8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 23, 2006

CRANE CO.

(Exact name of registrant as specified in its charter)

1-1657	DELAWARE	13-1952290
(Commission File Number)	(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

100 First Stamford Place, Stamford, CT	06902
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 363-7300

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THIS REPORT

Section 1 – REGISTRANT’S BUSINESS AND OPERATIONS

Item 1.01 Entry into a Definitive Agreement (amendment).

The Crane Co. Retirement Plan for Non-Employee Directors was amended effective December 5, 2005 to limit benefits available under that Plan to a maximum of $35,000 per year. A copy of the plan as amended is attached as Exhibit 10.1 to this Form 8-K.

Section 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On January 23, 2006, Crane Co. announced its results of operations for the quarter and year ended December 31, 2005. Copies of the related press release and quarterly financial data supplement are being furnished as Exhibits 99.1 and 99.2 to this Form 8-K.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Section 5 – CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.02(d) Election of Director.

The Board of Directors of Crane Co. elected Mr. Ronald F. McKenna to the Board of Directors, effective January 23, 2006, for a term ending on the date of the Annual Meeting in 2006. Mr. McKenna retired December 31, 2005 as President of Hamilton Sunstrand, a multi-billion dollar division of United Technologies Corporation (NYSE:UTX), a position he had held since 1999. He directed Hamilton Sunstrand’s worldwide operations, including its aerospace and industrial businesses.

A copy of the Crane Co. press release dated January 23, 2006 announcing the election of Mr. McKenna is attached as Exhibit 99.3.

SECTION 8 – OTHER EVENTS

ITEM 8.01 Other Events

The following information is provided in order to update the discussion in the Company’s previously filed reports with respect to its asbestos liability.

Information Regarding Claims and Costs

As of December 31, 2005, the Company was a defendant in cases filed in various state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:

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	Year Ended December 31,
	2005		2004		2003
Beginning claims	84,977		68,606		54,038
New claims	7,986		18,932		19,115
Settlements	(1,829	)	(1,038	)	(3,883	)
Dismissals	(2,117	)	(1,523	)	(664	)
Ending claims *	89,017		84,977		68,606

* Does not include 36,150 maritime actions that were filed in the United States District Court for the Northern District of Ohio and transferred to the Eastern District of Pennsylvania pursuant to an order by the Federal Judicial Panel on Multi-District Litigation (“MDL”). These claims have been placed on the inactive docket of cases that are administratively dismissed without prejudice in the MDL.

Of the 89,017 pending claims as of December 31, 2005, approximately 25,000 claims were pending in New York, approximately 33,000 claims were pending in Mississippi, approximately 9,000 claims were pending in Texas and approximately 4,000 claims were pending in Ohio, all jurisdictions in which recent legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.

Since the termination of the comprehensive master settlement agreement (“MSA”) on January 24, 2005 the Company has been resolving claims filed against it in the tort system. The Company has not reengaged in discussions with representatives of current or future asbestos claimants with respect to such a comprehensive settlement. While the Company believes that federal legislation to establish a trust fund to compensate asbestos claimants is the most appropriate solution to the asbestos litigation problem, there is substantial uncertainty regarding whether this will occur and, if so, when and on what terms. The Company remains committed to exploring all feasible alternatives available to resolve its asbestos liability in a manner consistent with the best interests of the Company’s shareholders.

The gross settlement and defense costs incurred (before insurance and tax effects) for the Company in the years ended December 31, 2005, 2004 and 2003 totaled $45.1 million, $40.9 million and $21.1 millions, respectively. In contrast to the recognition of settlement and defense costs that reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more. Cash payments of settlement amounts are not made until all releases and other required documentation are received by the Company, and payments of both settlement amounts and defense costs by insurers are subject to delays due to the transition from the Company’s primary insurers to its excess insurers. The Company’s total pre-tax cash payments for settlement and defense costs net of payments from insurers and including certain legal fees and expenses relating to the terminated MSA in the years ended December 31, 2005, 2004 and 2003 totaled $45.3 million, $28.1 million and $7.9 millions, respectively. Detailed below are the comparable amounts for the periods indicated.

	Year Ended December 31,							Cumulative to date through December 31, 2005
(In millions)	2005			2004		2003
Settlement costs incurred (1)	$	17.4		$	17.2	$	11.9	$	56.2
Defense costs incurred (1)		27.7			23.7		9.2		73.7
Total costs incurred	$	45.1		$	40.9	$	21.1	$	129.9
Pre-tax cash payments (2)	$	45.3		$	28.1	$	7.9	$	85.0
(Refund) payment associated with terminated MSA	$	(9.9	)	$	10.0			$	.1

(1) Before insurance recoveries and tax effects.

(2) Net of payments received from insurers. Amounts include advance payments to third parties that are reimbursable by insurers and certain legal fees and expenses related to the terminated MSA.

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The amounts shown for settlement and defense costs incurred, and cash payments, are not necessarily indicative of future period amounts, which may be higher or lower than those reported.

In 2006, the Company does not expect significant reimbursements from insurers as the Company’s cost sharing agreement with primary insurers has been essentially exhausted. Nonetheless, the Company continues to negotiate with various of its excess insurers whose policies provide substantial insurance coverage for asbestos liabilities. On July 22, 2005, the Company entered into an agreement to settle its insurance coverage claims for asbestos and other liabilities against certain underwriters at Lloyd’s of London reinsured by Equitas Limited for a total payment of $33 million. Under the agreement, $1.5 million was paid to the Company in the third quarter of 2005. The balance was placed into escrow for the payment of future asbestos claims and funds remaining in escrow will be paid to the Company on January 3, 2007 if no federal asbestos legislation is enacted by that date. If federal asbestos reform is enacted before January 3, 2007, the money then remaining in escrow would be paid to Equitas, subject to a payment of $1.5 million to the Company and a hold-back of certain funds in escrow for the payment of asbestos claims during the year following enactment of asbestos legislation. The Company’s settlement with Equitas resolves all its claims against pre-1993 policies issued to the Company by certain underwriters at Lloyd’s of London and reinsured by Equitas. The Company anticipates that one or more agreements with other excess insurers, such as coverage in place agreements, may be executed in 2006, and the Company believes that the payment terms of such agreements will be consistent with the overall estimated future reimbursement rate of 40%, although the actual reimbursement rate will vary from period to period due to policy terms and certain gaps in coverage as described below.

Effects on the Consolidated Financial Statements

The Company has retained the firm of Hamilton, Rabinovitz & Alschuler, Inc. (“HR&A”), a nationally recognized expert in the field, to assist management in estimating the Company’s asbestos liability in the tort system. HR&A reviewed information provided by the Company concerning claims filed, settled and dismissed, amounts paid in settlements and relevant claim information such as the nature of the asbestos-related disease asserted by the claimant, the jurisdiction where filed and the time lag from filing to disposition of the claim. The methodology used by HR&A to project future asbestos costs was based largely on the Company’s experience during 2004 and 2005 for claims filed, settled and dismissed. The Company’s experience was compared to the results of previously conducted epidemiological studies estimating the number of people likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, HR&A estimated the number of future claims that would be filed, as well as the related settlement or indemnity costs that would be incurred to resolve those claims. This methodology has been accepted by numerous courts and is the same methodology that is utilized by the expert who is routinely retained by the asbestos claimants committee in asbestos-related bankruptcies. After discussions with the Company, HR&A assumed that costs of defending asbestos claims in the tort system would increase to $37 million in 2006 and remain at that level (with increases of 4.5% per year for inflation) indexed to the number of estimated pending claims in future years. Based on this information, HR&A compiled an estimate of the Company’s asbestos liability for pending and future claims, based on claim experience over the past two years and covering claims expected to be filed through the year 2011. Although the methodology used by HR&A will also show claims and costs for periods subsequent to 2011 (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of uncertainty is too great to provide for reasonable estimation of the number of future claims, the nature of such claims or the cost to resolve them for years beyond 2011, particularly given the possibility of federal legislation within that time frame. While it is reasonably possible that the Company will incur additional charges for asbestos liabilities and defense costs in excess of the amounts currently provided, the Company does not believe that any such amount can be reasonably estimated beyond 2011. Accordingly, no accrual has been recorded for any costs which may be incurred beyond 2011.

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Management has made its best estimate of the costs through 2011 based on the analysis by HR&A completed in January 2006. A liability of $581.8 million has been recorded to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2011, of which approximately 56% is attributable to settlement and defense costs for future claims projected to be filed through 2011. The liability is reduced when cash payments are made in respect of settled claims and defense costs. It is not possible to forecast when cash payments related to the asbestos liability will be fully expended; however, it is expected such cash payments will continue for many years, due to the significant proportion of future claims included in the estimated asbestos liability. An asset of $234.6 million has been recorded representing the probable insurance reimbursement for such claims using the rate of 40% for future recoveries determined as described below.

A significant portion of the Company’s settlement and defense costs have been paid by its primary insurers and one umbrella insurer up to the agreed available limits of the applicable policies. The Company has substantial excess coverage policies that are also expected to respond to asbestos claims as settlements and other payments exhaust the underlying policies. The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance payment, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, the timing and amount of reimbursements will vary because the Company’s insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage. In addition to consulting with legal counsel on these insurance matters, the Company retained insurance consultants to assist management in the estimation of probable insurance recoveries based upon the aggregate liability estimate described above and assuming the continued viability of all solvent insurance carriers. After considering the foregoing factors and consulting with legal counsel and such insurance consultants, the Company determined its probable insurance reimbursement rate to be 40%.

Estimation of the Company’s ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims. The Company cautions that its estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on recent experience during the last few years that may not prove reliable as predictors. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would any substantial adverse verdict at trial. A legislative solution or a revised structured settlement transaction could also change the estimated liability.

Since many uncertainties exist surrounding asbestos litigation, the Company will continue to evaluate its estimated asbestos-related liability and corresponding estimated insurance reimbursement as well as the underlying assumptions and process used to derive these amounts. These uncertainties may result in the Company incurring future charges or increases to income to adjust the carrying value of recorded liabilities and assets, particularly if escalation in the number of claims and settlement and defense costs continues or if legislation or another alternative solution is implemented; however, the Company is currently unable to estimate such future changes. Although the resolution of these claims may take many years, the effect on results of operations and financial position in any given period from a revision to these estimates could be material.

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Certain Legal Proceedings

On January 21, 2005, five of the Company’s insurers within two corporate insurer groups filed suit in Connecticut state court seeking injunctive relief against the Company and declaratory relief against the Company and dozens of the Company’s other insurers. The suit also sought temporary and permanent injunctive relief restraining the Company from participating in any further settlement discussions with representatives of asbestos plaintiffs or agreeing to any settlement unless the Company permitted the plaintiff insurers to both participate in such discussions and have a meaningful opportunity to consider whether to consent to any proposed settlement, or unless the Company elected to waive coverage under the insurers’ policies. The plaintiffs also sought expedited discovery on, among other things, the Company’s proposed global settlement. At a hearing on February 22, 2005, the Company (i) contested the application for temporary injunctive relief and expedited discovery, (ii) moved to dismiss the count of the Complaint seeking injunctive relief on the grounds that the count was moot insofar as it addressed the proposed global settlement terminated on January 24, 2005 and not appropriate for determination insofar as it sought relief regarding any future negotiations with representatives of asbestos claimants, and (iii) moved to dismiss counts of the Complaint seeking declaratory relief with respect to the proposed global settlement as moot. At the hearing, the Court denied the plaintiff insurers’ application for temporary injunctive relief and expedited discovery. In denying temporary injunctive relief, the Court stated that the plaintiffs could not show irreparable injury and that the plaintiff insurers would have an adequate remedy at law. In light of the Court’s ruling and the Company’s motions to dismiss, the insurer plaintiffs sought and received leave to amend their Complaint to remove certain declaratory relief counts and to remove or restate the remaining allegations.

On April 8, 2005, the insurer plaintiffs filed an Amended Complaint raising five counts against the Company. The Amended Complaint seeks: (i) declaratory relief regarding the Company’s rights to coverage, if any, under the policies; (ii) declaratory relief regarding the Company’s alleged breaches of the policies in connection with an alleged increase in asbestos claim counts; (iii) a declaration of no coverage in connection with allegedly time-barred claims; (iv) declaratory relief against the Company and the other insurer defendants for allocation of damages that may be covered under the insurance policies; and (v) preliminary and permanent injunctive relief. On April 18, 2005, the Company moved to dismiss the claims for injunctive relief on the grounds that the Court had no jurisdiction to consider the claims because they were speculative and unripe. On October 19, 2005, the Court denied Crane Co.’s motion to dismiss, ruling that the injunctive claims were not unripe. Nonetheless, the Court noted that Crane Co. later could seek summary judgment in connection with the injunctive claims if discovery shows them to be without factual basis. The Company continues to believe it has meritorious defenses to all the counts of the Amended Complaint and intends to defend this matter vigorously.

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Section 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a)	None
(b)	None
(c)	Exhibits
10.1	Crane Co. Retirement Plan for Non-Employee Directors, as amended on December 5, 2005.
99.1	Earnings Press Release dated January 23, 2006, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the Quarter and Year Ended December 31, 2005.
99.3	Press release dated January 23, 2006, issued by Crane Co., regarding election of Ronald F. McKenna to the Board of Directors.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CRANE CO.
Dated: January 23, 2006	By:	/s/ J. Robert Vipond
		J. Robert Vipond Vice President, Finance and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Crane Co. Retirement Plan for Non-Employee Directors, as amended on December 5, 2005.
99.1	Earnings Press Release dated January 23, 2006, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the Quarter and Year Ended December 31, 2005.
99.3	Press release dated January 23, 2006, issued by Crane Co., regarding election of Ronald F. McKenna to the Board of Directors.

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EX-10.1

Exhibit 10.1

CRANE CO. RETIREMENT PLAN

FOR NON-EMPLOYEE DIRECTORS, AS AMENDED ON DECEMBER 5, 2005

Effective as of November 28, 1988, pursuant to authorization of its Board of Directors, Crane Co. hereby establishes the Crane Co. Retirement Plan for Non-Employee Directors, a non-qualified deferred compensation plan for the exclusive benefit of its non-employee directors.

INTRODUCTION

Name of Plan. The name of the plan is the “Crane Co. Retirement Plan for Non-Employee Directors”. It is also referred to as the “Plan.”

Effective Date. The effective date of the Plan is November 28, 1988.

DEFINITIONS

“Board” shall mean the Board of Directors of Crane Co.

“Company” shall mean Crane Co., a Delaware corporation.

“Compensation Committee” shall mean the Management Organization and Compensation Committee of the Board.

“Non-Employee Director” shall mean a director serving on the Board of the Company who is not also serving as an employee of the Company or any of its subsidiaries or affiliated business entities.

“Participant” shall mean a Non-Employee Director who is serving on the Board on the Effective Date or who thereafter becomes a member of the Board.

“Payment Dates” shall mean January 15, April 15, July 15 and October 15 of each calendar year, beginning no earlier than January 15, 1988.

“Plan Year” shall mean a calendar year.

“Retainer” shall mean the annual retainer fee in effect at the time that a Participant’s service on the Board is terminated.

“Change in Control” shall mean (i) the first purchase of shares pursuant to a tender offer or exchange offer (other than a tender offer or exchange offer by the Company) for all or part of the Company’s Common Stock or any securities convertible into such Common Stock, (ii) the receipt by the Company of a Schedule 13D or other advice indicating that a person is the “beneficial owner” (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange Act”) of 20% or more of the Company’s Common Stock calculated as provided in paragraph (d) of said Rule 13d-3, (iii) the date of approval by stockholders of the Company of an agreement providing for any consolidation or merger of the Company in which the Company will not be the continuing or surviving corporation or pursuant to which shares of Common Stock of the Company would be converted into cash, securities or other property, other than a merger of the Company in which the holders of Common Stock of the Company immediately prior to the merger would have the same proportion of ownership of common stock of the surviving corporation immediately after the merger, (iv) the date of the approval by stockholders of the Company of any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, (v) the adoption of any plan or proposal for the liquidation (but not a partial liquidation) or dissolution of the Company, or (vi) the date upon which the individuals who constitute the Board as of November 28, 1988 (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be for purposes of this agreement, considered as though such person were a member of the Incumbent Board.

BENEFITS UNDER THE PLAN

Eligibility to Receive Benefits Under the Plan . A Participant under this Plan shall be eligible to receive benefits under this Plan only if, at the time of termination from service on the Board, such Participant is not eligible to receive an accrued benefit under any qualified retirement plan sponsored by the Company or any of its subsidiaries or affiliated businesses for the period of service covered by this Plan.

Vesting of Benefits Under the Plan . Unless a Change in Control occurs, no Participant shall be entitled to or vested in any benefits until the Participant completes 24 full calendar months of service on the Board at which point a Participant shall be vested in 50% of the benefits payable under the Plan. For each 12 full calendar months of service completed thereafter a Participant shall be vested in an additional 10% of the benefits payable under the Plan until a Participant completes 84 full calendar months of service on the Board at which time the Participant’s benefits under the Plan shall be fully vested. If a Participant dies or becomes permanently and totally disabled, or if a Change in Control occurs, a Participant shall be fully vested in 100% of the benefit payable under the Plan. In the case of any break in service, all periods of service shall be aggregated to measure the total period of service.

Amount of Annual Benefit Payable Under the Plan . A Participant who is eligible to receive benefits under the Plan shall be entitled to receive at age 65, or upon termination from Service on the Board, whichever is later, an annual benefit equal to that portion of the amount of the Retainer at the time the Participant’s service on the Board is terminated in which the Participant is vested, or if less, $35,000 per annum. A Participant whose service on the Board has terminated before age 65 shall be entitled to receive at any age at or after age 55 the benefit to which he is entitled under the Plan on an actuarially reduced basis.

Time and Duration of Payments Under the Plan . Annual benefits under the Plan shall be paid in four equal installments on each Payment Date, and shall continue for a period equal to the number of years (and any portion thereof) which the Participant has served on the Board, provided, however, if a Change of Control occurs the period for which such payments shall be made shall be not less than seven (7) years. Except as provided in Article IV, and except for any Participant whose benefit payments under the Plan commence after December 6, 2004, no benefits shall be payable under the plan after the death of a Participant.

Payments in the Event of a Change in Control . In the event of a Change in Control, the Participant shall be entitled to receive at the time the Participant leaves the Board a lump sum which after the payment of all federal, state and local taxes applicable thereto at the time of payment would provide a retirement benefit equal to the actuarial equivalent of the benefit payable under the Plan. Actuarial equivalents for purposes of this paragraph 3.5 (lump sum distributions) and of paragraph 3.3 (non lump sum distributions) shall be computed using the factors prescribed in the Company’s Pension Plan for Non-Bargaining Employees or any successor plan at the time the computation is made. In the event it shall be determined that any payment whether paid or payable or distributed or distributable pursuant to the Plan would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or any interest or penalties with respect to such excise tax (such excise tax together with any interest or penalties are hereinafter referred to collectively as the “Excise Tax”) then the Participant shall be entitled to receive an additional payment (a “Gross-up Payment”) in an amount such that after payment by the Participant of all taxes (including any interest or penalties imposed with respect to such taxes) including any Excise Tax imposed upon the Gross-up Payment, the Participant retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments.

Non-Assignability of Interest . Except as otherwise provided in the next sentence, the interests herein and the right to receive benefits hereunder may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subjected to any charge or legal process, and if any attempt is made to do so, or a Participant becomes bankrupt, the interests under the Plan of the person affected may be terminated by the Compensation Committee, which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such interests as it deems appropriate. A Participant may transfer all or a portion of his right to receive benefits hereunder to one or more family members (as defined below) of such Participant or tax exempt organizations (within the meaning of Section 501(c)(3) of the Internal Revenue Code) as the Participant may designate from time to time. For purposes of the immediately preceding sentence, “family member” shall mean a Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant of the Participant), a trust in which these persons (or the Participant) have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests.

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SURVIVING SPOUSE BENEFITS

“Election Period” shall mean the period which begins thirty days prior to the day on which the Non-Employee Director will attain age 55 and ends on the earliest to occur of (a) the date of the Non-Employee Director’s death, (b) the date of the Non-Employee Director’s termination from service on the Board or (c) December 6, 2004.

“Election” shall mean a written election by a Non-Employee Director to receive a Joint and Survivor Benefit and/or a Pre-Retirement Spouse Benefit. Each Election must be addressed to the Committee and made during the Election Period. No consent of the spouse shall be required to make an Election or revoke any Election. Any Election may be revoked in writing by a Non-Employee Director by making a subsequent Election or by revoking a prior Election at any time during the Election Period. The number of revocations shall not be limited. Each Election may relate to a Joint and Survivor Benefit, or a Pre-Retirement Spouse Benefit or both.

“Joint and Survivor Benefit” - Each Non-Employee Director shall have the right to convert the benefits payable in accordance with Section 3.3 and 3.4 of the Plan into an actuarially reduced monthly annuity for the life of the Participant, with a survivor annuity for the life of the spouse which is 50% or 100% (at the option of the Participant) of the actuarially reduced amount of such annuity.

“Pre-Retirement Spouse Benefit” - Each Non-Employee Director who attains age 55 shall have the right to elect a survivor annuity payable monthly for the life of his or her surviving spouse commencing upon the death of the Non-Employee Director prior to commencement of pension payments and which is the actuarial equivalent of the annual benefit payable under Section 3.3 of the Plan at the date of death times the number of years such annual benefit is payable under Section 3.4 of the Plan, reduced by one percent (1%) for each birthday of the Non-Employee Director between the date of termination from service on the Board and the date of death.

PLAN ADMINISTRATION

Administration. The Plan shall be administered by the Compensation Committee. The Compensation Committee shall have the authority to interpret the Plan and any such interpretation shall be final and binding on all parties. The Board may amend or terminate the Plan at any time, provided that no such amendment or termination shall adversely affect the amounts payable or vested under the Plan before the time of such amendment or termination. The Company will pay all distributions made pursuant to the Plan and all costs, charges and expenses relating to the administration of the Plan.

MISCELLANEOUS PROVISIONS

Neither the establishment of the Plan, nor any action taken thereunder, shall in any way obligate (i) the Company to nominate a Non-Employee Director for re-election or to continue to retain a Non-Employee Director or (ii) a Non-Employee Director to agree to be nominated for re-election or to continue to serve on the Board.

The Plan shall be unfunded. All benefits payable under the Plan shall be paid from the general assets of the Company, which are subject to the claims of the Company’s general creditors.

The Plan shall be binding upon any successors to the Company by merger, acquisition, consolidation or otherwise.

The provisions of the Plan shall be governed by the laws of the State of Connecticut.

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EX-99.1

Exhibit 99.1

Crane Co. NEWS

Contact:

Richard E. Koch

Director, Investor Relations

and Corporate Communications

203-363-7352

www.craneco.com

CRANE CO. REPORTS FOURTH QUARTER EARNINGS OF $.58 PER SHARE,

RECORD EARNINGS FOR THE FULL YEAR

Fourth Quarter Highlights (vs. 2004):

• Earnings per share increased 12% to $.58 per share *

• Sales increased 4% to $506 million

• Operating profit increased 19% to $55.1 million *

• Operating profit margin was 10.9%, up from 9.5% *

• Cash provided from operating activities increased 66% to $77.4 million

Twelve Months Highlights (vs. 2004):

• Earnings per share increased 14% to $2.25 per share, a record for the company *

• Sales grew 9% to $2.1 billion

• Operating profit increased 15% to $214 million *

• Operating profit margin was 10.4%, up from 9.9% *

• Cash provided from operating activities increased 64% to $181.5 million

* In 2004, Crane recorded a pretax charge of $348 million (3Q’04 charge of $362 million; 4Q’04 reversal of $14 million) for certain asbestos and environmental matters and a fourth quarter after-tax gain on the sale of its Victaulic business of $6.5 million. The fourth quarter and annual comparisons shown above exclude these items. Including these items, the fourth quarter 2004 operating profit was $60.3 million, operating profit margin was 12.4% and net income was $.78 per share. Including these items, for the twelve months of 2004 the operating loss was $161.5 million, operating profit margin was (8.5%) and net loss was $1.78 per share. Please see the Non-GAAP Financial Measures table attached to this press release for details.

1

STAMFORD, CONNECTICUT – January 23, 2006 - Crane Co. (NYSE: CR), a diversified manufacturer of engineered industrial products, reports fourth quarter 2005 net income was $35.3 million, or $.58 per share, compared with net income of $46.4 million, or $.78 per share in the fourth quarter of 2004. Net income of $46.4 million in 2004 included a $6.5 million gain from the Victaulic divestiture, as well as a $9.1 million reduction in the Company’s asbestos liability. Excluding the gain and the adjustment, the Company’s net income would have been $30.7 million, or $.52 per share in the fourth quarter of 2004. Please see the Non-GAAP Financial Measures table attached to this press release for details.

Fourth quarter 2005 sales increased $20.7 million, or 4%, including core business growth of $26.9 million (5%) and unfavorable foreign currency translation of $6.2 million (1%). Operating profit of $55.1 million rose 19% compared with $46.2 million in the prior year quarter before the reduction in asbestos liability. After the reduction in asbestos liability, Crane reported an operating profit of $60.3 million in the fourth quarter of 2004.

Order backlog at December 31, 2005 totaled $597.1 million, compared with backlog of $604.8 million at September 30, 2005 and $566.7 million at December 31, 2004.

“Our fourth quarter earnings of $.58 per share were at the high end of our guidance of $.53 to $.58 per share,” said Crane Co. president and chief executive officer, Eric C. Fast. “Our fourth quarter 2005 operating profit margin of 10.9% exceeded the fourth quarter of 2004, excluding the asbestos adjustment, by 140 basis points, reflecting improved performance in Fluid Handling and

2

Engineered Materials. Fourth quarter 2005 cash flow was very strong, ending the year with $180.4 million in cash and we are entering 2006 with momentum to continue to grow both earnings and cash flow.”

Cash Flow and Financial Position

During the fourth quarter of 2005, before asbestos-related payments, the Company generated cash flow from operating activities of $98.2 million compared with $66.3 million generated in the fourth quarter of 2004. Asbestos-related fees and costs, net of insurance recoveries, were $20.8 million in the fourth quarter of 2005 up from $19.7 million in the fourth quarter of 2004. Capital expenditures were $9.5 million in the fourth quarter of 2005, compared with $6.9 million in the prior year period. Free cash flow (cash from operating activities less capital expenditures) was $67.8 million in the fourth quarter of 2005, up 71% compared with $39.7 million in the fourth quarter of 2004. In the third quarter of 2005, the dividend was increased by 25%, and as a result the Company paid $7.5 million in dividends to shareholders in the fourth quarter of 2005, compared with $5.9 million in the fourth quarter of 2004. Over the full year 2005, the Company generated free cash flow of $154.4 million compared with $88.5 million in 2004. (Please also see the attached Condensed Statement of Cash Flows and Non-GAAP Financial Measures.) Net debt to capital was 13.1% at December 31, 2005, compared with 27.1% at December 31, 2004.

Segment Results

All comparisons below refer to the fourth quarter 2005 versus the fourth quarter 2004, unless otherwise specified.

3

Aerospace & Electronics

	Fourth Quarter						Change
(dollars in millions)	2005			2004
Sales	$	145.2		$	138.8		$	6.4	5	%
Operating Profit	$	25.4		$	24.9		$	0.5	2	%
Profit Margin		17.5	%		18.0	%

The fourth quarter 2005 sales increase of $6.4 million reflected a sales increase of $8.7 million in the Aerospace Group partially offset by a decrease of $2.3 million in the Electronics Group. Segment operating profit increased by $0.5 million with a $2.0 million increase in Aerospace profits partially offset by a $1.5 million reduction in the Electronics Group’s results.

Aerospace Group sales of $88.0 million increased $8.7 million, or 11%, from $79.3 million in the prior year period. Sales increased largely due to higher OEM volume and to a lesser extent higher after-market volume, particularly commercial spares volume. The increase in OEM volume included higher large-commercial, regional and business jet aircraft delivery rates. Operating profit was higher than the prior year because of the favorable impact of higher volumes. However, profit margin percent was slightly lower due to higher engineering investment in new programs and higher material costs.

With lower sales primarily Electronic Manufacturing Solutions, Electronics Group sales of $57.2 million decreased $2.3 million, or 4%, from $59.5 million in the prior year period. Lower sales and higher costs contributed to the 14%, or $1.5 million, decrease in operating profit from the prior year. While slightly below last year and the third quarter, margins remained at acceptable levels.

4

The Aerospace & Electronics Segment backlog was $365.0 million at December 31, 2005, compared with $366.1 million at September 30, 2005 and $341.5 million at December 31, 2004.

Engineered Materials

	Fourth Quarter						Change
(dollars in millions)	2005			2004
Sales	$	69.3		$	62.9		$	6.4	10	%
Operating Profit	$	12.1		$	9.5		$	2.6	28	%
Profit Margin		17.5	%		15.1	%

The fourth quarter 2005 sales increase of $6.4 million, or 10%, reflected price increases, which more than offset the effect of slightly lower unit sales across most of the served markets. Profit margin increased to 17.5%, effectively leveraging the increased sales.

Merchandising Systems

	Fourth Quarter						Change
(dollars in millions)	2005			2004
Sales	$	36.2		$	43.1		$	(6.9	)	(16	)%
Operating Profit	$	1.4		$	2.0		$	(0.6	)	(27	)%
Profit Margin		4.0	%		4.5	%

Merchandising Systems sales declined $6.9 million, or 16%, reflecting lower volumes (14%) and unfavorable foreign exchange rates (2%). European and North American vending sales were significantly below last year as the vending industry has experienced softer sales in the second half of 2005 as operators struggled with lower profitability from higher gas prices and food costs.

The effect of the reduced sales volume in vending was largely offset by effective control of costs with profit margins at 4.0%, down slightly from 4.5%.

5

Fluid Handling

	Fourth Quarter						Change
(dollars in millions)	2005			2004
Sales	$	235.5		$	222.5		$	13.0	6	%
Operating Profit	$	22.5		$	12.7		$	9.8	78	%
Profit Margin		9.6	%		5.7	%

The fourth quarter sales increase of $13.0 million, or 6%, included $17.4 million (8%) from core businesses and $4.4 million (2%) from unfavorable foreign currency translation. Operating profit increased 78%, and margin continued to improve, both versus the third quarter of 2005 and the fourth quarter of 2004, due to strengthening market demand, productivity improvements and customer price increases.

Valve Group sales of $122.4 million increased $2.2 million, or 2%, from the prior year. Core sales increased $6.0 million (5%) from increased market demand for industrial valves and strengthening pricing across all the valve product businesses, partially offset by $3.8 million (3%) of unfavorable foreign currency translation. Operating profit increased 93% versus the prior year, reflecting higher selling prices and volumes, and improved operating costs which more than offset higher material costs. Profit margin of approximately 8% improved from approximately 4% in the prior year.

Crane Ltd. sales of $29.1 million decreased $1.0 million, or 3%, as core business growth of 8% was offset by $1.9 million of unfavorable foreign currency translation (6%) and the absence of revenue from the Victaulic business which was sold in December 2004 (5%). Profit margin improved slightly to approximately 12% from 11% in the prior year period. Favorable product mix and the benefits of product sourced from low cost countries more than offset higher pension costs.

6

Crane Pumps & Systems sales of $27.5 million increased $3.5 million, or 15%, over the fourth quarter of 2004. Profit margin of approximately 13% was up from approximately 8% in the prior year due to productivity gains realized from the Salem, Ohio closure, increased low cost country sourcing, and the ability to effectively leverage the incremental volume.

Crane Supply sales of $41.0 million increased $4.4 million, or 12%, of which 8% was from core business selling price and volume growth and 4% was from favorable foreign currency translation. Profit margin was approximately 10%, compared with approximately 9% in the prior year, as price increases and cost savings initiatives more than offset higher material costs.

Resistoflex-Industrial sales of $13.4 million increased $2.3 million, or 21%, primarily because of the acquisition of Edlon PSI in August 2005. Profit margin was approximately 12%, compared with approximately 9% in the prior year period primarily because of customer price increases and the profit associated with Edlon.

The Fluid Handling Segment backlog was $188.8 million at December 31, 2005, compared with $194.4 million at September 30, 2005 and $183.2 million at December 31, 2004.

7

Controls

	Fourth Quarter						Change
(dollars in millions)	2005			2004
Sales	$	20.2		$	18.5		$	1.7	9	%
Operating Profit	$	2.0		$	1.7		$	0.3	16	%
Profit Margin		9.8	%		9.3	%

Sales improvements of $1.7 million, or 9%, were largely attributable to increased demand for products in the oil and gas exploration, and gas transmission markets. Operating profit was higher than the prior year period as volume gains and sales price increases more than offset higher material and labor costs.

First Quarter and Full Year 2006 Guidance, and the Impact of the CashCode Acquisition

Management expects earnings in the first quarter 2006 to be in the range of $.46 to $.56 per share, compared to $.42 per share in the first quarter 2005. Earnings in 2006 are being adversely impacted by approximately $.02 per share per quarter, or about $.09 per share for the year, as a result of the new accounting treatment requiring the expensing of stock options. On a full year basis, management is maintaining its 2006 earnings per share guidance from $2.45 to $2.60 per share. If Crane had expensed options in 2005, earnings per share would have decreased from $2.25 (as reported) to $2.16 (as adjusted). Crane’s 2006 EPS guidance represents a 13 – 20% increase above its adjusted EPS for 2005.

Management continues to expect that free cash flow (cash flow from operations less capital expenditures) in 2006 will be approximately $165 million ($154 million in 2005). Cash provided from operations before net asbestos payments and capital expenditures is expected to be $240 million ($217 million in 2005). Net asbestos payments (including insurance reimbursements) are projected at $45 million ($45.3 million in 2005) and capital expenditures are expected to be approximately $30 million ($27.2 million in 2005). In 2005, the Company received a $9.9 million refund associated with the termination of the Master Settlement Agreement. Please see the Non-GAAP Financial Measures table attached to this press release for details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

8

As previously announced, on January 17, 2006, Crane acquired CashCode Co. Inc., a privately held company specializing in niche applications for banknote validation, storage and recycling devices for use in vending, gaming, retail and transportation applications. The purchase price was $86 million in cash. CashCode had sales of approximately $48 million in 2005. It is expected that CashCode will be modestly accretive to earnings in 2006.

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter’s financial results on Tuesday, January 24th, 2006 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call at http://www.craneco.com. An archived webcast will also be available to replay this conference call directly from the Company’s website.

Crane Co. is a diversified manufacturer of engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 10,500 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

9

This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are a number of factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking statements. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

10

EX-99.2

Exhibit 99.2

CRANE CO.

Consolidated Income Statement Data

(in thousands, except per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004
Net Sales:
Aerospace & Electronics	$	145,202		$	138,767		$	554,445		$	511,624
Engineered Materials		69,274			62,942			304,824			276,186
Merchandising Systems		36,248			43,086			166,298			169,205
Fluid Handling		235,456			222,507			953,961			861,937
Controls		20,248			18,515			82,143			71,950
Intersegment Elimination		(90	)		(215	)		(422	)		(567	)
Total Net Sales	$	506,338		$	485,602		$	2,061,249		$	1,890,335
Operating Profit:
Aerospace & Electronics	$	25,457		$	24,928		$	86,136		$	92,650
Engineered Materials		12,147			9,476			62,982			54,072
Merchandising Systems		1,434			1,957			12,797			9,722
Fluid Handling		22,545			12,659			76,132			52,152
Controls		1,986			1,714			7,274			5,529
Corporate		(8,454	)		(4,493	)		(31,699	)		(27,821	)
Operating Profit before Income (Charge)		55,115			46,241			213,622			186,304
Asbestos and Environmental Income (Charge)		—			14,019			—			(347,794	)
Total Operating Profit (Loss)		55,115			60,260			213,622			(161,490	)
Interest Income		1,368			121			2,372			1,366
Interest Expense		(5,391	)		(5,114	)		(22,416	)		(23,161	)
Miscellaneous- Net		101			15,178			2,946			15,115
Income (Loss) Before Income Taxes		51,193			70,445			196,524			(168,170	)
Provision (Benefit) for Income Taxes		15,870			24,075			60,487			(62,749	)
Net Income (Loss)	$	35,323		$	46,370		$	136,037		$	(105,421	)
Share Data:
Net Income (Loss) Per Diluted Share	$	0.58		$	0.78		$	2.25		$	(1.78	)
Average Diluted Shares Outstanding		60,928			59,750			60,413			59,251
Average Basic Shares Outstanding		60,233			59,123			59,816			59,251
Supplemental Data:
Cost of Sales	$	347,630		$	328,531		$	1,418,662		$	1,646,668
Selling, General & Administrative		103,593			96,811			428,965			405,157
Depreciation and Amortization *		12,754			13,732			55,715			55,716

* Amount included within cost of sales and selling, general & administrative costs.

CRANE CO.

Condensed Consolidated Balance Sheets

(in thousands)

	December 31, 2005		December 31, 2004
ASSETS
Current Assets
Cash and Cash Equivalents	$	180,392	$	50,727
Accounts Receivable		289,521		308,140
Inventories		272,354		284,291
Other Current Assets		56,128		59,648
Total Current Assets		798,395		702,806
Property, Plant and Equipment		263,791		287,596
Insurance Receivable - Asbestos		224,600		245,160
Other Assets		284,345		301,865
Goodwill		568,355		579,081
Total Assets	$	2,139,486	$	2,116,508
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current Maturities of Long-Term Debt and Loans Payable	$	254	$	371
Accounts Payable		149,647		161,477
Current Asbestos Liability		55,000		67,800
Accrued Liabilities		174,366		157,730
Income Taxes		19,322		22,636
Total Current Liabilities		398,589		410,014
Long-Term Debt		293,248		296,592
Deferred Income Taxes		71,406		71,367
Long-Term Asbestos Liability		526,830		581,914
Pension, Postretirement and Other Liabilities		96,119		92,927
Shareholders’ Equity		753,294		663,694
Total Liabilities and Shareholders’ Equity	$	2,139,486	$	2,116,508

CRANE CO.

Condensed Consolidated Statements of Cash Flows

(in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004
Operating Activities:
Net income (loss)	$	35,323		$	46,370		$	136,037		$	(105,421	)
Charges for asbestos and environmental - net of tax		—			(9,112	)		—			229,272
Gain on divestiture		—			(9,468	)		—			(9,468	)
Income from joint venture		(1,489	)		(1,313	)		(5,965	)		(4,041	)
Depreciation and amortization		12,754			13,732			55,715			55,716
Cash provided by (used for) operating working capital		40,095			11,646			5,032			(27,403	)
Other		11,474			14,454			26,139			10,365
Subtotal		98,157			66,309			216,958			149,020
Payments for asbestos-related fees and costs, net		(20,782	)		(9,720	)		(45,338	)		(28,056	)
(Payment) refund associated with terminated Master Settlement Agreement		—			(10,000	)		9,925			(10,000	)
Total provided from operating activities		77,375			46,589			181,545			110,964
Investing Activities:
Capital expenditures		(9,530	)		(6,855	)		(27,164	)		(22,507	)
Proceeds from disposition of capital assets		4,770			2,832			6,339			3,738
Payments for acquisitions, net		(1,666	)		—			(8,823	)		(49,957	)
Proceeds from divestitures		—			15,320			—			15,320
Total (used for) provided from investing activities		(6,426	)		11,297			(29,648	)		(53,406	)
Financing Activities:
Dividends paid		(7,533	)		(5,918	)		(26,962	)		(23,686	)
Settlement of treasury shares acquired on the open market		—			—			—			(42,748	)
Stock options exercised - net of shares reacquired		7,990			4,873			18,624			14,509
Repayment of debt, net		(1,427	)		(40,879	)		(4,843	)		(99,868	)
Total used for financing activities		(970	)		(41,924	)		(13,181	)		(151,793	)
Effect of exchange rate on cash and cash equivalents		(3,191	)		2,566			(9,051	)		2,444
Increase (decrease) in cash and cash equivalents		66,788			18,528			129,665			(91,791	)
Cash and cash equivalents at beginning of period		113,604			32,199			50,727			142,518
Cash and cash equivalents at end of period	$	180,392		$	50,727		$	180,392		$	50,727

CRANE CO.

Order Backlog

(in thousands)

	December 31, 2005		September 30, 2005		June 30, 2005		March 31, 2005		December 31, 2004
Aerospace & Electronics	$	365,010	$	366,109	$	370,913	$	367,472	$	341,505
Engineered Materials		17,241		20,673		15,964		19,414		16,376
Merchandising Systems		9,183		8,362		9,298		9,469		11,998
Fluid Handling		188,832		194,436		201,768		200,578		183,158
Controls		16,864		15,182		14,952		15,625		13,696
Total Backlog	$	597,130	$	604,762	$	612,895	$	612,558	$	566,733

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2005			2004			2006 Estimate			2005			2004
INCOME ITEMS:
Operating Profit (Loss)	$	55,115		$	60,260					$	213,622		$	(161,490	)
Asbestos and Environmental (Income) Charges - Pre-Tax					(14,019	)								347,794
Operating Profit before Asbestos and Environmental	$	55,115		$	46,241					$	213,622		$	186,304
Operating Profit Margin %
Operating Profit (Loss)		10.9	%		12.4	%					10.4	%		(8.5	)%
Asbestos and Environmental (Income) Charges - Pre-Tax					(2.9	)								18.4
Operating Profit before Asbestos and Environmental		10.9	%		9.5	%					10.4	%		9.9	%
Net Income (Loss)	$	35,323		$	46,370					$	136,037		$	(105,421	)
Asbestos and Environmental (Income) Charges - Net of Tax					(9,112	)								229,272
Gain on Victaulic Divestiture - Net of Tax					(6,533	)								(6,533	)
Net Income before Asbestos, Environmental and Gain on Victaulic	$	35,323		$	30,725					$	136,037		$	117,318
Per Diluted Share:
Net Income (Loss)	$	0.58		$	0.78					$	2.25		$	(1.78	)
Asbestos and Environmental (Income) Charges - Net of Tax					(0.15	)								3.87
Gain on Victaulic Divestiture - Net of Tax					(0.11	)								(0.11	)
Net Income before Asbestos, Environmental and Gain on Victaulic	$	0.58		$	0.52					$	2.25		$	1.98
CASH FLOW ITEMS:
Cash Provided from Operating Activities before Asbestos - Related Payments	$	98,157		$	66,309		$	240,000		$	216,958		$	149,020
Net Asbestos Payments		(20,782	)		(9,720	)		(45,000	)		(45,338	) (a)		(28,056	) (a)
(Payment) Refund Associated with Terminated Master Settlement Agreement					(10,000	)					9,925			(10,000	)
Cash Provided from Operating Activities		77,375			46,589			195,000			181,545			110,964
Less: Capital Expenditures		(9,530	)		(6,855	)		(30,000	)		(27,164	)		(22,507	)
Free Cash Flow	$	67,845		$	39,734		$	165,000		$	154,381		$	88,457

(a) Includes certain legal fees and expenses relating to the terminated Master Settlement Agreement amounting to $5.1 million in 2005 and $7.9 million in 2004.

Certain non-GAAP measures have been provided to facilitate comparison with the prior year.

Free cash flow provides supplemental information to assist management and certain investors in analyzing the Company’s ability to generate positive cash flow.

Free cash flow is considered a measure of cash generation and should be considered in addition to, but not as a substitute for, other measures reported in accordance with generally accepted accounting principles and may be inconsistent with similar measures presented by other companies.

EX-99.3

Exhibit 99.3

Crane Co. NEWS

Contact:

Richard E. Koch

Director, Investor Relations

and Corporate Communications

203-363-7352

www.craneco.com

CRANE CO. ELECTS NEW DIRECTOR

STAMFORD, CONNECTICUT – January 23, 2006 - Crane Co. (NYSE:CR), a diversified manufacturer of engineered industrial products, announced today that its Board of Directors has elected Ronald F. McKenna as a director of Crane Co. Mr. McKenna was president and chief executive officer of Hamilton Sundstrand, a division of United Technologies Corporation, from 1999 until his retirement on December 31, 2005. From 1969 to 1999, Mr. McKenna held a number of operating and engineering management positions with increasing responsibility at Sundstrand Corporation, including Executive Vice President and Chief Operating Officer from 1996 to 1999.

R. S. Evans, chairman of the board, stated: “Ron McKenna has had a long and productive career in aerospace and industrial markets, with senior executive experience serving substantial companies in the U.S. and internationally. His election was proposed by the Company’s nominating and governance committee, and we are very pleased that he has agreed to join our board of directors.”

Crane Co. is a diversified manufacturer of engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems Fluid Handling, and Controls. Crane has approximately 10,500 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.