The economic outlook for 2013 suggests continuing challenges for global industrial manufacturers. Nonetheless, not including the effect of the acquisition described below, we expect to continue to grow our earnings again in the year ahead. Our 2013 guidance is for core sales growth of 1%-3%, earnings per share of $4.10-$4.30, and free cash flow of $190-$220 million. As described in this report, we believe our sales can grow faster than our target markets as we benefit from new product introductions, better market penetration and our emerging market investments over the last several years. In addition, we have available capacity to fulfill demand without significant increases in fixed costs, allowing us to earn about $25 in increased operating profit for every $100 in increased sales, which creates positive pressure on our current 13% operating margin, and we continue to target productivity and cost reductions in all of our businesses. We have been pursuing a balanced capital deployment strategy, using our strong cash flow for dividends, stock repurchases and acquisitions. We have a disciplined acquisition strategy, focused on strengthening existing businesses. In 2012, we raised our quarterly dividend 8%, repurchased $50 million of our common stock and, on December 20th, we announced an agreement to acquire MEI Conlux for $820 million, representing the largest acquisition in our long history. The transaction is expected to close in the second quarter of 2013, subject to regulatory approvals and customary closing conditions. We will take on approximately $570 million in incremental debt to finance a portion of the purchase price. Importantly, both Moody’s and Standard and Poor’s have reaffirmed our investment grade credit rating. Upon completion of the acquisition, MEI will become part of our Payment Solutions business, in our Merchandising Systems segment, bringing MEI’s leadership in bill handling to our leadership position in coin handling. MEI has a low-cost country manufacturing base, strong operating margins and robust cash flow, and together we will have a more complete product line, better positioning us to serve attractive worldwide markets. The combined annual sales of Payment Solutions will be approximately $575 million. The acquisition will be accretive to earnings per share in the first twelve months after closing, adding approximately $0.25 per share, before one-time costs. Last month we announced that Max Mitchell has been appointed President and Chief Operating Officer of Crane Co. Max has been transitioning into this leadership role since May 2011, and I have full confidence that the experience and personal qualities he brings to it will place Crane Co. in good stead in the years ahead. We have greatly strengthened our Company, and I know my colleagues have all made sacrifices to position us for continued growth. I appreciate not only their hard work but also their friendship and support through the tumultuous times of the last few years. And finally, I appreciate the ongoing support from our Board of Directors and the loyalty of our customers and shareholders and thank them for their confidence in Crane Co. Sincerely, 7 Eric C. Fast Chief Executive Officer february 27, 2013