8-K

UNITED STATES

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): October 27, 2008

CRANE CO.

(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation)

1-1657	13-1952290
(Commission File Number)	(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))

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2008, Crane Co. announced its results of operations for the quarter ended September 30, 2008. 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 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of September 30, 2008, 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:

	Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
	2008		2007		2008		2007		2007
Beginning claims	81,979		84,652		80,999		85,941		85,941
New claims	936		694		3,585		2,691		3,417
Settlements*	(323	)	(109	)	(963	)	(909	)	(1,441	)
Dismissals	(6,411	)	(3,986	)	(7,440	)	(6,472	)	(6,918	)
Ending claims **	76,181		81,251		76,181		81,251		80,999

* Includes Norris judgment payment.

** Does not include 36,375 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 76,181 pending claims as of September 30, 2008, approximately 25,000 claims were pending in New York, approximately 18,500 claims were pending in Mississippi, approximately 9,400 claims were pending in Texas and approximately 3,800 claims were pending in Ohio, all jurisdictions in which legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.

Substantially all of the claims the Company resolves are concluded through settlements. The Company tried the Joseph Norris asbestos claim (the “Norris Claim”) to verdict in California, however, and received an adverse jury verdict on September 15, 2006. On October 10, 2006, the court entered judgment on this verdict against the Company in the amount of $2.15 million, together with interest thereon at the rate of 10% per annum until paid. The Company appealed the judgment, and on June 25, 2008, the Supreme Court of California declined to review an appellate court ruling adverse to the Company. The final judgment amount of $2.54 million was paid on July 14, 2008.

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During the fourth quarter of 2007 and the first quarter of 2008, the Company tried several cases resulting in defense verdicts by the jury or directed verdicts for the defense by the court. However, on March 14, 2008, the Company received an adverse verdict in the James Baccus claim in Philadelphia, Pennsylvania, with compensatory damages of $2.45 million and additional damages of $11.9 million. The Company has filed a post-trial motion asserting numerous errors in the trial proceedings, and no judgment has been entered on the trial verdict. The Company intends to pursue all available rights to appeal the verdict.

On May 16, 2008 the Company received an adverse verdict in the Chief Brewer claim in Los Angeles, California. The amount of the judgment entered was approximately $679,000 plus interest and costs. Such judgment amounts are not included in the Company’s incurred costs until available appeals are exhausted and the final payment amount is determined. The Company is pursuing post-trial motions and an appeal, as necessary.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) for the Company in the nine-month periods ended September 30, 2008 and 2007 totaled $71.1 million and $64.7 million, 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, and may show some fluctuation from quarter to quarter. Cash payments of settlement amounts are not made until all releases and other required documentation are received by the Company, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements. The Company’s total pre-tax cash receipts/payments for settlement and defense costs, including payments from insurers, in the nine-month periods ended September 30, 2008 and 2007 totaled a $34.9 million net payment and $7.3 million net receipt (reflecting the January 2007 receipt of $31.5 million in previously escrowed funds from Equitas), respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)	Three Months Ended September 30,				Nine Months Ended September 30,					Year Ended December 31,		Cumulative to Date Through September 30,
	2008		2007		2008		2007			2007		2008
Settlement / indemnity costs incurred (1)	$	15.2	$	11.2	$	33.0	$	30.5		$	41.6	$	157.1
Defense costs incurred (1)		12.5		12.2		38.1		34.2			45.9		200.5
Total costs incurred	$	27.7	$	23.4	$	71.1	$	64.7		$	87.5	$	357.6
Pre-tax cash payments/(receipts)(2)	$	18.3	$	7.9	$	34.9	$	(7.3	)	$	10.2	$	170.8

(1) Before insurance recoveries and tax effects.

(2) Net of payments received from insurers, including a $31.5 million payment from Equitas in January 2007. Cumulative amounts include certain legal fees and expenses related to the terminated MSA in 2005.

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.

Effects on the Condensed Consolidated Financial Statements

The Company has retained the firm of Hamilton, Rabinovitz & Associates, 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 reviews 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 is based largely on the Company’s experience during the two full preceding calendar years (and additional quarterly periods to the estimate date) for claims filed, settled and dismissed. The Company’s experience is then compared to the results of previously conducted epidemiological studies estimating the number of individuals 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 estimates the number of future claims

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that would be filed against the Company, 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. After discussions with the Company, HR&A augments its liability estimate for the costs of defending asbestos claims in the tort system using a forecast from the Company which is based upon discussions with its defense counsel. Based on this information, HR&A compiles an estimate of the Company’s asbestos liability for pending and future claims, based on claim experience over the past two to three years and covering claims expected to be filed through the indicated period. Although the methodology used by HR&A will also show claims and costs for subsequent periods (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of uncertainty regarding the various factors used in estimating future asbestos costs 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 the indicated estimate.

In the Company’s view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year, the jurisdictions where such claims are filed and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected over the past five to ten years by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which are estimated to provide $25 billion for payments to current and future claimants. These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of the Company’s asbestos liability, and these effects do not move in a linear fashion but rather change over multi-year periods. Accordingly, the Company’s management monitors these trend factors over time and periodically assesses whether an alternative forecast period is appropriate.

Liability Estimate. With the assistance of HR&A, effective as of September 30, 2007, the Company updated and extended its estimate of the asbestos liability, including the costs of settlement or indemnity payments and defense costs relating to currently pending claims and future claims projected to be filed against the Company through 2017. The Company’s previous estimate was for asbestos claims filed through 2011. As a result of this updated estimate, the Company recorded an additional liability of $586 million as of September 30, 2007. The Company’s decision to take this action at such date was based on several factors. First, the number of asbestos claims being filed against the Company has moderated substantially over the past several years, and in the Company’s opinion, the outlook for asbestos claims expected to be filed and resolved in the forecast period is reasonably stable. Second, these claim trends are particularly true for mesothelioma claims, which although constituting only 5% of the Company’s total pending asbestos claims, have accounted for approximately 90% of the Company’s aggregate settlement and defense costs over the past five years. Third, federal legislation that would significantly change the nature of asbestos litigation failed to pass in 2006, and in the Company’s opinion, the prospects for such legislation at the federal level are remote. Fourth, there have been significant actions taken by certain state legislatures and courts over the past several years that have reduced the number and types of claims that can proceed to trial, which has been a significant factor in stabilizing the asbestos claim activity. Fifth, the Company has now entered into coverage-in-place agreements with a majority of its excess insurers, which enables the Company to project a more stable relationship between settlement and defense costs paid by the Company and reimbursements from its insurers. Taking all of these factors into account, the Company believes that it can reasonably estimate the asbestos liability for pending claims and future claims to be filed through 2017. While it is probable 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 2017. Accordingly, no accrual has been recorded for any costs which may be incurred for claims made subsequent to 2017.

Management has made its best estimate of the costs through 2017 based on the analysis by HR&A completed in October 2007. A liability of $1,055 million was recorded as of September 30, 2007 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2017, of which approximately 68% is attributable to settlement and defense costs for future claims projected to be filed through 2017. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $962 million as of September 30, 2008. 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 a number of years past 2017, due to the significant proportion of future claims included in the estimated asbestos liability and the lag time between the date a claim is filed and when it is resolved.

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Insurance Coverage and Receivables. Prior to 2005, a significant portion of the Company’s settlement and defense costs were paid by its primary insurers. With the exhaustion of that primary coverage, the Company began negotiations with its excess insurers to reimburse the Company for a portion of its settlement and defense costs as incurred. To date, the Company has entered into agreements providing for such reimbursements, known as “coverage-in-place”, with nine of its excess insurer groups. Under such coverage-in-place agreements, an insurer’s policies remain in force and the insurer undertakes to provide coverage for the Company’s present and future asbestos claims on specified terms and conditions that address, among other things, the share of asbestos claims costs to be paid by the insurer, payment terms, claims handling procedures and the expiration of the insurer’s obligations. On March 3, 2008, the Company reached agreement with certain London Market Insurance Companies, North River Insurance Company and TIG Insurance Company, confirming the aggregate amount of available coverage under certain London policies and setting forth a schedule for future reimbursement payments to the Company based on aggregate indemnity and defense payments made. In addition, with three of its excess insurer groups, the Company entered into policy buyout agreements, settling all asbestos and other coverage obligations for an agreed sum, totaling $46.8 million in aggregate. Reimbursements from such insurers for past and ongoing settlement and defense costs allocable to their policies have been made as coverage-in-place and other agreements are reached with such insurers. All of these agreements include provisions for mutual releases, indemnification of the insurer and, for coverage-in-place, claims handling procedures. The Company is in discussions with or expects to enter into additional coverage-in-place or other agreements with other of its solvent excess insurers not currently subject to a settlement agreement whose policies are expected to respond to the aggregate costs included in the updated liability estimate. If it is not successful in concluding such coverage-in-place or other agreements with such insurers, then the Company anticipates that it would pursue litigation to enforce its rights under such insurers’ policies.

In conjunction with developing the aggregate liability estimate referenced above, the Company also developed an estimate of probable insurance recoveries for its asbestos liabilities. In developing this estimate, the Company considered its coverage-in-place and other settlement agreements described above, as well as 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 for the aggregate liability recorded as of September 30, 2007 to be 33%. An asset of $351 million was recorded as of September 30, 2007 representing the probable insurance reimbursement for such claims. The asset is reduced as reimbursements and other payments from insurers are received. The asset was $310 million as of September 30, 2008.

Uncertainties. 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 substantial adverse verdicts at trial. A legislative solution or a revised structured settlement transaction could also change the estimated liability.

The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance payments, as do a number of additional factors. These additional factors

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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, due to the uncertainties inherent in litigation matters, no assurances can be given regarding the outcome of any litigation, if necessary, to enforce the Company's rights under its insurance policies.

Many uncertainties exist surrounding asbestos litigation, and 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 the number of claims and settlement and defense costs change significantly 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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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a) None

(b) None

(c) None

(d) Exhibits

99.1	Earnings Press Release dated October 27, 2008, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2008

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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: October 27, 2008	By:	/s/ Timothy J. MacCarrick
		Timothy J. MacCarrick
		Vice President, Finance and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release dated October 27, 2008, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2008.

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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 THIRD QUARTER EPS OF $0.60;

REDUCES ANNUAL EPS AND CASH FLOW GUIDANCE

STAMFORD, CONNECTICUT – October 27, 2008 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported third quarter 2008 net income was $36.1 million, or $0.60 per diluted share, compared with a third quarter 2007 net loss of $196.9 million, or $3.29 per share, which included a $250.0 million after-tax provision, or $4.18 per share, to extend the time horizon of the Company’s estimate of its asbestos liability from 2011 to 2017. Excluding the provision, third quarter 2007 earnings were $0.89 per basic share ($0.87 per diluted share) (Please see the attached Non-GAAP Financial Measures.)

Third quarter 2008 sales decreased $21.4 million, or 3%, including core business decline of $27.9 million (4%) partially offset by an increase of sales from acquired businesses of $3.8 million and favorable foreign currency translation of $2.7 million. Order backlog at September 30, 2008 was $779 million, which is 3% lower than the backlog of $805 million at June 30, 2008 and 8% higher than $720 million at December 31, 2007.

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Cash Flow and Financial Position

Cash provided by operating activities was $41.0 million in the third quarter of 2008, compared to $75.6 million in the third quarter of 2007. Year-to-date cash provided by operating activities was $130.5 million through September 30, 2008, compared to $146.3 million in the comparable 2007 period which was favorably impacted by a $31.5 million insurance recovery. The Company’s cash position was $278 million at the end of the third quarter, up from $162 million at September 30, 2007. Because the Company has substantial cash balances in Euros, the strengthening of the U.S. dollar during the third quarter of 2008 reduced the Company’s reported cash position by $29 million. The Company did not repurchase any shares of its common stock during the quarter but may do so in future quarters. (Please also see the attached Condensed Statement of Cash Flows and Non-GAAP Financial Measures.)

“I am disappointed in our third quarter results, which reflected an unexpected sharp slowdown in orders beginning in August in several of our short-cycle businesses, further weakening in Engineered Materials end markets, and the continued high level of engineering spending in Aerospace,” said Crane Co. president and chief executive officer Eric C. Fast.

“Reflecting the shortfall in our third quarter results and uncertainty across our end markets, we are reducing our EPS guidance for the year from $3.45-$3.60 to $2.75-$2.90 and our free cash flow guidance from $170 million to $130 million. We have taken and will continue to take important steps to reduce costs, and these actions could result in a fourth quarter pretax charge of up to $25 million, primarily non-cash, or $0.27 per share, which is not included in our new guidance. With $278 million in cash and $300 million available under a bank revolving credit, we have a strong liquidity position which will allow us to continue to fund targeted growth opportunities and selectively make acquisitions. We expect to emerge from this difficult economic period as an even stronger company.”

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Segment Results

All comparisons below refer to the third quarter 2008 versus the third quarter 2007, unless otherwise specified.

Aerospace & Electronics

	Third Quarter						Change
(dollars in millions)	2008			2007
Sales	$	159.7		$	159.0		$	0.7		1	%
Operating Profit	$	10.9		$	23.1		$	(12.2	)	(53	)%
Profit Margin		6.8	%		14.5	%

The third quarter 2008 sales increase of $0.7 million reflected a sales increase of $3.8 million in the Aerospace Group and a decrease of $3.1 million in the Electronics Group. Segment operating profit declined by $12.2 million as a result of a $15 million increase in engineering expenses related to products for the Boeing 787 and Airbus A400M programs. Excluding the investment in these two new programs, the segment continued to experience solid operating results.

The Aerospace & Electronics segment backlog was $418 million at September 30, 2008, equal to June 30, 2008 and an increase of 6% over $393 million at December 31, 2007.

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Engineered Materials

	Third Quarter						Change
(dollars in millions)	2008			2007
Sales	$	58.2		$	80.7		$	(22.5	)	(28	)%
Operating Profit	$	4.4		$	15.7		$	(11.3	)	(72	)%
Profit Margin		7.6	%		19.5	%

Reflecting further weakening demand from recreational vehicle, transportation and, to a lesser extent, building products end markets, segment sales were down $22.5 million, or 28%, following a decline of $14.8 million, or 17%, in the second quarter of 2008. Operating profit in 2008 decreased 72% reflecting lower sales. This segment continues to reduce headcount consistent with sales levels and to take other actions to reduce costs.

Merchandising Systems

	Third Quarter						Change
(dollars in millions)	2008			2007
Sales	$	93.6		$	98.5		$	(4.9	)	(5	)%
Operating Profit	$	10.9		$	9.8		$	1.1		12	%
Profit Margin		11.6	%		9.9	%

Total Merchandising Systems sales declined 5% as a sharp decline in Vending sales during the quarter more than offset higher sales in the Payment Solutions businesses. Operating profit increased $1.1 million, or 12%, reflecting the improved mix of higher margin Payment Solutions sales, and significant cost reduction initiatives in Vending.

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Fluid Handling

	Third Quarter						Change
(dollars in millions)	2008			2007
Sales	$	293.6		$	290.8		$	2.8		1	%
Operating Profit	$	34.9		$	37.5		$	(2.6	)	(7	)%
Profit Margin		11.9	%		12.9	%

Third quarter 2008 sales increased $2.8 million, or 1%, including $3.3 million (1%) of core sales growth and favorable foreign currency translation of $1.3 million, less sales of divested businesses of $1.8 million. While demand from the global chemical, pharmaceutical and energy industries, remained firm, sales were impacted during the third quarter by certain short-cycle North American businesses and delays of several large valve projects into the fourth quarter. Operating profit decreased $2.6 million, or 7%, and profit margin decreased to 11.9%, as a result of shipment delays, higher SG&A costs, and disruptions associated with Hurricane Ike.

On September 15, the Company’s UK subsidiary Crane Limited purchased all of the capital stock of Delta Fluid Products Limited, a leading designer and manufacturer of regulators and fire safe valves for the gas industry, and safety valves and air vent valves for the building services market, for a purchase price of approximately $28 million in cash on a debt free basis. Delta’s 2008 annual sales are estimated to be $37 million.

The Fluid Handling segment backlog was $286 million at September 30, 2008, a decrease of 4% from $298 million at June 30, 2008, and an increase of 18% over $243 million at December 31, 2007.

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Controls

	Third Quarter						Change
(dollars in millions)	2008			2007
Sales	$	37.6		$	35.1		$	2.5	7	%
Operating Profit	$	3.3		$	3.1		$	0.2	5	%
Profit Margin		8.7	%		8.9	%

The third quarter 2008 sales increase of $2.5 million reflects $2.1 million of incremental sales related to the August 2007 acquisition of the Mobile Rugged Business division of Kontron America. Operating profit increased 5% to $3.3 million.

Full Year 2008 Guidance

The Company is reducing its 2008 EPS guidance for the year from $3.45-$3.60 to $2.75-$2.90 and free cash flow guidance from $170 million to $130 million. The Company has taken and will continue to take important steps to reduce costs, and these actions could result in a fourth quarter pretax charge of up to $25 million, primarily non-cash, or $0.27 per share, which is not included in our new guidance. The Company’s guidance includes an estimated annual tax rate of approximately 29%, which includes the retroactive renewal of the Federal R&D tax credit.

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.

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Conference Call

Crane Co. has scheduled a conference call to discuss the third quarter’s financial results on Tuesday, October 28, 2008 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 highly 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 12,000 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.

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, 2007 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2008 - 21

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EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Net Sales:
Aerospace & Electronics	$	159,716		$	158,999		$	484,095		$	467,563
Engineered Materials		58,174			80,719			213,884			256,180
Merchandising Systems		93,611			98,462			323,348			296,389
Fluid Handling		293,621			290,826			883,221			834,983
Controls		37,556			35,087			110,480			98,093
Total Net Sales	$	642,678		$	664,093		$	2,015,028		$	1,953,208
Operating Profit (Loss):
Aerospace & Electronics	$	10,896		$	23,090		$	45,378		$	68,481
Engineered Materials		4,410			15,742			24,164			49,713
Merchandising Systems		10,884			9,755			42,361			31,298
Fluid Handling		34,915			37,477			126,233			102,014
Controls		3,277			3,129			8,124			8,331
Corporate*		(9,764	)		(11,660	)		(30,022	)		(42,108	)
Asbestos Provision		—			(390,150	)		—			(390,150	)
Total Operating Profit (Loss)		54,618			(312,617	)		216,238			(172,421	)
Interest Income		3,212			1,535			8,379			3,837
Interest Expense		(6,053	)		(6,845	)		(19,236	)		(20,614	)
Miscellaneous- Net		(83	)		849			1,878			3,593
Income (Loss) Before Income Taxes		51,694			(317,078	)		207,259			(185,605	)
Provision for Income Taxes		15,612			(120,128	)		63,790			(78,036	)
Net Income (Loss)	$	36,082		$	(196,950	)	$	143,469		$	(107,569	)
Share Data:
Net Income (Loss) per Diluted Share	$	0.60		$	(3.29	)	$	2.36		$	(1.79	)
Average Diluted Shares Outstanding		60,485			59,884			60,694			60,008
Average Basic Shares Outstanding		59,811			59,884			59,884			60,008
Supplemental Data:
Cost of Sales - Operations	$	434,382		$	445,603		$	1,342,560		$	1,321,560
Asbestos Provision		—			390,150			—			390,150
Selling, General & Administrative		153,678			140,957			456,230			413,919
Depreciation and Amortization**		14,270			13,672			43,965			44,740
Stock Compensation Expense		3,462			3,797			10,447			11,173

* Operating profit for the first nine months of 2008 includes $4.4 million of recoveries related to environmental activities, and operating profit for the first nine months of 2007 includes a $7.6 million provision for a legal settlement.

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

CRANE CO.

Condensed Balance Sheets

(in thousands)

	September 30, 2008		December 31, 2007
ASSETS
Current Assets
Cash and Cash Equivalents	$	278,431	$	283,370
Accounts Receivable		359,418		345,176
Current Insurance Receivable - Asbestos		33,600		33,600
Inventories		368,530		327,719
Other Current Assets		64,289		47,757
Total Current Assets		1,104,268		1,037,622
Property, Plant and Equipment		293,606		289,683
Long-Term Insurance Receivable - Asbestos		276,449		306,557
Long-Term Deferred Tax Assets		187,189		220,370
Other Assets		233,557		256,510
Goodwill		770,052		766,550
Total Assets	$	2,865,121	$	2,877,292
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	1,022	$	548
Accounts Payable		195,787		177,978
Current Asbestos Liability		84,000		84,000
Accrued Liabilities		234,828		230,295
Income Taxes		2,073		731
Total Current Liabilities		517,710		493,552
Long-Term Debt		398,434		398,301
Deferred Tax Liability		32,014		31,880
Long-Term Asbestos Liability		877,754		942,776
Other Liabilities		103,550		117,586
Minority Interest		7,811		8,394
Shareholders’ Equity		927,848		884,803
Total Liabilities and Shareholders’ Equity	$	2,865,121	$	2,877,292

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007
Operating Activities:
Net income (loss)	$	36,082		$	(196,950	)	$	143,469		$	(107,569	)
Income from joint venture		—			(1,253	)		—			(3,798	)
Asbestos provision, net		—			390,150			—			390,150
(Gain) loss on divestitures		—			975			(932	)		975
Depreciation and amortization		14,270			13,672			43,965			44,740
Stock-based compensation expense		3,462			3,797			10,447			11,173
Deferred income taxes		10,774			(130,775	)		22,639			(140,243	)
Cash used for operating working capital		10,853			6,600			(35,435	)		(39,532	)
Other		(16,173	)		(2,758	)		(18,774	)		(16,889	)
Subtotal		59,268			83,458			165,379			139,007
Asbestos related payments, net of insurance recoveries		(18,301	)		(7,897	)		(34,915	)		7,311
Total provided by operating activities		40,967			75,561			130,464			146,318
Investing Activities:
Capital expenditures		(13,257	)		(11,581	)		(33,658	)		(33,412	)
Proceeds from disposition of capital assets		284			374			728			11,610
Proceeds from divestitures		—			2,005			2,106			2,005
Payment for acquisition, net of cash acquired		(27,877	)		(65,311	)		(28,009	)		(65,166	)
Total used for investing activities		(40,850	)		(74,513	)		(58,833	)		(84,963	)
Financing Activities:
Dividends paid		(11,965	)		(10,789	)		(33,521	)		(28,828	)
Reacquisition of shares on the open market		—			—			(40,000	)		(50,001	)
Stock options exercised - net of shares reacquired		(387	)		2,958			8,704			10,102
Excess tax benefit from stock-based compensation		488			1,954			1,388			4,081
Repayment of long-term debt		—			(211	)		—			(300	)
Net increase (decrease) in short-term debt		(2,631	)		24,100			411			15,492
Total used for financing activities		(14,495	)		18,012			(63,018	)		(49,454	)
Effect of exchange rate on cash and cash equivalents		(28,739	)		8,113			(13,552	)		11,740
(Decrease) increase in cash and cash equivalents		(43,117	)		27,173			(4,939	)		23,641
Cash and cash equivalents at beginning of period		321,548			135,075			283,370			138,607
Cash and cash equivalents at end of period	$	278,431		$	162,248		$	278,431		$	162,248

CRANE CO.

Order Backlog

(in thousands)

	September 30, 2008		June 30, 2008		December 31, 2007		September 30, 2007
Aerospace & Electronics	$	418,317	$	417,883	$	392,822	$	398,725
Engineered Materials		11,035		11,892		14,802		14,466
Merchandising Systems		25,676		35,708		34,093		30,825
Fluid Handling		285,988		297,937		242,591		266,920
Controls		37,816		41,633		35,273		42,217
Total Backlog	$	778,832	$	805,053	$	719,581	$	753,153

CRANE CO.

Non-GAAP Financial Measures

(in thousands, except for per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,						Percent Change Three and Nine Months Ended September 30,
	2008			2007			2008			2007			2008		2007
INCOME ITEMS:
Net Sales	$	642,678		$	664,093		$	2,015,028		$	1,953,208		-3.2	%	3.2	%
Operating Profit (Loss)	$	54,618		$	(312,617	)	$	216,238		$	(172,421	)
Asbestos Provision - Pre-Tax (a)					390,150						390,150
Government Settlement - Pre-Tax (b)											7,600
Environmental Reimbursement - Pre-Tax (c)								(4,444	)
Operating Profit before Asbestos Provision, Government Settlement and Environmental Reimbursement	$	54,618		$	77,533		$	211,794		$	225,329		-29.6	%	-6.0	%
Percentage of Sales		8.5	%		11.7	%		10.5	%		11.5	%
Net Income (Loss)	$	36,082		$	(196,950	)	$	143,469		$	(107,569	)
Per Share	$	0.60		$	(3.29	)	$	2.36		$	(1.79	)
Asbestos Provision - Net of Tax (a)					250,000						250,000
Per Share				$	4.18					$	4.16
Government Settlement - Net of Tax (b)											5,396
Per Share										$	0.09
Environmental Reimbursement - Net of Tax (c)								(2,889	)
Per Share							$	(0.05	)
Net Income before Asbestos Provision, Government Settlement and Environmental Reimbursement	$	36,082		$	53,050		$	140,580		$	147,827		-32.0	%	-4.9	%
Per Share				$	0.89					$	2.46
Per Diluted Share	$	0.60		$	0.87		$	2.32		$	2.42
Average Diluted Shares Outstanding		60,485						60,694
In the three months and nine months ended September 30, 2007, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since both periods were in a loss position. Had net income been reported for these periods, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).
Average Basic Shares Outstanding					59,884						60,008
Effect of Diluted Stock Options					1,164						1,087
Average Shares Outstanding including the effect of Stock Options					61,048						61,095

When considering the effect of dilutive stock options on shares outstanding, Net Income before Asbestos Provision and Government Settlement is $0.87 per share and $2.42 for the three and nine months ended September 30, 2007, respectively.

(a) During the three months ended September 30, 2007, the Company recorded an Asbestos Provision.

(b) During the three months ended June 30, 2007, the Company recorded a settlement with the US Government.

(c) During the three months ended June 30, 2008, the Company recorded a $2.1 million reimbursement from the US Government and a $2.4 million reimbursement from a service provider, both related to environmental clean-up activities.

CRANE CO.

Non-GAAP Financial Measures

(in thousands, except for per share amounts)

	September 30, 2008			December 31, 2007
BALANCE SHEET ITEMS
Notes Payable and Current Maturities of Long-Term Debt	$	1,022		$	548
Long-Term Debt		398,434			398,301
Total Debt		399,456			398,849
Less: Cash and Cash Equivalents		(278,431	)		(283,370	)
Net Debt		121,025			115,479
Shareholders’ Equity		927,848			884,803
Net Capitalization	$	1,048,873		$	1,000,282
Percentage of Net Debt to Net Capitalization		11.5	%		11.5	%

	Three Months Ended September 30,						Nine Months Ended September 30,						Year Ended December 31,
	2008			2007			2008			2007			2008		2007
													(Estimated)
CASH FLOW ITEMS
Cash Provided from Operating Activities before Asbestos - Related Payments	$	59,268		$	83,458		$	165,379		$	139,007		230,000		$	243,031
Asbestos Related Payments, Net of Insurance Recoveries		(18,301	)		(7,897	)		(34,915	)		(24,189	)	(55,000	)		(41,698	)
Equitas Receipts		—			—			—			31,500		—			31,500
Cash Provided from Operating Activities		40,967			75,561			130,464			146,318		175,000			232,833
Less: Capital Expenditures		(13,257	)		(11,581	)		(33,658	)		(33,412	)	(45,000	)		(47,169	)
Free Cash Flow	$	27,710		$	63,980		$	96,806		$	112,906		130,000		$	185,664

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

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance. In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate positive cash flow. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.