, par value $100-- Authorized--160,000 shares Outstanding--144,113 shares (including 5,203 shares in treasury) (Note 5) ................................................................................................ Common shares, par value $25-- Authorized--3,000,000 shares Outstanding--2,360,294 shares ............................................................. | | f j I j $ 14,411,300 | \ 59,007,350 10,444,298 1,352,073 Surplus-- Capital surplus....................................................................... Earned surplus (Note 6) ..................................................... $ 1,708,321 65,877,480 $ 73,418,650 67,585,801 Less: Cost of 5,203 shares of 3%% cumulative preferred shares pur chased in connection with sinking fund requirements (Note 5) .............. $141,004,451 504,006 140,500,445 $172,058,474 19 l NOTES TO FINANCIAL STATEMENTS 1. Inventories: The major portion of the inventory is priced on the "last-in, first-out" (LIFO) basis of valuation which was first applied January 1, 1941, and extended as of January 1. 1947 and January 1, 1950. The remaining inventory is priced at the lower of cost or market but has been re duced (except as to special order product and inventories of newly acquired subsidiaries aggregating $7,824,319) by a reserve (not deductible for income tax purposes) which has the effect of stating such inventory on a basis sub stantially equivalent to the LIFO basis. 2. Investments and Operations in Canada and England: Crane Co.'s investment in Crane, Limited (Canada) is carried in the consolidated balance sheet at U. S. dollar cost, $12,000,000, and dividends of $2,562,737 received from that company in 1951 are reflected in the consoli dated earnings statement for the year. Such dividends are net after deducting the Canadian tax of 5% on divi dends to a non-resident parent company and exchange charges, and are not subject to United States taxes on income because of foreign tax credits. Separate financial statements of Crane, Limited (Can ada) and its subsidiaries are included on pages 21 and 22. 3. Pensions: Reference is made to the narrative section of this report for information regarding pensions. Following is a summary of the changes during the year in the "Reserve for pensions": Balance, December 31, 1950...................... $3,383,935 Provision charged against earnings for the year 1951 ................................................. 4,268,957 $7,652,892 Contributions to Trustees........................... 2,128,594 Balance, December 31, 1951....................... $5,524,298 4. Stock Options: Reference is made to the narrative section of this repoi for information regarding stock options. 5. 3%% Cumulative Preferred Shares: These shares are redeemable at the option of the Corr pany at $107 per share if called for redemption prior t June 15, 1955 (an aggregate amount of $14,863,370) an at $104.50 per share if called for redemption on or aft; June 15, 1955, in each case plus accrued dividends to th date fixed for redemption. They are also redeemab! through the operation of the sinking fund at any time ; the sinking fund redemption price of $104.50 per shar p]us unpaid accrued dividends. Under the provisions of the Articles of Incorporate relating to the 3%% Cumulative Preferred Shares th. Company is required, on or before April 30 in each ye: beginning with the year 1947, to pay over to the sinkin fund agent for the redemption or purchase of such shari a determinable amount of cash but not in excess of $320 000 with respect to any fiscal year. Against its obligatio to make the cash sinking fund payment in any year th Company may, at its election, take credit for shares c such series purchased or redeemed by it otherwise tha through the sinking fund. During the year, the Company purchased 4,560 shan of its 334% Cumulative Preferred Shares at an aggrega principal cost of $436,190. On or before April 30, 195 a sufficient number of reacquired shares will be deposit! with the sinking fund agent in lieu of the $320,000 cas payment which otherwise would be required. 6. Dividends on Common Stock: Under the provisions of the Articles of Incorporatio: as amended in connection with the issuance of the 3^4( Cumulative Preferred Shares, earned surplus at Decembi 31, 1951, in the amount of $20,765,133, is not availab for the payment of dividends on the Company's commc shares. CERTIFICATE OF INDEPENDENT PUBLIC ACCOUNTANTS Arthur Young & Company To the Shareholders of Crane Co.: We have examined the consolidated balance sheets of Crane Co. and Subsidiaries in the United States and of Crane, Limited (Canada) and its subsidiaries at December 31, 1951 and the related con solidated earnings and surplus statements for the year then ended. Our examination was made in accord ance 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. In our opinion, the accompanying consolidated balance sheets and consolidated earnings and surplus statements present fairly the financial position of Crane Co. and Subsidiaries in the United States and of Crane, Limited (Canada) and its subsidiaries at December 31, 1951 and the results of their operations for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Arthur Young & Company. Chicago. Illinois, March 11, 1952. )f this report of the Comtion prior to 63,370) and - on or after dends to the redeemable any time at 0 per share, ncorporation Shares the in each year 1 the sinking ' such shares ess of 3320,ts obligation .ny year the or shares of lerwise than 4,560 shares m aggregate ril 30, 1952, . be deposited >20,000 cash corporation, )f the 334% it December lot available ly's common Jnited 1 conccordrnting urplus tnd of ations 1 basis CRANE, LIMITED AND I T S SUBSIDIARIES IN CANADA AND ENGLAND CONSOLIDATED BALANCE SHEET --DECEMBER 31, 1951 ASSETS Current Assets: Cash................................................................................................ Marketable securities at cost, whichapproximates market........... Accounts receivable less reserve for doubtful accounts ($341,838) Inventories (Note 1) .................................................................... Total Current Assets................................................... j I | | | j Investments ....................................................................................................... | Fixed Assets: I Land and land improvements....................................................... Buildings less reserve for depreciation ($3,349,320) ................ Machinery and equipment lessreserve for depreciation [ ($8,961,906) .............................................................................. Unfinished construction................................................................. 1 f ! : $ 1,221,357 5,733,463 5,409,525 513,043 Deferred Charges........................................................................................... ! $ 914,963 194,600 6,862,047 14,209,278 $22,180,888 27,532 12,877,388 152,150 $35,237,958 LIABILITIES Current Liabilities : Bank loans...................................................................................... Accounts payable, accrued payrolls, etc......................................... Accrued taxes on income less tax reserve certificates ($1,932,100) Accrued general taxes.................................................................... Current accounts due to Crane Co. and domestic subsidiaries.. Total Current Liabilities............................................. Reserves for Obsolescence and Repairs ......................................... Minority Stockholders' Interest in Subsidiary Companies .. Capital Stock and Surplus: Common shares, $100 par value, 120,000 shares......................... Earned surplus .............................................................................. $ 2,221,875 3,824,080 2,708,452 159,048 406,021 $ 9,319,476 133,212 453,866 $12,000,000 13,331,404 25,331,404 ; $35,237,958 21 CRANECO: CRANE, LIMITED AND I T S SUBSIDIARIES IN CANADA AND ENGLAND CONSOLIDATED EARNINGS AND EARNED SURPLUS STATEMENT FOR THE YEAR ENDED DECEMBER 31. 1951 mma Net sales to customers........................................................................ ; $67,040,662 Cost of sales, selling, administrative and general expenses (includ- j ing provision for depreciation of$1,000,451) (Note 1) ........... j 56,276,493 i ----------------- Net earnings from operations............................................................ 1 $10,764,169 Miscellaneous other income (net).................................................... 179,668 I $10,943,837 Minority stockholders' interest in net income ofsubsidiaries.......... ; 40,864 Net earnings before taxes on income................................................ $10,902,973 Provision for taxes on income............................................................ : 6,302,754 Special item: ; Adjustment of conversion values of foreign net assets (Note 2) $ 4,600,219 204,077 Net earnings and special item............................................................ $ 4,804,296 Earned surplus, at December 31, 1950............................................. Cash dividends paid.......................................................................... Earned surplus, at December 31, 1951............................................. 11,089,845 $15,894,141 2,562,737 $13,331,404 NOTES TO FINANCIAL STATEMENTS 1. Inventories: The inventories of Crane, Limited and its subsidiaries are priced at the lower of cost or market and, except for inventories aggregating $4,078,216, have been reduced by a reserve (not deductible for income tax purposes) which has the effect of stating such inventories on a basis substantially equivalent to the "last-in, first-out" basis. This "Lifo equivalent" method was first adopted as of January 1, 1940. 2. Basis of Conversion of Items in Foreign Currencies: Fixed assets were converted at U. S. dollar cost at dates of acquisition, less accrued depreciation. Net current assets were converted at $.9875 for the Canadian dollar and $2.78 for the English pound. 22 i i 5. I I I i t ; ( 1 * eCO iranches VALVES, FITTINGS, FABRICATED PIPE H E A T I N G AND PLUMBING MATERIAL GENERAL OFFICE 836 S. MICHIGAN AVENUE, CHICAGO CABLE ADDRESS, CRANECOY--CHICAGO PLANTS CHICAGO * CHATTANOOGA * TRENTON * BURBANK * COLTON, CAL. In addition to Crane branches listed below, Wholesalers in all major markets sell Crane products. ALABAMA BIRMINGHAM (3)......................... 2 S. Twentieth St. MOBILE (3)........................................300 N. Royal St. ARIZONA PHOENIX........................................... 233 S. First Ave. TUCSON.................................................. 35 Toole Ave. ARKANSAS FT. SMITH............................. .............221 S. Ninth St. UTTLE ROCK....................... St. CALIFORNIA LONG BEACH (I).............. ___824 W. Anaheim St. LOS ANGELES (54)........... .............. 321 E. Third St. OAKLAND (7)..................... .................. 346 Ninth St. SACRAMENTO (5)............. .................. 1227 Front St. SALINAS............................... ......... 239 East Alisal St. SAN BERNARDINO........ .............777 W. . Mill St. SAN DIEGO (1)....................................1138 India St. SAN FRANCISCO (19).... St. SAN JOSE......... ................................63 San Jose Ave. SANTA ANA...................................919 Poinsettia St. STOCKTON................................ 331 N. Harrison St. COLORADO DENVERf (17).................................. 1631 Fifteenth St. GRAND JUNCTIONf...................... 601 Pitkin Ave. PUEBLOf............................................ 180 Central Main CONNECTICUT BRIDGEPORT (3)......................................302 John St. HARTFORD (5)................................. 710 Windsor St. NEW HAVEN (II)............................365 Orchard St. DISTRICT or- COLUMBIA WASHINGTON (5).........................1225 Eye St. N.W. FLO RIDA JACKSONVILLE (3)..........................1007 W. Bay St. MIAMI (30)....................................85 N. W. Tent(, st. <u.......................................1105 E. Twiggs St. WEST palm BEACH.................................. 217 5th St. 6E0t;. , ^ "....................Washington St. Viaduct maIon ....................................... 770011 Reynoids st- savannah'.'.V.'.V.'.V.V.'.V.V.' ...500 Broadway 14 W. Broad St. tiCrane-O'Fallon Division) IDAHO EO'SE..................................................... 214 S. Fifth St. POCATELLO.................................... 756 S. First Ave. ILLINOIS AURORA................................................544 S. Lake St. CHICAGO (6)............................ 156 N. Jefferson St. Southside branch (20)..................231 W. 79th St. ROCKFORD...................... 800 S. Main St. SPRINGFIELD................................ 921 E. Monroe St. WAUKEGAN............................ 1219 Glen Rock Ave. INDIANA EAST CHICAGO......................1004 E. Chicago Ave. EVANSVILLE (6).........................118 S. E. Eighth St. INDIANAPOLIS (6)..................... 333 W. Market St. MUNCIE.......................................342 N. Pershing Dr. SOUTH BEND (23).......................1616 S. Franklin St, TERRE HAUTE.................................. 209 N. Ninth St. IOWA DAVENPORT (8)............................ 217 E. Second St. SIOUX CITY (3)..................................223 Jackson St. KANSAS TOPEKA................................. ....132 N. Kansas Ave. WICHITA (I)....................................... 624 E. First St. KENTUCKY KEVIL................................................................Main St. LEXINGTON (I)............................ 165 Midland Ave. LOUISVILLE (2)....................................756 S. First St. LOUISIANA NEW ORLEANS (II)....................... 710 S. Broad St. P. O. Box 1700 SHREVEPORT (92)............................ 1320 Winston St. MAIN PORTLAND (4). .70 St. John St. BALTIMORE (I)................................ 626 W. Pratt St. SALISBURY............................ 1911 N. Salisbury Blvd. BOSTON (27).............. 48 W. First St., South Boston SPRINGFIELD (1).............................. 60 Cypress St. MICHIGAN DETROIT (26)....................................150 Randolph St. FLINT (I)............................................ 155 Lewis St. GRAND RAPIDS (2)....... 56 Grandville Ave., S. W. JACKSON..........................................409 Hupp Ave. MINNESOTA DULUTH* (2)...................................102 Lake Ave., S. MANKATO*................................................. 510 Pike St. MINNEAPOLIS* (I)......................400 Third Ave., N. ST. PAUL* (I)...................................Broadway at 5th MISSISSIPPI JACKSON (5)............................... 176 N. Gallatin St. M ISSOU RI KANSAS CITY (7).............. 2819 Warwick Trafficway ST. LOUIS (3).................................30 S. Sixteenth St. MONTANA BILLINGS*....................... 30th St. and First Ave., S. GREAT FALLS*.................2 Third Ave., South NEBRASKA GRAND ISLAND................................... 115 E. Front St. OMAHA (8)..................................... 323 S. Tenth St. SCOTTSBLUFFf.:.......... ............... 1617 Avenue ,!A" NEVADA RENO.................................................401 E. Fourth St. NEW J E R S Y CAMDEN (4).................... 2994 Mt. Ephraim Ave. NEWARK (5).............................................. 90 South St. TRENTON (5)..............................................50 Escher St. ALBUQUERQUEf...............................612 N. First St. ROSWELL)...................................... 102 S. Virginia St. ALBANY (I).........................................NorthBroadway BINGHAMTON (36)......................21 Washington St. BUFFALO (5)..........................................201 Church St. HEMPSTEAD.............................................. 209 Main St. LONG ISLAND CITY (I)....... 47-30 Twenty-ninth St. NEW YORK CITY (Display Room).. 101 Park Ave. ROCHESTER (2).................................... 200 South Ave. SYRACUSE (I)............................ 760 W. Genesee St. UTICA (2)................................................. 326 Broad St. *(Crane Co., Minnesota) 23 CRANE CO. BRANCHES Continued NORTH CAROLINA ASHEVILLE....................................... 531 McDowell St. CHARLOTTE (8)...................... 1307 W. Morehead St. GREENSBORO.......................................205 Lyndon St. ROCKY MOUNT.............................300 N. Church St. NORTH DAKOTA FARGO*.....................................1441 4th Ave., North MINOT*.............................................................. Box 1189 OHIO AKRON (II)....... CANTON (2).... CINCINNATI (1) CLEVELAND (3) . COLUMBUS (15). DAYTON (2)....... LIMA.................... TOLEDO (1)....... ...............425 S. High St. 210 Piedmont Ave., S.E. .................. 824 Broadway ....... 6215 Carnegie Ave. ....... .. .67 N. Front St. ............. 901 S. Perry St. ___207 S. Central Ave. ...............390 S. Erie St. OKLAHOMA MUSKOGEE...................................302 Commercial St. OKLAHOMA CITY (2).................. 705 W. Main St. TULSA (2)............................................ 623 E. Third St. OREGON MEDFORD.......................................... 125 West 4th St. PORTLAND (8)............. 710 N. W. Fourteenth Ave. f (Crane-O'Fallon Division) PENNSYLVANIA ERIE.................................................. 222 E. Eighth St. PHILADELPHIA (22)......................... 245 Master St. West Philadelphia Branch (43)... 1600 S. 59th St. PITTSBURGH (30)......................40 Twenty-fourth St. READING........................................... 407 N. Front St. RHODE ISLAND PROVIDENCE (3)....................245 W. Exchange St. SOUTH CAROLINA CHARLESTON................................ 2026 Meeting St. GREENVILLE.............................. 223 W. McBee Ave. SOUTH DAKOTA ABERDEEN*.............................324 Railroad Ave., E. SIOUX FALLS*.................................. 326 E. Eighth St. UTAH OGDEN...............................................2001 Wall Ave PROVO................................. ....237 W. 5th North St' SALT LAKE CITY (10).... . - .307 W. Second, South VIRGINIA NEWPORT NEWS............. .........7706 Virginia Ave. NORFOLK (10).................. . .2 E. Twenty-second St. RICHMOND (20)............... ROANOKE (17).................. .404 Center Ave., N.W. WASHINGTON SEATTLE (14)...................... ... .419 Second Ave., S. SPOKANE (8).................... .............. 126 S. Post St. TACOMA (1)...................... ....... 1209 South "A" St WEST VIRGINIA CHARLESTON (25).............................502 Broad St. TENNESSEE CHATTANOOGA (l) KNOXVILLE (1)......... MEMPHIS (I)............. NASHVILLE (2)......... .........1317 Chestnut St. . .523 W. Jackson Ave. ............ 254 Court Ave. 532 Eighth Ave., South TEXAS BEAUMONT.......................................... 720 Fannin St. CORPUS CHRIST!..................1212 N. Tancahua St. DALLAS (2).......................................... 814 Young St. EL PASOf...:...................................... 1609 Texas St. HARLINGEN.................................. 201 West "C" St. HOUSTON (l)..................................2204 Pease Ave. SAN ANTONIO (6)................ 1200 E. Houston St. (Crane Co., Minnesota) WISCOHSi H MADISON (3).... MILWAUKEE (3).. OSHKOSH.............. . .641 Williamson St. 2123 W. Michigan St. .............. 37 Market St. WYOMING CASPERf (5)...................................... 802 East nC" St. EXPORT NEW YORK BRANCH * SAN ANTONIO BRANCH SAN FRANCISCO BRANCH CRANE, Limited (Canada) GENERAL OFFICE . . 1170 Beaver Hall Square, Montreal, Que. . . Cable Address, Cranelit--Montreal MANUFACTURING PLANTS . . Montreal, Que. . Quebec, Que. . . St, John's, Que. . . Port Hope, Ont. . . Vancouver, B. C. ALBERTA CALGARY............................... 602 Eleventh Ave., W. EDMONTON.......................................... 11925 Kingsway BRITISH COLUMBIA VANCOUVER.........................................540 Beatty St. VICTORIA................................... 1010 Government St. ;a it ito b A WINNIPEG............. ............. ............. 93 Lombard St. NEWFOUND LA MD ST. JOHN'S.............................................Hill O'Chips NOVA SCOTIA HALIFAX................................................7-15 Doyle St. Warehouse.................. .................. City Market Bldg. PORT ARTHUR......... ...................950 Memorial Ave. HAMILTON........................40 Wellington St., North KINGSTON...............................................71 Brock St. LONDON..................................................304 York St. OTTAWA.......................................... 268 Catherine St. TORONTO........................................306 Front St., W. MONTREAL........................... 1121 St. James St., W. QUEBEC............................................... 39 St. Rcch St. MONCTON........................................... 293 Church St. REGINA.................................................1408 Broad St. SASKATOON...................... ............ 359 First Ave., N. CRANE, Limited (Great Britain) GENERAL OFFICE * 45-51 Leman St.( London E. ! * Cable Address, Cranelon--London MANUFACTURING PLANT . . Nacton Road, Ipswich, Suffolk BIRMINGHAM 1277 Coventry Road, South Yardley BRENTFORD.....................................Great West Road BRISTOL.. GLASGOW .......................... I, 19 Colston St. 94*100 Clyde Ferry St., Anderston 24 LONDON............................................. 45-5! Leman St. MANCHESTER. .Westinghouse Road, Trafford