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): July 27, 2009

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 July 27, 2009, Crane Co. announced its results of operations for the quarter ended June 30, 2009. 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 June 30, 2009, 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 June 30,				Six Months Ended June 30,				Year Ended December 31,
	2009		2008		2009		2008		2008
Beginning claims	75,266		81,103		74,872		80,999		80,999
New claims	1,356		1,608		2,203		2,649		4,671
Settlements*	(379	)	(303	)	(544	)	(640	)	(1,236	)
Dismissals	(4,823	)	(429	)	(5,111	)	(1,029	)	(9,562	)
Ending claims **	71,420		81,979		71,420		81,979		74,872

* Includes Joseph Norris judgment.

** Does not include 36,447 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 71,420 pending claims as of June 30, 2009, approximately 25,000 claims were pending in New York, approximately 15,300 claims were pending in Mississippi, approximately 9,800 claims were pending in Texas and approximately 2,000 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 either dismissed or concluded through settlements. To date, the Company has paid two judgments arising from adverse jury verdicts in an asbestos matter. The first payment, in the amount of $2.54 million, was made on July 14, 2008, approximately two years after the adverse verdict, in the Joseph Norris matter in California, after the Company had exhausted all post-trial and appellate remedies. The second payment in the amount of $0.02 million, was made in June 2009 after an adverse verdict in the Earl Haupt case in Los Angeles, California on April 21, 2009. Such judgment amounts are not included in the Company’s incurred costs until available appeals are exhausted and the final payment amount is determined.

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

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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’s post-trial motions were denied by order dated January 5, 2009. 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 $0.68 million plus interest and costs. The Company is pursuing an appeal in this matter.

On February 2, 2009, the Company received an adverse verdict in the Dennis Woodard claim in Los Angeles, California. The jury found that the Company was responsible for one-half of one percent (0.5%) of plaintiffs’ damages of $16.925 million; however, based on California court rules regarding allocation and damages, judgment was entered against the Company in the amount of $1.65 million, plus costs. Following entry of judgment, the Company filed a motion with the trial court requesting judgment in the Company’s favor notwithstanding the jury’s verdict, and on June 30, 2009 the court advised that the Company’s motion was granted and judgment was entered in favor of the Company. The court has not yet entered a written judgment on its decision.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) for the Company in the six-month periods ended June 30, 2009 and 2008 totaled $59.3 million and $43.4 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 payments for settlement and defense costs, net of funds received from insurers, in the six-month periods ended June 30, 2009 and 2008 totaled a $12.5 million net payment, (reflecting the receipt of $14.5 million for full policy buyout from Highlands Insurance Company (“Highlands”)) and a $16.6 million net payment, respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)	Three Months Ended June 30,				Six Months Ended June 30,				Year Ended December 31, 2008		Cumulative to Date Through March 31, 2009
	2009		2008		2009		2008
Settlement / indemnity costs incurred (1)	$	23.2	$	7.4	$	32.1	$	17.8	$	45.2	$	201.4
Defense costs incurred (1)		13.8		13.5		27.2		25.6		51.9		241.5
Total costs incurred	$	37.0	$	20.9	$	59.3	$	43.4	$	97.1	$	442.9
Pre-tax cash payments (2)	$	15.2	$	14.6	$	12.5	$	16.6	$	58.1	$	206.5

(1) Before insurance recoveries and tax effects.

(2) Net of payment received from insurers. The six months ended June 30, 2009 includes a $14.5 million payment from Highlands in January 2009. There were no comparable policy settlements in the 2008 period.

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.

Through June 30, 2009, the Company has resolved (by settlement or dismissal) approximately 56,000 claims. The related settlement cost incurred by the Company and its insurance carriers is approximately $201 million, for an average cost per resolved claim of $3,614. The average cost per claim resolved during the years ended December 31, 2008 and 2007 was $4,186 and $4,977, respectively. Because claims are sometimes dismissed in large groups, the average cost per resolved claim, as well as the number of open claims, can fluctuate significantly from period to period.

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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 a base reference period consisting of 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 that would be filed against the Company and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. 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. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against the Company, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against the Company and (4) the aggregate defense costs incurred by the Company. These factors are interdependent, and no one factor predominates in determining the liability estimate. Although the methodology used by HR&A will also show claims and costs for periods subsequent to the indicated period (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

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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. Each quarter, HR&A compiles an update based upon the Company’s experience in claims filed, settled and dismissed during the updated reference period as well as average settlement costs by disease category (mesothelioma, lung cancer, other cancer, asbestosis and other non-malignant conditions) during that period. Management discusses these trends and their effect on the liability estimate with HR&A and determines whether a change in the estimate is warranted. As part of this process the Company also takes into account trends in the tort system such as those enumerated above. As of June 30, 2009, the Company’s actual experience during the updated reference period for mesothelioma claims filed and dismissed approximated the assumptions in the Company’s liability estimate, while the average settlement costs for mesothelioma claims were somewhat higher, but generally consistent with the prior two quarters. In addition to this claims experience, the Company considered additional qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, the Company determined that no change in the estimate was warranted for the period ended June 30, 2009. 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. The liability is reduced when cash payments are made in respect of settled claims and defense costs. The liability was $882 million as of June 30, 2009, approximately 68% of which is attributable to settlement and defense costs for future claims projected to be filed through 2017. 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. None of these estimated costs have been discounted to present value due to the inability to reliably forecast the timing of payments. The current portion of the total estimated liability at June 30, 2009 was $91 million and represents the Company’s best estimate of total asbestos costs expected to be paid during the twelve-month period. Such amount is based upon the HR&A model together with the Company’s prior year payment experience for both settlement and defense costs.

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 ten 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. The most recent such agreement became effective April 21, 2009, between the Company and Employers Mutual Casualty Company, by and through its managing general agent and attorney-in-fact Mutual Marine Office, Inc. 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

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four of its excess insurer groups, the Company entered into policy buyout agreements, settling all asbestos and other coverage obligations for an agreed sum, totaling $61.3 million in aggregate. The most recent of these buyouts was reached in October 2008 with Highlands Insurance Company, which currently is in receivership in the State of Texas. The settlement agreement with Highlands was formally approved by the Texas receivership court on December 8, 2008, and Highlands paid the full settlement amount, $14.5 million, to the Company on January 12, 2009. 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. There are no pending legal proceedings between the Company and any insurer contesting the Company’s asbestos claims under its insurance 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. Based upon the analysis of policy terms and other factors noted above by the Company’s legal counsel, and incorporating risk mitigation judgments by the Company where policy terms or other factors were not certain, the Company’s insurance consultants compiled a model indicating how the Company’s historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and the Company. Using the estimated liability as of September 30, 2007, the insurance consultant’s model forecasted that approximately 33% of the liability would be reimbursed by the Company’s insurers. 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 $266 million as of June 30, 2009.

The Company reviews the aforementioned estimated reimbursement rate with its insurance consultants on a periodic basis in order to confirm its overall consistency with the Company’s established reserves. Since September 2007, there have been no developments that have caused the Company to change the estimated 33% rate, although actual insurance reimbursements vary from period to period for the reasons cited above. While there are overall limits on the aggregate amount of insurance available to the Company with respect to asbestos claims, those overall limits were not reached by the total estimated liability currently recorded by the Company, and such overall limits did not influence the Company in its determination of the asset amount to record. The proportion of the asbestos liability that is allocated to certain insurance coverage years, however, exceeds the limits of available insurance in those years. The Company allocates to itself the amount of the asbestos liability that is in excess of available insurance coverage allocated to such years.

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.

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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 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 and, accordingly, 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 determined. Although the resolution of these claims may take many years, the effect on the results of operations, financial position and cash flow 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 July 27, 2009, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2009

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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: July 27, 2009	By:	/s/ Timothy J. MacCarrick
		Timothy J. MacCarrick
		Vice President, Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release dated July 27, 2009, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2009.

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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 SECOND QUARTER ‘09 RESULTS

STAMFORD, CONNECTICUT – July 27, 2009 – Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported second quarter 2009 net income attributable to common shareholders of $27.8 million, or $0.47 per diluted share, compared with second quarter 2008 net income attributable to common shareholders of $59.0 million, or $0.97 per diluted share. Second quarter 2009 earnings were adversely impacted by net after-tax charges, of $1.4 million, or $0.02 per share, primarily related to a previously announced restructuring program. Second quarter 2008 earnings benefited from recoveries of $2.9 million after-tax, or $0.05 per share, in conjunction with environmental remediation activities. (Please see non-GAAP Financial Measures table for details.)

Second quarter 2009 sales decreased $148.0 million, or 21%, including a core sales decline of $146.1 million (21%) and unfavorable foreign currency translation of $37.3 million (5%), partially offset by an increase in sales from acquired businesses of $35.4 million (5%).

Order backlog was $782 million at December 31, 2008, $724 million at March 31, 2009, and $697 million at June 30, 2009, representing quarterly declines of 7% and 4%, respectively.

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Cash Flow and Financial Position

Cash provided by operating activities was $30.4 million in the second quarter of 2009, compared to $45.4 million in the second quarter of 2008, primarily reflecting lower earnings in 2009. Free cash flow (cash provided by operating activities less capital spending) for the second quarter of 2009 was $22.9 million, compared to $34.0 million in the prior year, reflecting lower cash provided from operations, partially offset by lower capital spending. The Company’s cash position was $233.0 million at June 30, 2009, up $22.7 million from March 31, 2009 and essentially flat to December 31, 2008. (Please see the Condensed Statement of Cash Flows and Non-GAAP table)

“Our sales and earnings declined from our record second quarter 2008 results and were lower than we expected just three months ago,” said Crane Co. president and chief executive officer, Eric C. Fast. “The second quarter core sales decline of 21% exceeded the 16% decline in the first quarter and our full-year guidance of a 7% reduction. Year-over-year sales were sharply lower in our short-cycle businesses, specifically at Engineered Materials, Merchandising Systems and Controls, which continue to be impacted by very difficult end market conditions. Sales declines in our longer-cycle Aerospace and Fluid Handling businesses were more pronounced than the first quarter and we expect demand to soften through the balance of the year. As a result, we now expect our 2009 sales will be $2.2 billion, 8% below our February guidance of $2.4 billion and 15% below $2.6 billion in 2008.

“Cost reduction activities are now expected to generate $125 million of cost savings in 2009, compared to our previous estimate of $75 million. Excluding the two acquisitions in 2008, headcount has been reduced by 1,900 people, or 16% since year end 2007, of which 270 occurred in the second quarter of this year and additional headcount reductions are expected in the second half.

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“Reflecting difficult market conditions, we are reducing our earnings per share and free cash flow guidance by 12% and 8%, respectively.

“We continue to maintain a strong capital structure and liquidity position with $233 million in cash, a $300 million revolving bank credit agreement, and no near-term debt maturities.

“Our strategy remains unchanged and our businesses are executing well in difficult markets. We are maintaining our customer-facing resources, taking market share and our disciplined cost controls are mitigating the effects of the downturn. We are positioned well to capitalize when markets recover.”

Segment Results

All comparisons detailed in this section refer to the second quarter 2009 versus the second quarter 2008.

Aerospace & Electronics

	Second Quarter						Change
(dollars in millions)	2009			2008
Sales	$	147.0		$	165.9		$	(18.9	)	(11	)%
Operating Profit	$	19.1	*	$	18.5
Profit Margin		13.0	%		11.1	%	$	0.6		3	%
*       Includes $0.6 million of restructuring charges.

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The second quarter 2009 sales decrease of $18.9 million reflected a $20.5 million decline in Aerospace Group demand, partially offset by an increase of $1.5 million of Electronics Group revenue. Segment operating profit increased by $0.6 million as sharply higher profits in the Electronics Group were offset by the impact of lower sales and profitability in the Aerospace Group. Second quarter 2008 operating profit benefited from a $5.6 million engineering claim recovery in the Aerospace Group.

Aerospace & Electronics order backlog was $418 million at December 31, 2008, $396 million at March 31, 2009, and $383 million at June 30, 2009, representing quarterly declines of 3% and 5%, respectively.

Engineered Materials

	Second Quarter						Change
(dollars in millions)	2009			2008
Sales	$	41.8		$	72.9		$	(31.2	)	(43	)%
Operating Profit	$	4.6		$	8.1		$	(3.5	)	(43	)%
Operating Margin		11.0	%		11.1	%

Segment sales declined 43%, reflecting significantly lower demand from recreational vehicle, transportation and, to a lesser extent, building products end markets. Operating profit declined due to significantly lower sales but was up sequentially from the first quarter. Operating margins at 11.0% reflected the favorable impact of plant closures and a 46% reduction in headcount compared to year end 2007 levels.

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Merchandising Systems

	Second Quarter						Change
(dollars in millions)	2009			2008
Sales	$	73.3		$	116.2		$	(42.9	)	(37	)%
Operating Profit	$	6.7	*	$	17.3		$	(10.7	)	(62	)%
Profit Margin		9.1	%		14.9	%
*       Includes $1.1 million of restructuring charges.

Total Merchandising Systems sales decreased $42.9 million, or 37%, reflecting a sharp decline in both Vending Solutions and Payment Solutions sales. Operating profit and margins declined significantly reflecting deleverage on the reduced sales. The Company has made good progress and remains on track to complete the previously announced consolidation of its vending machine production from St. Louis, Missouri into its Williston, South Carolina facility by year end. In response to lower demand, Merchandising Systems headcount has been reduced approximately 20% compared to year end 2007 levels.

Fluid Handling

	Second Quarter						Change
(dollars in millions)	2009			2008
Sales	$	263.1		$	301.1		$	(38.0	)	(13	)%
Operating Profit	$	27.1	*	$	46.6		$	(19.5	)	(42	)%
Profit Margin		10.3	%		15.5	%
*       Includes $0.4 million of restructuring charges.

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Second quarter 2009 sales decreased $38 million, or 13%, including a decline of $43.4 million (15%) of core sales and unfavorable foreign currency translation of $30.0 million (10%), partially offset by sales from acquired businesses (Delta and Krombach) of $35.4 million (12%). Sales continued to be weak in the short-cycle MRO businesses, as well as the longer-cycle energy, chemical and pharmaceutical businesses, which were impacted by continued project delays and cancellations as a result of poor market conditions. Profit margins decreased to 10.3% from last year’s record levels of 15.5%, primarily reflecting the impact of lower volumes and unfavorable foreign exchange. The second quarter core sales decline of 15% was substantially greater than the first quarter’s 5% decline and new orders were lower than sales in the second quarter, which is reflected in our lower backlog. As a result, additional cost reduction actions are being implemented to align the cost structure with demand.

Fluid Handling order backlog was $303 million at December 31, 2008, $276 million at March 31, 2009, and $256 million at June 30, 2009, representing quarterly declines of 9% and 7%, respectively.

Controls

	Second Quarter						Change
(dollars in millions)	2009			2008
Sales	$	20.3		$	37.3		$	(17.0	)	(46	)%
Operating Profit (Loss)	$	(1.7	)	$	3.5		$	(5.3	)	(na	)
Profit Margin		(8.5	)%		9.5	%

Second quarter 2009 sales declined 46% reflecting significant deterioration in the oil & gas and transportation end markets. Operating profit decreased $5.3 million primarily reflecting the impact of lower sales in all of the Controls businesses.

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Full Year 2009 Guidance

Based on lower than previously expected demand in the Merchandising Systems and Fluid Handling businesses, the Company lowered its 2009 sales estimate from $2.4 billion to $2.2 billion, and reduced its earnings per share guidance from $2.01 to $2.31 (which includes an $0.08 per share charge for a previously announced legal settlement) to $1.75 to $2.05. The new guidance estimate includes charges for potential restructuring and integration activities of $0.10 per share. In addition, free cash flow guidance was reduced to $135 million compared to the $146 million achieved in 2008, reflecting the lower earnings guidance. (Please see Non-GAAP table.)

Conference Call

Crane Co. has scheduled a conference call to discuss the second quarter’s financial results on Tuesday, July 28, 2009 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 11,000 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.

7

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, 2008 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2009 – 13

8

EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
Net Sales:
Aerospace & Electronics	$	146,995		$	165,928		$	298,942		$	324,379
Engineered Materials		41,772			72,937			79,925			155,710
Merchandising Systems		73,331			116,233			145,026			229,737
Fluid Handling		263,083			301,100			529,573			589,600
Controls		20,310			37,284			47,163			72,924
Total Net Sales	$	545,491		$	693,482		$	1,100,629		$	1,372,350
Operating Profit:
Aerospace & Electronics	$	19,099		$	18,487		$	36,331		$	34,482
Engineered Materials		4,580			8,100			6,067			19,754
Merchandising Systems		6,675			17,339			9,655			31,477
Fluid Handling		27,059			46,556			63,826			91,318
Controls		(1,731	)		3,547			(1,317	)		4,847
Corporate		(10,190	)		(7,758	)		(31,186	) *		(20,258	)
Total Operating Profit		45,492			86,271			83,376			161,620
Interest Income		465			2,883			1,308			5,167
Interest Expense		(6,780	)		(6,678	)		(13,549	)		(13,183	)
Miscellaneous- Net		529			1,342			2,240			1,761
Income Before Income Taxes		39,706			83,818			73,375			155,365
Provision for Income Taxes		11,901			25,098			22,141			48,178
Net income before allocation to noncontrolling interests		27,805			58,720			51,234			107,187
Less: Noncontrolling interest in subsidiaries’ earnings (losses)		38			(289	)		157			(200	)
Net income attributable to common shareholders		27,767			59,009			51,077			107,387
Share Data:
Earnings per Diluted Share	$	0.47		$	0.97		$	0.87		$	1.77
Average Diluted Shares Outstanding		58,728			60,581			58,643			60,812
Average Basic Shares Outstanding		58,459			59,707			58,458			59,911
Supplemental Data:
Cost of Sales	$	369,537		$	455,647		$	751,546		$	908,178
Selling, General & Administrative		130,462			151,564			265,707			302,552
Depreciation and Amortization **		14,779			14,712			29,832			29,695
Stock-Based Compensation Expense		2,374			3,370			4,436			6,985

* Includes a charge of $7.25 million related to the settlement of a lawsuit brought against the Company by a customer alleging failure of our fiberglass-reinforced plastic material.

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

CRANE CO.

Condensed Balance Sheets

(in thousands)

	June 30, 2009		December 31, 2008
ASSETS
Current Assets
Cash and Cash Equivalents	$	232,974	$	231,840
Accounts Receivable, net		319,812		334,263
Current Insurance Receivable - Asbestos		35,300		41,300
Inventories, net		333,660		349,926
Other Current Assets		66,785		63,911
Total Current Assets		988,531		1,021,240
Property, Plant and Equipment, net		289,807		290,814
Long-Term Insurance Receivable - Asbestos		230,886		260,660
Other Assets		441,217		420,542
Goodwill		763,026		781,232
Total Assets	$	2,713,467	$	2,774,488
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	805	$	16,622
Accounts Payable		143,278		182,147
Current Asbestos Liability		91,000		91,000
Accrued Liabilities		225,350		246,915
Income Taxes		5,411		1,980
Total Current Liabilities		465,844		538,664
Long-Term Debt		399,436		398,479
Long-Term Deferred Tax Liability		24,887		22,971
Long-Term Asbestos Liability		791,187		839,496
Other Liabilities		224,496		229,057
Total Equity		807,617		745,821
Total Liabilities and Equity	$	2,713,467	$	2,774,488

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended June 30						Six Months Ended June 30
	2009			2008			2009			2008
Operating Activities:
Net income attributable to common shareholders	$	27,767		$	59,009		$	51,077		$	107,387
Noncontrolling interest in subsidiaries’ earnings (losses)		38			(289	)		157			(200	)
Net income before allocations to noncontrolling interests		27,805			58,720			51,234			107,187
Gain on divestiture		—			(932	)		—			(932	)
Depreciation and amortization		14,779			14,712			29,832			29,695
Stock-based compensation expense		2,374			3,370			4,436			6,985
Deferred income taxes		(5,910	)		5,768			2,784			11,865
Cash provided by (used for) operating working capital		6,997			(16,454	)		(20,622	)		(46,288	)
Other		(499	)		(5,263	)		(9,390	)		(2,401	)
Subtotal		45,546			59,921			58,274			106,111
Asbestos related payments, net of insurance recoveries		(15,191	)		(14,553	)		(12,535	) *		(16,614	)
Total provided by operating activities		30,355			45,368			45,739			89,497
Investing Activities:
Capital expenditures		(7,458	)		(11,321	)		(17,432	)		(20,401	)
Proceeds from disposition of capital assets		622			48			2,325			444
Payment for acquisition, net of cash acquired		—			(47	)		—			(132	)
Proceeds from divestiture		—			1,320			—			2,106
Total used for investing activities		(6,836	)		(10,000	)		(15,107	)		(17,983	)
Financing Activities:
Dividends paid		(11,696	)		(10,761	)		(23,384	)		(21,556	)
Reacquisition of shares on open market		—			—			—			(40,000	)
Stock options exercised - net of shares reacquired		884			5,535			247			9,091
Excess tax benefit from stock-based compensation		—			793			—			900
Change in short-term debt		(6,089	)		(5,995	)		(15,405	)		3,042
Total used for financing activities		(16,901	)		(10,428	)		(38,542	)		(48,523	)
Effect of exchange rate on cash and cash equivalents		16,041			1,880			9,044			15,187
Increase in cash and cash equivalents		22,659			26,820			1,134			38,178
Cash and cash equivalents at beginning of period		210,315			294,728			231,840			283,370
Cash and cash equivalents at end of period	$	232,974		$	321,548		$	232,974		$	321,548

* Includes a $14.5 million insurance settlement receipt from the Highlands Insurance Company.

CRANE CO.

Order Backlog

(in thousands)

	June 30, 2009		March 31, 2009		December 31, 2008		June 30, 2008
Aerospace & Electronics	$	383,335	$	396,393	$	418,382	$	417,883
Engineered Materials		9,135		6,924		6,942		11,892
Merchandising Systems		19,955		18,822		23,407		35,708
Fluid Handling*		256,467		275,660		302,653		297,937
Controls		28,026		26,667		30,509		41,633
Total Backlog	$	696,918	$	724,466	$	781,893	$	805,053

* Includes Order Backlog of $41.8 million in June 2009, $46.5 million in March 2009 and $57.0 million in December 2008 pertaining to the 2008 acquisitions of Delta and Krombach.

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,						Percent Change June 30, 2009		Percent Change June 30, 2009
	2009			2008			2009			2008			Three Months		Six Months
INCOME ITEMS
Net Sales	$	545,491		$	693,482		$	1,100,629		$	1,372,350		-21.3	%	-19.8	%
Operating Profit		45,492			86,271			83,376			161,620
Special Items impacting Operating Profit:
Lawsuit Settlement - Pre-Tax (a)		(500	)		—			7,250			—
Restructuring Charges - Pre-Tax (b)		2,295			—			1,847			—
Environmental Reimbursement - Pre-Tax (d)		—			(4,444	)		—			(4,444	)
Operating Profit before Special Items	$	47,287		$	81,827		$	92,473		$	157,176		-42.2	%	-41.2	%
Percentage of Sales		8.7	%		11.8	%		8.4	%		11.5	%
																	2009 Full Year Guidance
																	Low			High
Net Income Attributable to Common Shareholders	$	27,767		$	59,009		$	51,077		$	107,387						$	103,250		$	121,000
Per Share	$	0.47		$	0.97		$	0.87		$	1.77						$	1.75		$	2.05
Special Items impacting Net Income Attributable to Common Shareholders:
Lawsuit Settlement - Net of Tax (a)		(325	)		—			4,713			—							4,713	(a)		4,713	(a)
Per Share	$	(0.01	)		—		$	0.08			—						$	0.08		$	0.08
Restructuring Charges (Gains) - Net of Tax		1,692	(b)		—			1,402	(b)		—							5,850	(c)		5,850	(c)
Per Share	$	0.03			—		$	0.02			—						$	0.10		$	0.10
Environmental Reimbursement - Net of Tax (d)		—			(2,889	)		—			(2,889	)						—			—
Per Share		—			(0.05	)		—			(0.05	)						—			—
Net Income Attributable To Common Shareholders Before Special Items	$	29,134		$	56,120		$	57,192		$	104,498		-48.1	%	-45.3	%	$	113,813		$	131,563
Per Share	$	0.50		$	0.93		$	0.98		$	1.72						$	1.93		$	2.23

(a) During the three months ended March 31, 2009, the Company recorded a charge for the settlement of a lawsuit brought against the Company by a customer alleging failure or our fiberglass-reinforced plastic material. During the three months ended June 30, 2009, the Company recorded additional insurance recoveries associated with the aforementioned settlement.

(b) Amounts represent restructuring charges in connection with the Restructuring Program.

(c) Amounts represent restructuring charges in connection with the Restructuring Program and integration costs associated with the Krombach acquisition.

(d) 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.

	June 30, 2009			December 31, 2008
BALANCE SHEET ITEMS
Notes Payable and Current Maturities of Long-Term Debt	$	805		$	16,622
Long-Term Debt		399,436			398,479
Total Debt		400,241			415,101
Less: Cash and Cash Equivalents		(232,974	)		(231,840	)
Net Debt		167,267			183,261
Equity		807,617			745,821
Net Capitalization	$	974,884		$	929,082
Percentage of Net Debt to Net Capitalization		17.2	%		19.7	%
	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
CASH FLOW ITEMS
Cash Provided from Operating Activities before Asbestos - Related Payments	$	45,546		$	59,921		$	58,274		$	106,111
Asbestos Related Payments, Net of Insurance Recoveries		(15,191	)		(14,553	)		(12,535	) *		(16,614	)
Cash Provided from Operating Activities		30,355			45,368			45,739			89,497
Less: Capital Expenditures		(7,458	)		(11,321	)		(17,432	)		(20,401	)
Free Cash Flow	$	22,897		$	34,047		$	28,307		$	69,096

* Includes a $14.5 million insurance settlement receipt from the Highlands Insurance Company.

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.