Greetings and welcome to the Crane Company Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Feldman, Director of Investor Relations. Thank you, sir. You may begin.

Thank you, operator and good morning everyone. Welcome to our fourth quarter 2018 earnings release conference call. I am Jason Feldman, Director of Investor Relations. On our call this morning, we have Max Mitchell, our President and Chief Executive Officer and Rich Maue, our Chief Financial Officer. We will start off our call with a few prepared remarks, after which we will respond to questions. Just a reminder, the comments we make on this call may include some forward-looking statements. We refer you to the cautionary language at the bottom of our earnings release and also in our Annual Report, 10-K and subsequent filings pertaining to forward-looking statements. Also during the call we will be using some non-GAAP numbers, which are reconciled to the comparable GAAP numbers and tables at the end of our press release and accompanying slide presentation, both of which are available on our website at www.craneco.com in the Investor Relations section. I would also like to invite you to attend our Annual Investor Day event on the morning of February 28. Please contact me directly if you would like to reserve a place at the conference. One last item for your calendars, we will report first quarter results on April 29 after the close with a conference call the morning of April 30. That is a little bit later than normal for us because of the timing of the holidays this year. Now, let me turn the call over to Max.

Thank you, Jason. In 2018, we delivered another year of record financial results. As outlined in our press release last night, we have reported full year record adjusted EPS of $5.99, which increased 32% from 2017. Our record sales of $3.3 billion increased 20% compared to 2017, with 3% organic growth and record free cash flow of $305 million, increased 14% despite a discretionary pension contribution and higher CapEx associated with the recent Crane Currency acquisition as well as our repositioning actions. Fourth quarter EPS, excluding special items, was $1.64, up 40% compared to last year and included an $0.08 discrete tax benefit. Sales of $840 million increased 18% compared to the fourth quarter of 2017, with 4% core sales growth. Adjusted operating margins improved 30 basis points to 15.5%. We are executing extremely well, delivering on our commitments and 2018 was a solid step towards achieving our long-term targets. At last year’s Investor Day, on March 1, we outlined a multiyear growth story, starting from an adjusted EPS base of $4.53 in 2017 we forecast approximately 65% to 75% growth to adjusted EPS of $7.50 to $8 by 2021 with additional potential upside from capital deployment. The combination of our strong 2018 results with the 2019 guidance we introduced last night shows that we are on track to achieve that objective. The midpoint of our initial 2019 guidance of $6.35 reflects 40% EPS growth from 2017, more than halfway towards our 2021 target in the first 2 years and consistent with what we shared with you at last year’s Investor Day event. I am very proud of our performance today and I am extremely excited about the opportunities we have ahead of us in 2019 and beyond. Before I turn to our businesses, I want to highlight again the…

Thank you, Max. Before I begin discussing our financial results and guidance, please note that our 2019 expected results will present operating profit and segment margins, consistent with the amended FASB guidance that requires the movement of all non-service cost components of pension income and expense below the operating profit line in the income statement. This change has absolutely no impact on EPS and no impact on free cash flow. It is simply a movement of certain pension elements out of the operating income line into non-operating income and expense. We have provided reconciliation in our slides on Page 13, with additional quarter details in the appendix, showing the historical impact by segment and to provide everyone with a base for comparing to our 2019 guidance. On a consolidated basis, this change reduces operating margins about 50 to 60 basis points with the substantial majority at Fluid Handling. For Fluid Handling, the margin impact in 2018 if restated is 140 basis points. Again, there is no impact on EPS or free cash flow. Now, turning to segment results. Unless I mentioned otherwise, my comments about our business unit performance this morning will be comparing our fourth quarter of 2018 and full year of 2018 results to comparable periods in 2017, while excluding special items as outlined in our press release, slide presentation and the accompanying non-GAAP tables. I will also provide some additional details on our 2019 outlook. Starting with Fluid Handling, fourth quarter sales of $280 million increased 3%, reflecting core sales growth of 6%, partially offset by a 2.5% impact from unfavorable foreign exchange and a 1% divestiture impact. Operating profit in Fluid Handling increased 21% to $38 million, with operating margins of 13.6%, up 210 basis points compared to last year. On a full year basis, Fluid…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question comes from the line of Matt Summerville with D.A. Davidson. Please proceed with your question.

Good morning, everyone. This is Drew Haroldson on for Matt. Just a couple of quick questions here. First, given that somewhere around 10% of total revenues are generated in the UK and Europe makes up for 25% of the Fluid Handling business, is the current noise from Brexit anything that you are concerned about or is it inconsequential? What are the assumptions for Europe embedded in your guidance?

So from a Brexit perspective, no, we feel confident what our overall guidance says. We don’t have any very specific assumptions built into our guidance we feel through our operating plan reviews and what we have set for next year a good level of confidence with respect to the changes that might be taking place. But at this point, no, nothing significant that concerns us at this time.

Got it. And then just a quick follow-up, could you provide a quick update to the tariff impact in 2019?

Yes, no change from what we disclosed in October. We had talked about it roughly, I think a $12 million to $13 million overall exposure for the total business. The substantial majority of that residing in our Fluid Handling business and with respect to offsetting actions, we have price that substantially covers that exposure.

Got it. Thank you.

You are welcome.

Thanks Drew.

Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Good morning, everyone.

Good morning, Nathan.

Good morning, Nathan.

Just like to start off in Fluid Handling, sequentially, the FX neutral orders down 7% in the third quarter, they were down to – I would have thought if anything the project environment should be improving or at least be stable at this point. Is that typically seasonality in the order book there or just any color you can give on why you think those order rates have declined a little bit over the last couple of quarters?

Yes, I think you hit it Nathan. We typically do see a bit of seasonality in the fourth quarter. I think your numbers are correct. I had mentioned, we are just below 2% in Q3 and right around that mid single-digit range in Q4 here on a sequential basis, excluding foreign exchange. So I think that was correct. We typically see a little bit of seasonality across both our process as well as our commercial side of the business.

Is there any additional color you can give on the process side versus the rest of the business in terms of where order rates were better or worse over the last couple of quarters?

Yes, I think just compared to the second half or the first and second half of the year, I think – I would say that there is a general consistency in terms of where we are seeing strength and a little bit of softness. Chemical continues to be strong for us. I would say that continued through the second half, particularly in the Americas and in China for that matter. General industrial, same thing strong in particular in the U.S., first half, second half, really no momentum shift there, just continuing to show some positive signs. Power, I would say the same in particular in the U.S. with particularly weak overall and the same in China and again no change necessarily in that regard.

So it sounds like no real underlying changes in the market structure or the trends that you’re seeing there?

I think that’s right Nathan overall that’s the message.

Okay and then on Payment & Merchandising and Currency, in particular, and I guess, having been over to Malta, one of the takeaways I had there was that I think there’s probably a fair amount of productivity improvements that you can make in that business and in that facility and I would imagine that those things are some things that you discovered post acquiring that business and I’m wondering if I can push you a little bit on the $1 of accretion by 2021 and ask you those kinds of things that you’ve learned in the 12 months that you’ve owned the business give you any comfort that there might be some upside to that $1 of accretion?

Yes, I would say, look, I think you know us fairly well in the way we drive the drive for results and look for opportunities and look, I don’t want to say, I’d rather not change the number at this point we feel I would say highly confident about the $1 I would not say that we are going to we’re not going to update that number at this point but we do have confidence in our ability to execute and look for additional opportunities as you point out.

I do appreciate the comment Nathan, so I can mention that to my team we also see the opportunity we are chasing it we have got a robust roadmap I’m really proud of the team and what we’re delivering to-date but as Rich mentioned, not enough to kind of adjust our accretion target at this point, but...

Okay fair enough. I understand. Thanks for the color. I will pass it on.

Sure. Thanks, Nathan.

Our next question comes from the line of Damian Karas with UBS. Please proceed with your question.

Good morning, Damian.

Hi, good morning, everyone.

Good morning.

So, I wanted to ask you about Crane Currency you had suggested previously that the large customer project could potentially repeat or extend through 2019 so I’m just at this point that’s changed, it appears, but I’m just wondering, if there is any chance that that could ultimately come back or is that effectively a thing of the past and I guess just kind of thinking about some of the lumpy projects that you do encounter in the business, is there anything in the funnel that could potentially show up at some point this year?

Damian, I would I think it’s consistent with what we just highlighted in the script but for guidance purposes, we have stripped out any impact for further orders from large customers just due to higher levels of uncertainty having said that, this is an important customer that we continue negotiations with into demand expectations in ’19 we don’t have anything firm that we can share at this point we hope to maybe update further on Investor Day, and then as the year progresses, it’s still uncertain and risky I think we’ve guided appropriately knowing that there might be some upside as well in terms of other projects that might supplement and offset some of the lumpiness and how we’re thinking about it, I’m very, very pleased with the funnel that the team has and what we’re chasing I would say that the bulk of those with these it’s a very long cycle of sales process some of the other large projects that we’re looking at and tracking that we feel bullish about, most likely will hit and impact 2020, not in 2019.

If I could just jump in here too just as we as you look at the guidance for 2019 for Payment, what I would also offer up or mention is that, the demand profile and sales profile from a core perspective excluding the last one-time project is a solid mid-single-digit number, and it’s actually a little bit stronger than solid mid-single – upper-single-digit number in 2019.

Okay, thanks. That’s helpful. And touching back on Fluid Handling margins you are guiding up 130 basis points on the restated number so could you just walk through the moving pieces on your expectation this year? You’ve talked in the past about kind of 30 points to 35 points of core incrementals you have got some uplift from the repositioning benefits this year, but I’m curious about that and price neutral still on excuse me, price cost neutral, but you have seen some of the bronze, iron and steel, alloy, copper, some of the things that you’ve been concerned about in this segment actually see some deflation any change in any potential that’s a tailwind in 2019?

Yes no, good question. I think if you look at what our implied leverage rate is for 2019 guidance when we have 4% a 4% top line guide and a 13% OP margin on a restated basis, we’re looking at leverage rates that are plus 90% so we’re driving quite a bit of productivity the repositioning is contributing significantly and then we’re leveraging the sales growth at 4% at those incrementals that you cited so those I would say it’s the volume leverage, the repositioning benefits primarily, and our pricing actions to offset the headwinds while they are dilutive to margins, right, because we’re essentially just offsetting we are covering and feel confident about those other actions to help us drive that leverage rate that’s in the plan.

Okay thanks. I will pass it on.

In terms of deflation, we don’t have any expectation of any significant material deflation in the plan.

Thanks, Damian.

Got it. Thanks guys.

Our next question comes from the line of Kristine Liwag with Bank of America. Please proceed with your question.

Good morning, guys.

Good morning.

Good morning.

Max, broadly speaking, where are you interested in growing through acquisitions? Do you expect to make bolt-on acquisitions on existing businesses or are you looking to make other transformational acquisitions like you did with Crane Currency?

So, I think we will continue to focus on priorities, Kristine, with the bolt-ons within Fluid Handling, A&E Payment & Merchandising Technologies. We have also – we are looking at near adjacencies not far and Crane Currency was an example of that. So we will continue along those lines prioritizing in the three major segments, bolt-ons and near adjacencies as we move forward.

That’s helpful. And in Fluid Handling, backlog was down 5% and orders were down 7% sequentially in the quarter what are you seeing that makes you confident that you can hit your core growth outlook of 4% in 2019 and how much of that 2019 expected revenue is already in the backlog?

Yes. So, Kristine, just to make sure, when we look at the year-over-year order profile on an FX-neutral basis, you look at each of the quarters for this year up 3%, up 8%, up 6% and then up just under 3% for the fourth quarter year-over-year we did see a bit of a sequential decline in the fourth quarter here as we talked about a little bit earlier, but mainly seasonal and if you take that and then sort of match that up against where our backlog is on an FX-neutral basis in Fluid Handling, you look year-over-year we’re up 10% so we have a pretty solid backlog as we think about 2019 in hitting a 4% core growth target coupled with what we’re seeing as just continued momentum in the business so combination of backlog and order profile to us supports that 4% frankly, we’re hoping we’re a little bit cautious on that 4%.

Okay. And the other question on how much of the 2019 revenue expectations already in the backlog?

For total Fluid Handling, so as you know, 50% of that business is more of a short-cycle business, the other 50% being process maybe I’d be guessing honestly, Kristine, to give you that kind of number, but maybe it’s 30% or 40% of total, something like that.

Great. Thank you, guys.

Thanks, Kristine.

Our next question comes from the line of Ken Herbert with Canaccord Genuity. Please proceed with your question.

Good morning, Ken.

Hi, good morning everybody.

Good morning.

I just wanted to follow-up on the...

Good morning.

Yes, good morning. Wanted to follow-up on the backlog question specifically in Aerospace & Electronics, I mean, you have had four quarters now, especially the last three have really strong backlog growth in that business is that as much or maybe can you parse that out between some of the share gains you’ve taken as well as maybe some of the build rates we’re seeing on the commercial side and improvement in military but any more detail or granularity on the backlog growth within that segment would be helpful.

Yes, I mean it’s been a broad-based growth in backlog it really hasn’t been something that was that’s specific to a particular part it’s been fairly widespread, right as I think as we think about 2019 in relation to that backlog, it will be a little bit more balanced between OEM and aftermarket for sure so the after the OEM contributing more in a relative basis now so it’s the narrow body building, without a doubt, commercial transport being probably the largest driver of that OEM, beyond that, it’s so widespread it’s so widespread, Ken, that it’s kind of hard to give you that sort of an overarching color there is just such nice growth throughout even on the spare side, right, the aftermarket is also fairly widespread, right, we have some movements quarter-to-quarter but between commercial spares, retrofit, military, military spares, it’s just it’s been solid.

Now, that’s helpful. Is it fair to say that then the majority of it is market versus Crane specific share gains?

Well, I mean, so we won all these programs I think you know how this works better than most for sure but these narrow body platforms that we’re on now, the 320, the 737, the E2, these are all things and then the engine wins that we’ve had.

No, I think the answer is no, it’s not just market it’s clearly share gains Ken, let us it’s a great question, let us put some added detail around this for Investor Day and we’ll be prepared to answer that one for you.

Okay, perfect. That’s helpful. And then just finally Max, I mean, just to follow up on the M&A question I mean, you are relatively under-levered now heading into 2019 and I can appreciate bolt-ons but can you just sort of reset us again in terms of what your comfort level is from a leverage or how much capacity you think you’ve got from a broader capital allocation standpoint this year, but they maybe more specifically to deploy the M&A obviously if the opportunities arise?

Yes, I’ll take that Ken. So just currently now at 2.5x, we are well in excess of $1 billion in terms of capacity for the right EBITDA that we’d be acquiring, right so when you look at that and how we would expect to de-leverage from there, I mean, today that sort of where we sit as we look out beyond 2019 or even as we build through 2019 and into that 2020-2021 range, we’re looking at $2 billion, $2.5 billion something around there.

That’s great. Thanks, Rich. I’ll get back in the queue.

Thanks, Ken.

Our next question comes from the line of Robert Barry with Buckingham. Please proceed with your question.

Hey, guys. Good morning.

Good morning, Rob. How are you?

For the record, I would like to go to Malta too please, any of the summer.

For the record.

Maybe you can join Nathan.

So just a few follow-ups on things you mentioned offsetting the tariff impact in Fluid with price so you’re actually getting price in Fluid now?

Yes, we are we have been clearly through ‘18, it was a big driver for us and we expect to continue to see that in ‘19.

Got it. And just to kind of level set everyone, the headwind from that large currency project, you said about $0.25 to earnings, that’s about how much it was when it came into the P&L?

Yes, it’s probably just a little bit north of that.

Got it. And on large projects I think can you remind me, was there a big one in Aero too or microwave project that you were lapping this year?

Yes, there was not as big as the prior one that we had, but there was a headwind there as well, that’s baked into our 2019 guidance it’s also contributing a little bit to our margin profile improvement next year, because it did it did mix us down a bit.

Got it. I mean, if I remember correctly, it was worth maybe about 3 points actually to the top line is that ballpark?

Over 2 years, starting in ‘17 second half of ‘17.

Got it. So the headwind year-over-year in ‘19 is just about 1.5?

I think that’s about right.

Got it. And could you just give us some color on the cadence of the earnings for 2019 if there is like normal seasonality of earnings and what you expected to be this year versus that normal?

Yes, there’s nothing I would say terribly out of the ordinary in the cadence through the year some years, we guide a little bit to saying, hey, Q1 is going to be a little bit softer and the cadence of earnings this year is a little bit more balanced but we will refresh everybody at Investor Day and make sure that we get you that added color, but I would say largely it’s going to be right around what I said.

Got it. And I guess just finally, I think Max, in your opening comments –

By the way, what I mean by – sorry, Rob, what I mean by balanced by the way is historically right. It’s not meant that every quarter is the same. What I mean by that is, there is a progression from Q1 through Q4 and it’s balanced in that regard just to make sure, you didn’t take me as equal each quarter, that’s not the case.

Okay. I mean, is there like a normal percentage allocation we should be thinking of?

Anymore where [ph] we’ve given guidance, but let’s take that for Investor Day, we’ll try to give some more color, Rob.

Okay. Just lastly, I think, Max you mentioned that in the opening comments, there was nothing eminent from an M&A perspective. Just curious what your appetite is on repos, just given you’ve got some cash, cash flow was good, nothing sounds eminent on M&A and what’s the –

Yes, we never – I think we’ll continue a balanced – our approach towards returning cash to shareholders if – I think it’s real early to look at any major buyback. We’ll have that capacity. If we can’t put it to use, we’ll certainly be looking at that, we never pre-announce. So, it certainly remains an option, but I remain optimistic that there – we’ll look for opportunities in 2019.

Great. Alright. Thanks. Thanks for that. Congrats again on a kind of solid finish. Take care.

Thank you, Rob.

Our next question comes from the line of Brett Linzey with Vertical Research Partners. Please proceed with your question.

Hi, good morning, guys.

Good morning.

Hey, just want to come back to Payments and then I guess more specifically on CPI, I mean, it sounds like it’s pretty broad-based in terms of the strength and the activity that you’re seeing there. What’s your growth assumption for the year for CPI and have you tried to size how large the Paypod opportunity could be and what that funnel might look like today?

Well, in terms of the funnel, we’ll have a chance on the growth side, but in terms of the funnel, we’ve got 80 units in the field already. We’ve got a funnel of 900 units. We’ll give you some more color in terms of how we’re sizing the market overall, but it’s progressing well. We’re pleased with the progress to-date.

What I would add on the growth side and specific to Payments even with the headwind that we have, we are going to see a low single-digit core growth here in 2019, so notwithstanding the headwind that we have.

Okay. And then any update on the retail self-checkout challenges, the state of conditions there and opportunities you might have in 2019?

It continues to strengthen. I mean, it’s been broad-based and continues to remain strong. So, we’re optimistic. Sorry, I couldn’t get it out.

Okay. And then I did want to have to ask an Engineered Materials question, but just given the de-stock you’ve seen and the channel adjustments in RV, what’s your visibility there? I know you’re guiding flat organic sales I think is what you said for the year. What’s your level of confidence and really what our customers is telling you?

Within Engineered Materials, I think we’ve taken a prudent top-down bottoms-up look at the marketplace and kind of triangulating with what we’re seeing. There was a de-stocking at the wholesale level, while retail sell-through still remains fairly strong. Well, they’re kind of flat and projections were anywhere from flat to up slightly for ‘19. I would say that when we try to triangulate, we think that for us and what we’re seeing, we see this continue through Q1 and then a bit of a bounce back through the balance of the year. And looking at the early indications from consumer shows well attended, should bode well for the retail, not to be down. I think we’ve looked at RVIA data at a range of 440,000 units to 480,000 units. We’ve dialed into the low end of that just to be a little prudent. So, we think we’ve got it set properly. We think it leads through the balance of Q1 and we have the proper guidance that we don’t expect to be any worse then.

Okay. But you think Q1, Q2 still finding a bottom and then maybe some improved activity as inventory is clear there in the back half?

We’re moving more towards Q1, it starts to recover by Q2.

Okay. Alright, great. Thanks guys.

Alright, Brett. Thank you.

Thanks.

Our next question comes from the line of Walter Liptak with Seaport Global. Please proceed with your question.

Hi, thanks. Good morning.

Good morning.

I want to stick with – good morning – I want to stick with Payments and understand the growth ex the large customer, low single-digit. But I wonder if we could just – going to a little detail within there, and I think you mentioned that there is a – you’re ramping a large customer, I think you said that in the opening remarks offset by maybe two large payment customers that are coming off and then a large customer coming out. Can you just provide a little bit more detail, I’ll be a little bit clear about that?

Yes, sure. Now, so overall just on the first comment on low single-digit, that was specific to a comment or a question that came up that was – so we have three businesses within Payment & Merchandising Technologies, we have Crane Merchandising, we have Crane Payment Innovations, which we refer often to Payment and then Crane Currency. The question earlier was about Crane Payment Innovations and notwithstanding a pretty sizable retail top-line headwind that we’re going to see in ‘19, because we delivered it in ‘18 that we were going to still see in ‘19, a low single-digit core growth rate, that was very specific to that business Payment, Crane Payment Innovations. Just to rephrase overall in terms of the headwinds, it’s two large programs that we had in ‘18 that were very nice customer projects for us. And with those not repeating next year, we therefore have this headwind that’s driving the 7% core overall decline in the business. If you were to exclude those, if you were to exclude those two projects, the underlying business overall for all of Payment is growing in the 3% to 5% range. So, I think that – I’m hopeful that, that answers your question, Walt?

Okay. Yes, got it. Okay. Thanks for –

Yes. In terms of anybody replacing, there isn’t any one large program that we’re banking on. The way we’re going to still drive that underlying 3% to 5% core growth is just broad-based demand that we’re seeing across the business. There isn’t any unique one-time customer wins that we are planning on in 2019.

Okay, great. I thought I heard you say, you’re ramping a large customer, but maybe you didn’t say that.

No.

Okay, great. And then looking at price cost, I wonder, if we could just kind of back up a little bit and think about it from 2018 and 2019. Overall, was there an overall headwind to profits because of price cost in 2018 and then what kind of recovery do you get in 2019?

I would say no. There – our teams responded in an excellent way through ‘18. It was – there was a gross headwind, but net-net, we were able to offset all material/inflation headwinds in 2018. 2019, we expect to do the same. We are planning for tariffs to hit us a bit, but we feel very confident that we will be able to offset that. And then our normal cadence of productivity and price around regular material inflation is more than offsetting the headwinds.

Okay, that sounds great. Okay. And then one last one, you talked a little bit about Europe related to Brexit impacts or no impact. I wonder, what you’re seeing in Rest of Europe. We’ve been hearing about some slowing, have you factored into your guidance for Europe, actually UK?

I think it’s – Walt, it’s mixed in the sense of depending what business we’re talking about. Payment & Merchandising Technologies is actually quite strong in Europe. I think in the food business, it’s slightly mixed and then when you get to the commercial side of some of the UK-based business, Middle East, it’s a little soft. So, a little mix, but even on the Payment & Merchandising actually strong.

Okay. Thanks for the answers. Appreciate it.

Thanks, Walt.

Thanks, Walt.

[Operator Instructions] Our next question is a follow-up question from Nathan Jones with Stifel. Please proceed with your question.

Hi, guys.

Nathan.

Yes, sir.

Just first off, I know, Jason is much too busy to go back to Malta. So, if Rob wants to go over there, I’m more than happy to offer my services than he just thought.

Here you go.

Just a couple of follow-up questions. I know, we on the call here seem to get a little bit focused on these large projects in Payment & Merchandising. And you guys have talked about at least mid-single-digit ex that. Maybe you could talk a little bit more about where you’re seeing traction. I know you’ve made a lot of growth investments in areas within Payment & Merchandising. What’s driving that continued growth there in the core outside of these large projects that create some noise in it?

Yes. And I – that’s – you’re going to get a lot more color on this on February 28, but – and I think it’s an extension of what you’ve heard for those that attended in Malvern. But a significant number of new product launches and solutions, it’s the intersection of sensors connectivity, software-as-a-service, applications from – I’ll give some brands here in terms of our product solutions, but from Compass to TELUS, Griffin Sync [ph, Alley [ph] on the payment side, cashless opportunities, we highlighted just – to those at Malvern, the Easitrax connected solution. We’re having games – in gaming, converting casinos already based purely on the value proposition of the connected solutions that Easitrax provides, we’ll remind you of all this in February on the Investor Day. When I think about Crane Currency and the investment in technology, not only on the U.S. side and what the opportunities are that we are chasing, but on the technology side with new features and solutions that our customers are valuing moving into brand protection. And again, as I mentioned, internationally, just a very long funnel that we are chasing. So, it really is quite broad-based in terms of hardware, software, sensing, connectivity, cashless solutions, and we’ll highlight all this again on – in February 28, Nathan.

Obviously, you guys have a very high market share in those businesses and you’re pumping a good amount of money in here to get these new products out, to get these connected solutions software-as-a-service products add into the market. Do you feel like this is something that your competitors are incapable of doing given your greater size, your greater financial resources, your greater ability to invest in these kinds of things where you are likely to catch up most if not all of these kinds of new markets that you’re opening up?

I never want to say never, I never want to get overly cocky. But clearly from a scale standpoint, we have a scale advantage at this point in these solutions. And even in addition to the high share, I would argue that we’re – we’ve got a team that’s really truly innovating and generating new market solutions. For example, pay tower and retail safe in Japan for the Japanese marketplace that is a new solution for that marketplace and we are on the front-end of investing and creating – helping to create that market in Japan in addition to Paypod and moving into some of the OEM space more broadly in Europe in the retail solutions. So just to highlight that as well.

And then just one last one on the growth investments that you got planned for 2019. Relative to 2018 are you at same level, a little bit higher a little bit lower?

This is on the – yes, roughly the same, is that what you’re referring to, you’re talking about this Payment space?

No, I’m talking about the – in the portfolio overall and the level of growth investments, are the level of growth investments up in 2019 over where they were in 2018 for the company in total? I’m just trying to figure out whether it’s a headwind to margins, tailwind to margins or nothing?

Yes, I would say it’s going to be modestly higher overall in terms of our investment profile. When you think about where most of them are coming from, it’s going to be in our Aerospace business, it’s going to be in Crane, it’s across-the-board. We’re not holding back on any of our investment opportunities and we’re growing on a core basis throughout. So, it’s going to be higher.

Cool. Thanks very much.

Thanks, Nathan.

Thank you.

Just –

Sorry, go ahead.

Nathan, just to build on your question, and I sort of heard this a little bit throughout, people asking about the one-offs, the headwinds, the large projects, what do I model in for this. As I look at and maybe this is another way of looking at this and perhaps we’ll share a little bit of this information on Investor Day as well. But in 2018, we delivered the $5.99 right. And if you pull out of that, the large contract from – just the additional accretion beyond what we expected at the beginning of the year for Venezuela and you pulled out the tax – you pulled out the tax benefit that we did receive here in the fourth quarter, you’re coming to a number of something like $5.60 to $5.65, something like that in 2018. When you compare that to 2017, that’s like 20%, 25% of earnings growth versus the 32% that’s reported right. So, if we remove those one-offs, we really grew something like 20% to 24%, if you wanted to isolate those one-offs. Compare that $560 million, call it $563 million, $565 million to the $635 million guidance, it would imply that we’re growing another 13%, right. And how are we doing that? And so I’m trying to get to some of them listening and I’m trying to get to some of the answers here or hopefully providing some of them. So, $563 million, call it to $635 million, I’ve got the repositioning benefits and other discrete items whether that’s more investments, less investments, whatever it is, call it roughly $0.20. I’m getting another $0.20 from moving operations from Sweden to Malta plus additional productivity and margin opportunity, Nathan, to your earlier question in the Currency business, that’s probably roughly another $0.20. So, I got $0.40 from those two items. Then I have headwinds of roughly $0.20 that could be in the form of pension, tax, a bunch of miscellaneous items. And then what’s my core business doing? And when you look at the core business, I’m probably growing in about 9% earnings, underneath those one-offs and one-time items. So maybe contributing roughly $0.50. So that’s just – it’s another way of I think pulling back and looking at what did we earn in 2018 and how do I think about 6% in 2019. So hopefully that helps. And again, we’ll pull some more information together on Investor Day and lay it out for you all.

That’s a good walk. I appreciate it, Rich. Even though I think – so, Nathan got a bonus answer.

Yes, he got a bonus answer.

Operator, any more questions in queue?

No, we have no further questions at this time.

Outstanding. Thank you, operator. We hope to see you all at our February 28, Investor Day event in New York City where we look forward to providing an informative discussion about our businesses and an update on current market conditions. We’ve got a lot to share and I’m extremely proud of our performance in 2018, as well as the consistently strong execution of Crane’s team of 12,000 associates. There are many great heroes across our businesses driving customer satisfaction, innovation, growth and execution. As the late great Stanley once said, every day, there is a new development, there is no limit to the things that are happening. That’s certainly how it feels around here and that’s what makes it so exciting. Thank you all. Have a great day.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.