CRANE CO. FINANCIAL OVERVIEW · CRANE CO. FINANCIAL OVERVIEW ... * Free Cash Flow is defined as Cash Provided by Operating Activities less Capital Spending. Free Cash Flow ... Working

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CRANE CO. FINANCIAL OVERVIEW

RICHARD MAUE

CHIEF FINANCIAL OFFICER


Financial Overview

2018 Outlook

2017 Results

Multi-Year Outlook

Capital Deployment


($ Millions, Except per Share Amounts) 2017 Change

Net Sales $2,786 +1%

Operating Profit* $423 +6%

Operating Margin* 15.2% +70 bps

Net Income* $274 +9%

EPS* $4.53 +7%

Free Cash Flow** $269 +1%

2017 Operating Results

* Excludes Special Items. Please see non-GAAP Financial Measures tables for details. ** Free Cash Flow is defined as Cash Provided by Operating Activities, less Capital Spending. Please see non-GAAP Financial Measures tables for details.

7% EPS Growth Driven by Productivity and Volume


Financial Overview

2018 Outlook

2017 Results

Multi-Year Outlook

Capital Deployment


2018 Guidance

* Excludes Special Items. Please see non-GAAP Financial Measures tables for details. ** Free Cash Flow is defined as Cash Provided by Operating Activities, less Capital Spending. Please see non-GAAP Financial Measures Tables for details. *** Reflects midpoint of guidance range.

($ Millions, Except per

Share Amounts) 2017 2018G Change***

Net Sales $2,786 $3,295 +18%

EPS* $4.53 $5.35–$5.55 +20%

Free Cash Flow** $269 $220–$250 (13%)

2018G

Core Growth +2% to +4%

Acquisitions +15%

FX Translation +0.5%

Total Sales Change +18.5%

Other 2018 Guidance Details

Adjusted tax rate of ~22%

Corporate expense of ~$60 million

Net interest expense* of ~$55 million

Diluted share count of ~61 million

Capital expenditures of $125 million


$0.42

$0.50

$0.15

$0.10

2018 Adjusted EPS Guidance

($0.25)

$4.53

$5.45

Tax, net of Investments

2017 Adjusted

EPS*

Core

Business

Tax

Benefit

Growth

Investments

Crane

Currency

Repositioning 2018G

Midpoint*

* Excludes Special Items. Please see non-GAAP Financial Measures tables for details.


Financial Performance

* Reflects midpoint of guidance range. ** Excludes Special Items. Please see non-GAAP Financial Measures tables for details.

Organic

Growth +0.6 +9.8% +4.3% +0.0% 0.3% (1.2%) 2.0% 1% 3%

Total Sales ($ Billions) Operating Profit** ($ Millions)

$2.2

$2.5 $2.6 $2.6

$2.9 $2.7 $2.7 $2.8

$3.3

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2010 2011 2012 2013 2014 2015 2016 2017 2018G*

Margin** 11.1% 12.3% 13.0% 14.5% 14.6% 14.3% 14.5% 15.2% 14.7%

$241

$309 $335

$375

$426

$391 $398 $423

$484

$0

$100

$200

$300

$400

$500

2010 2011 2012 2013 2014 2015 2016 2017 2018G*

Solid Long-term Track Record


2018 Growth Outlook

Core Growth

% of Crane

(2018G*) 2015 2016 2017 2018G* Comments

33% Fluid

Handling (6%) (6%) +2% +3%

+ Early stages of slow recovery

+ Growth initiatives

37% Payment &

Merchandising Technologies

+6% +9% +6% +2%

+ Strong underlying Payment demand

- Challenging comparisons

22% Aerospace & Electronics

0% +8% (7%) +5%

+ Commercial OE accelerating

+ Microwave project

- Widebody, Cabin, M&U

8% Engineered Materials

+1% +1% +7% +2% +Solid end markets today

- Late in RV cycle

* Reflects midpoint of guidance range.


2018 Adjusted Segment Margin* Story

* Excludes Special Items. Please see non-GAAP Financial Measures tables for details. ** Reflects midpoint of guidance range.

2015 2016 2017 2018G** Comments

Fluid

Handling 12.4% 12.0% 12.0% 13.0%

+ Volume

+ Productivity

- Growth investments

Payment &

Merchandising

Technologies

15.4% 18.2% 20.8% 16.5%

- Crane Currency impact


+ Productivity

+ Volume

Aerospace &

Electronics 21.0% 20.1% 21.8% 21.5%


- Microwave mix

+ Volume

+ Productivity

Engineered

Materials 19.0% 19.1% 18.0% 18.0%

+ Productivity

+ Volume

- Raw materials (resin)

Expect Margin Improvement in 2018 ex-Accelerated Growth Investments


Financial Overview

2018 Outlook

2017 Results

Multi-Year Outlook

Capital Deployment


$0.15

$1.00

$0.10

$0.20

$0.35

$0.35

$0.25

$0.35

$0.50

$0.50

2018 2019 2020 2021

EP

S C

on

trib

uti

on

*

Crane Currency Accretion Repositioning Benefits Tax Reform net of Investments

Multi-Year Outlook: Layers of Growth

6%–8% Underlying Core EBIT Growth

Additional Upside from Capital Allocation



Long-Term Financial Expectations by Segment

* Reflects midpoint of guidance range. ** Excludes Special Items. Please see non-GAAP Financial Measures tables for details.

Across-the-Cycle Target 2018G*

Avg. Organic

Growth

Segment

Margin

Organic

Growth

Segment

Margin**

Fluid

Handling +2%–4% 14%–19% +3% 13.0%

Payment &

Merchandising

Technologies

+3%–5% 18%–22% +2% 16.5%

Aerospace &

Electronics +3%–5% 21%–24% +5% 21.5%

Engineered

Materials GDP 12%–16% +2% 18.0%

Expect Long-Term Core EBIT Growth of Approximately 6% to 8%


$74

$10

2018 Crane Currency Accretion

($45)

($16)

($3)

Potential Upside from Repeat of a Portion of Large Contract

2018G EBITDA*

@ 18% of

$410m Sales

Depreciation &

Amortization

Interest Expense Tax 2018 Net Income

Contribution

($ millions)



2021 Crane Currency Accretion

$10

$61

$20

$15

$20

($4)

Confident in $1.00 EPS Contribution by 2021

2018 Net

income

Contribution*

Depreciation /

Other

Volume Productivity 2021 Net

Income

Contribution

Malta

($ millions)



Financial Overview

2018 Outlook

2017 Results

Multi-Year Outlook

Capital Deployment


Free Cash Conversion Free Cash Conversion

(Excluding Asbestos)

Structural Free Cash Conversion* Improving

* Free Cash Flow is defined as Cash Provided by Operating Activities less Capital Spending. Free Cash Flow conversion is defined as Free Cash Flow divided by adjusted Net Income. Please see non-GAAP Financial Measures tables for details.

Strong Track Record on Operational Free Cash Flow

0%

20%

40%

60%

80%

100%

120%

90%

95%

100%

105%

110%

115%

120%

Average 102%

Average 79%

Average 117%

Average 99%


$31

$103

($23)

($25)

($50)

($35)

($35)

2018 Free Cash Flow* Walk


2018G Free Cash

Flow

Tax Reform

Core Growth, Working Capital, Other

Interest Expense

and Related Fees

Repositioning and Growth Investments

M&A Integration

Costs

Capex (Crane

Currency Run-Rate)

Capex (Malta,

Repositioning, Investments)

* Free Cash Flow is defined as Cash Provided by Operating Activities less Capital Spending. 2018G reflects midpoint of guidance range.

One-Time Headwinds

$269

$235

2018 Free Cash

Flow

($ millions)

Major Headwinds Are Temporary


Capital Deployment Priorities

Focus on Both Organic and Inorganic Growth

Maintain Investment Grade Credit Rating, While Funding:

Internal investments to drive organic growth

» Capital Expenditures

» Research & Development

» Sales & Marketing

Acquisitions to enhance growth

Competitive returns to shareholders

» Target total payout ratio of 40%–50%

• Growing dividends in-line with earnings

• Opportunistic share repurchases

Pension and legacy liability requirements


Target Leverage Levels

Committed to Current Investment Grade Rating

Target 2x–3x adjusted debt to EBITDA, excluding Special Items

» Adjusted debt =

• Gross financial debt

• + Pension liability

• + After-tax net asbestos

Deploy cash balances and debt capacity

» Internal investments

» Acquisitions

Repatriation expected to accelerate deleveraging


33% 28% 29% 27% 28% 32% 31% 29% 25%

32% 39%

23% 19% 10%

9%

65% 67%

52%

27%

47% 42%

31%

38%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2010 2011 2012 2013 2014 2015 2016 2017 2018G*

Dividend Payout Repurchase Payout

Commitment to Return Cash


Will Maintain Dividend Payout Between 25%–30%, but M&A Prioritized Over Repurchases in Recent Years

*2018G based on adjusted EPS guidance midpoint of $5.45 and annual dividend of $1.40

Target Range


$2.5–$3.0 Billion Available from 2018–2021

Capital Deployment Potential


Additional Value Creation Potential

Dividends

Capital Expenditures

~$1.5B to $2B Available for M&A and/or Repurchases while Retaining Credit Metrics Consistent with Existing Investment Grade Rating

Operating Cash Flow

Repatriated Cash

Incremental Debt Capacity

Capital expenditures

Dividends

M&A and/or repurchases

Sources Uses


Summary


Disciplined capital allocation with strong free cash flow 3

Record performance 1

Markets improving / relentless focus on productivity 2

Exciting multi-year outlook 4


CRANE CO. FINANCIAL OVERVIEW · CRANE CO. FINANCIAL OVERVIEW ... * Free Cash Flow is defined as Cash Provided by Operating Activities less Capital Spending. Free Cash Flow ... Working

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