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 25, 2010

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 25, 2010, Crane Co. announced its results of operations for the quarter ended September 30, 2010. 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, 2010, 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,
	2010			2009			2010			2009			2009
Beginning claims		65,352			71,420			66,341			74,872			74,872
New claims		981			696			2,718			2,900			3,664
Settlements*		(337	)		(275	)		(869	)		(820	)		(1,024	)
Dismissals		(554	)		(1,559	)		(3,705	)		(6,670	)		(11,171	)
MARDOC claims**		(1	)		—			956			—			—
Ending claims		65,441			70,282			65,441			70,282			66,341

* Includes Joseph Norris and Earl Haupt judgments.

** As of January 1, 2010, the Company was named in 36,448 maritime actions (not included in “Beginning claims”) which had been administratively dismissed by the United States District Court for the Eastern District of Pennsylvania (“MARDOC claims”). In 2009, the Court initiated a process to review these claims. As of September 30, 2010, 956 claims were restored to active status (and have been added to “Ending claims”), and 10,673 were permanently dismissed. The Company expects that more of the remaining 24,819 maritime actions will be activated, or permanently dismissed, as the Court’s review process continues.

Of the 65,441 pending claims as of September 30, 2010, approximately 23,300 claims were pending in New York, approximately 14,200 claims were pending in Mississippi, approximately 10,000 claims were pending in Texas and approximately 3,000 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 asbestos matters. The first payment, in the amount

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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.

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, one of which, the Patrick O’Neil claim in Los Angeles, was reversed on appeal and is currently the subject of further appellate proceedings before the Supreme Court of California, which accepted review of the matter by order dated December 23, 2009.

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’s post-trial motions were denied by order dated January 5, 2009. The case was concluded by settlement in the fourth quarter of 2010 during the pendency of the Company’s appeal to the Superior Court of Pennsylvania.

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 $16.93 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 plaintiffs have appealed that ruling.

On March 23, 2010, a Philadelphia County, Pennsylvania, state court jury found the Company responsible for a 1/11th share of a $14.5 million verdict in the James Nelson claim, and for a 1/20th share of a $3.5 million verdict in the Larry Bell claim. Both the Company and the plaintiffs have filed post-trial motions, and judgment will be entered after those motions are resolved. If necessary, the Company intends to pursue all available rights to appeal the verdicts.

Such judgment amounts are not included in the Company’s incurred costs until all available appeals are exhausted and the final payment amount is determined.

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) for the Company for the nine-month periods ended September 30, 2010 and 2009 totaled $75.7 million and $86.1 million, respectively. In contrast to the recognition of settlement and defense costs, which 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, for the nine-month periods ended September 30, 2010 and 2009 totaled a $43.7 million net payment and a $34.8 million net payment, (reflecting the receipt of $14.5 million in 2009 for full policy buyout from Highlands Insurance Company (“Highlands”)), respectively. Detailed below are the comparable amounts for the periods indicated.

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	Three Months Ended September 30,						Nine Months Ended September 30,						Year Ended December 31,
(in millions)	2010			2009			2010			2009			2009
Settlement / indemnity costs incurred (1)	$	9.9		$	14.8		$	36.0		$	47.0		$	58.3
Defense costs incurred (1)		13.8			11.9			39.7			39.1			51.8
Total costs incurred	$	23.7		$	26.7		$	75.7		$	86.1		$	110.1
Settlement / indemnity payments	$	7.2		$	16.0		$	29.7		$	41.9		$	57.3
Defense payments		14.1			15.0			39.5			37.4			52.2
Insurance receipts (2)		(5.1	)		(8.7	)		(25.5	)		(44.5	)		(53.7	)
Pre-tax cash payments (2)	$	16.2		$	22.3		$	43.7		$	34.8		$	55.8

(1) Before insurance recoveries and tax effects.

(2) The nine-month period ended September 30, 2009 includes a $14.5 million payment from Highlands in January 2009.

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.

Cumulatively through September 30, 2010, the Company has resolved (by settlement or dismissal) approximately 67,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $264 million, for an average settlement cost per resolved claim of $3,942. The average settlement cost per claim resolved during the years ended December 31, 2009 and 2008 was $4,781 and $4,186 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.

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 of eleven quarterly periods (consisting of the two full preceding calendar years and three 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 during the reference period and covering claims expected to be filed through the indicated forecast 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

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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 approximately 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. Each quarter, HR&A compiles an update based upon the Company’s experience in claims filed, settled and dismissed during the updated reference period (consisting of the preceding eleven quarterly periods) 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 September 30, 2010, the Company’s actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in the Company’s liability estimate. In addition to this claims experience, the Company considered additional quantitative and 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 September 30,

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2010. 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 $752 million as of September 30, 2010, approximately two-thirds 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 September 30, 2010 was $100 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/or defense costs as incurred. To date, the Company has entered into agreements providing for such reimbursements, known as “coverage-in-place”, with eleven 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 July 7, 2010, between the Company and Travelers Casualty & Surety Company. 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 five of its excess insurer groups, the Company entered into policy buyout agreements, settling all asbestos and other coverage obligations for an agreed sum, totaling $63.2 million in aggregate. The most recent of these buyouts was reached with Harper Insurance Limited, formerly Turegum Insurance Company. Reimbursements from 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

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and the allocation of such costs between such insurers and the Company. Using the estimated liability as of September 30, 2007 (for claims filed through 2017), 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 $223 million as of September 30, 2010.

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, and will decline over time, 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 (for claims filed through 2017) 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.

The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance reimbursements, 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 October 25, 2010, issued by Crane Co.

99.2 Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2010

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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 25, 2010	By:	/S/    ANDREW L. KRAWITT
		Andrew L. Krawitt
		Principal Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release dated October 25, 2010, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2010.

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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 STRONG EARNINGS IN THIRD QUARTER;

RAISES FULL YEAR EPS GUIDANCE

STAMFORD, CONNECTICUT – October 25, 2010 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported that third quarter 2010 earnings per diluted share increased 17% to $0.70, compared to $0.60 in the third quarter of 2009.

Third quarter 2010 sales of $560.7 million increased $10.0 million, or 1.8%, compared to the third quarter of 2009, resulting from a core sales increase of $19.7 million (3.6%), offset by unfavorable foreign currency translation of $8.2 million (1.5%) and a decrease in sales from divestitures, net of acquisitions, of $1.5 million.

Third quarter 2010 operating profit increased 13% to $62.9 million, compared to $55.5 million in the third quarter of 2009, and operating profit margin increased to 11.2%, compared to 10.1% in the third quarter of 2009.

“I am pleased with our third quarter results as core revenues increased 3.6% and represented the second consecutive quarter of year-over-year revenue growth, an indication that our businesses are continuing to recover, albeit at a modest rate,” said Crane Co. president and chief executive officer

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Eric C. Fast. “Given our solid performance through the first nine months of the year and expectations for continued strength in the fourth quarter, we are raising our 2010 earnings per share guidance to a range of $2.50–$2.60 per diluted share, compared to our previous range of $2.35–$2.50. Consistent with our prior guidance, we are assuming a $0.05 per share benefit from the expected reinstatement of the U.S. R&D tax credit retroactive to January 1, 2010.”

Cash Flow and Financial Position

As anticipated, cash used for operating activities in the third quarter of 2010 was $4.6 million, which included the effect of a previously disclosed $25 million discretionary pension contribution and higher working capital needs to support improving sales trends, compared to cash provided by operating activities of $80.0 million in the third quarter of 2009. Management continues to expect 2010 free cash flow (cash provided by operating activities less capital spending) to be in the $100–$115 million range. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.) During the third quarter of 2010, the Company repurchased 567,758 shares of its common stock for approximately $20 million. The Company’s cash position at September 30, 2010 was $315.6 million, as compared to $335.5 million at June 30, 2010.

Segment Results

All comparisons detailed in this section refer to the third quarter 2010 versus the third quarter 2009.

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Aerospace & Electronics

	Third Quarter						Change
(dollars in millions)	2010			2009
Sales	$	143.2		$	136.9		$	6.3	5	%
Operating Profit	$	25.4		$	19.9		$	5.4	27	%
Profit Margin		17.7	%		14.6	%

Third quarter 2010 sales increased $6.3 million, or 5%, reflecting a $5.2 million (7%) improvement in Aerospace Group sales and an increase of $1.1 million (2%) in Electronics Group revenue. Segment operating profit of $25.4 million increased by $5.4 million, or 27%, reflecting strong sales growth and margin improvement in the Aerospace Group.

Aerospace & Electronics order backlog was $402 million at September 30, 2010, as compared to $395 million at June 30, 2010.

Engineered Materials

	Third Quarter						Change
(dollars in millions)	2010			2009
Sales	$	54.9		$	48.1		$	6.8	14	%
Operating Profit	$	8.0		$	7.5		$	0.4	6	%
Profit Margin		14.5	%		15.7	%

Segment sales of $54.9 million increased 14% compared to the third quarter of 2009, as a result of robust demand in the recreational vehicle and transportation markets, while building products

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related sales were flat. Operating profit grew 6%, and margins declined 120 basis points on the higher sales due to increased raw material costs.

Merchandising Systems

	Third Quarter						Change
(dollars in millions)	2010			2009
Sales	$	77.2		$	75.9		$	1.3		2	%
Operating Profit	$	6.3		$	6.9		($	0.7	)	(9	%)
Profit Margin		8.1	%		9.1	%

Merchandising Systems sales of $77.2 million increased $1.3 million, or 2%, primarily due to higher sales in Vending Solutions. Operating profit of $6.3 million was down $0.7 million, or 9%, as the prior year included one-time positive items of a legal settlement and the reduction of a liability estimate associated with the Company’s restructuring program.

Fluid Handling

	Third Quarter						Change
(dollars in millions)	2010			2009
Sales	$	255.8		$	266.8		($	11.0	)	(4	%)
Operating Profit	$	33.2		$	34.9		($	1.7	)	(5	%)
Profit Margin		13.0	%		13.1	%

Third quarter 2010 sales decreased $11.0 million, or 4.2%, which included unfavorable foreign currency translation of $6.2 million (2.4%) and a core sales decline of $4.8 million (1.8%). The third quarter 2010 core sales decline of 1.8% compared favorably to the 13% and 4% declines

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experienced in the first and second quarters of 2010, respectively. Sales stabilized at approximately $255 million in the second and third quarters of 2010, and backlog remained healthy at $267 million at September 30, 2010, compared to $258 million at June 30, 2010, and $250 million at December 31, 2009. Despite the third quarter sales decline, segment operating profit margins remained strong at 13.0%.

Controls

	Third Quarter						Change
(dollars in millions)	2010			2009
Sales	$	29.6		$	23.1		$	6.5	28	%
Operating Profit (Loss)	$	1.9		($	1.7	)	$	3.6	NM
Profit Margin		6.6	%		(7.2	%)

Third quarter 2010 sales of $29.6 million increased 28%, primarily reflecting improvement in industrial transportation and oil & gas related demand. Operating profit of $1.9 million showed meaningful improvement over 2009.

During the quarter, the Company divested two small parts of the Controls Group: the Wireless Monitoring Solutions business, and the diagnostics product line of Dynalco. The net gain associated with these divestitures is included in Miscellaneous – Net on the accompanying Income Statement.

Additional Information

Please see the condensed financial statements and the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the

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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.

Conference Call

Crane Co. has scheduled a conference call to discuss the third quarter financial results on Tuesday, October 26, 2010 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 10,000 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, 2009 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2010 – 23

6

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,
	2010			2009			2010			2009
Net Sales:
Aerospace & Electronics	$	143,161		$	136,896		$	416,105		$	435,838
Engineered Materials		54,904			48,065			167,305			127,990
Merchandising Systems		77,199			75,879			221,897			220,905
Fluid Handling		255,842			266,810			758,218			796,383
Controls		29,608			23,060			80,294			70,223
Total Net Sales	$	560,714		$	550,710		$	1,643,819		$	1,651,339
Operating Profit:
Aerospace & Electronics	$	25,368		$	19,928		$	76,072		$	56,259
Engineered Materials		7,965			7,530			26,677			13,597
Merchandising Systems		6,261			6,914			19,340			16,569
Fluid Handling		33,197			34,882			93,338			98,708
Controls		1,949			(1,667	)		2,900			(2,984	)
Corporate		(11,861	)		(12,134	)		(36,864	)		(43,320	) *
Total Operating Profit		62,879			55,453			181,463			138,829
Interest Income		299			270			760			1,578
Interest Expense		(6,738	)		(6,821	)		(20,121	)		(20,370	)
Miscellaneous-Net		1,522			83			897			2,323
Income Before Income Taxes		57,962			48,985			162,999			122,360
Provision for Income Taxes		16,359			13,832			48,049			35,973
Net income before allocations to noncontrolling interests		41,603			35,153			114,950			86,387
Less: Noncontrolling interest in subsidiaries’ earnings		96			45			168			202
Net income attributable to common shareholders		41,507			35,108			114,782			86,185
Share Data:
Earnings per Diluted Share	$	0.70		$	0.60		$	1.92		$	1.47
Average Diluted Shares Outstanding		59,525			58,842			59,645			58,703
Average Basic Shares Outstanding		58,608			58,472			58,710			58,462
Supplemental Data:
Cost of Sales	$	373,171		$	365,482		$	1,087,221		$	1,117,028
Selling, General & Administrative		124,664			129,775			375,135			395,482
Depreciation and Amortization **		14,751			14,025			44,596			43,857
Stock-Based Compensation Expense		3,306			2,266			9,650			6,702

* Includes a charge of $7.25 million related to the settlement of a lawsuit.

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

CRANE CO.

Condensed Balance Sheets

(in thousands)

	September 30, 2010		December 31, 2009
ASSETS
Current Assets
Cash and Cash Equivalents	$	315,564	$	372,714
Accounts Receivable, net		330,681		282,463
Current Insurance Receivable - Asbestos		35,300		35,300
Inventories, net		315,291		284,552
Other Current Assets		74,076		71,317
Total Current Assets		1,070,912		1,046,346
Property, Plant and Equipment, net		273,487		285,224
Long-Term Insurance Receivable - Asbestos		187,420		213,004
Other Assets		385,506		406,346
Goodwill		778,180		761,978
Total Assets	$	2,695,505	$	2,712,898
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	1,424	$	1,078
Accounts Payable		155,286		142,390
Current Asbestos Liability		100,300		100,300
Accrued Liabilities		224,066		218,864
Income Taxes		4,365		4,150
Total Current Liabilities		485,441		466,782
Long-Term Debt		398,691		398,557
Long-Term Deferred Tax Liability		38,521		29,578
Long-Term Asbestos Liability		651,476		720,713
Other Liabilities		162,240		203,566
Total Equity		959,136		893,702
Total Liabilities and Equity	$	2,695,505	$	2,712,898

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended September 30						Nine Months Ended September 30
	2010			2009			2010			2009
Operating Activities:
Net income attributable to common shareholders	$	41,507		$	35,108		$	114,782		$	86,185
Noncontrolling interest in subsidiaries’ earnings		96			45			168			202
Net income before allocations to noncontrolling interests		41,603			35,153			114,950			86,387
Gain on divestiture		(1,015	)		—			(1,015	)		—
Depreciation and amortization		14,751			14,025			44,596			43,857
Stock-based compensation expense		3,306			2,266			9,650			6,702
Deferred income taxes		17,693			12,107			30,913			14,891
Cash (used for) provided by operating working capital		(35,721	)		33,659			(56,367	)		13,037
Other		(29,051	)*		5,029			(39,772	)*		(4,361	)
Subtotal		11,566			102,239			102,955			160,513
Asbestos related payments, net of insurance recoveries		(16,167	)		(22,253	)		(43,652	)		(34,788	)**
Total (used for) provided by operating activities		(4,601	)		79,986			59,303			125,725
Investing Activities:
Capital expenditures		(5,199	)		(3,827	)		(13,589	)		(21,259	)
Proceeds from disposition of capital assets		143			1,001			185			3,326
Proceeds from divestitures		4,615			—			4,615			—
Payment for acquisition - net of cash acquired		—			—			(51,167	)		—
Total used for investing activities		(441	)		(2,826	)		(59,956	)		(17,933	)
Financing Activities:
Dividends paid		(13,453	)		(11,695	)		(37,011	)		(35,079	)
Reacquisition of shares on open market		(19,999	)		—			(29,989	)		—
Stock options exercised - net of shares reacquired		3,962			(546	)		16,351			(299	)
Excess tax benefit from stock-based compensation		851			131			1,820			131
Change in short-term debt		834			(960	)		(2,299	)		(16,365	)
Total used for financing activities		(27,805	)		(13,070	)		(51,128	)		(51,612	)
Effect of exchange rate on cash and cash equivalents		12,882			7,824			(5,369	)		16,868
Increase (decrease) in cash and cash equivalents		(19,965	)		71,914			(57,150	)		73,048
Cash and cash equivalents at beginning of period		335,529			232,974			372,714			231,840
Cash and cash equivalents at end of period	$	315,564		$	304,888		$	315,564		$	304,888

* Includes a $25 million discretionary pension contribution.

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

CRANE CO.

Order Backlog

(in thousands)

	September 30, 2010			June 30, 2010			March 31, 2010			December 31, 2009		September 30, 2009
Aerospace & Electronics	$	401,585	*	$	394,554	*	$	388,169	*	$	351,004	$	369,898	**
Engineered Materials		11,367			12,496			14,810			12,070		8,454
Merchandising Systems		18,044			20,346			21,947			23,522		23,574
Fluid Handling		266,578			257,840			253,946			249,901		252,333
Controls		27,575			28,711			26,910			27,958		27,292
Total Backlog	$	725,149		$	713,947		$	705,782		$	664,455	$	681,551

* Includes Order Backlog of $24.5 million in September 2010, $26.5 million in June 2010 and $22.4 million in March 2010 pertaining to the 2010 acquisition of Merrimac.

** Includes Order Backlog of $15.0 million in September 2009 pertaining to the General Technology Corporation which was divested in December 2009.

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,						Percent Change September 30, 2010			Percent Change September 30, 2010
	2010			2009			2010			2009			Three Months			Nine Months
INCOME ITEMS
Net Sales	$	560,714		$	550,710		$	1,643,819		$	1,651,339			1.8	%		-0.5	%
Operating Profit		62,879			55,453			181,463			138,829			13.4	%		30.7	%
Percentage of Sales		11.2	%		10.1	%		11.0	%		8.4	%
Special Items impacting Operating Profit:
Lawsuit Settlement—Pre-Tax (a)		—			—			—			7,250
Restructuring Charges (Gains)- Pre-Tax (b)		(415	)		513			(1,165	)		2,360
Operating Profit before Special Items	$	62,464		$	55,966		$	180,298		$	148,439			11.6	%		21.5	%
Percentage of Sales		11.1	%		10.2	%		11.0	%		9.0	%
Net Income Attributable to Common Shareholders	$	41,507		$	35,108		$	114,782		$	86,185
Per Share	$	0.70		$	0.60		$	1.92		$	1.47			16.9	%		31.1	%
Special Items impacting Net Income Attributable to Common Shareholders:
Lawsuit Settlement—Net of Tax (a)		—			—			—			4,713
Per Share										$	0.08
Restructuring Charges (Gains)—Net of Tax (b)		(348	)		345			(823	)		1,787
Per Share	$	(0.01	)	$	0.01		$	(0.01	)	$	0.03
Net Income Attributable To Common Shareholders Before Special Items	$	41,159		$	35,453		$	113,959		$	92,685			16.1	%		23.0	%
Per Share	$	0.69		$	0.60		$	1.91		$	1.58			14.8	%		21.0	%
(a)     During the nine months ended September 30, 2009, the Company recorded a charge for the settlement of a lawsuit brought against the Company by a customer alleging failure of our fiberglass-reinforced plastic material.
(b)     Amounts represent restructuring charges (gains) in connection with the Restructuring Program.
	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
CASH FLOW ITEMS
Cash Provided from Operating Activities before Asbestos—Related Payments	$	11,566		$	102,239		$	102,955		$	160,513
Asbestos Related Payments, Net of Insurance Recoveries		(16,167	)		(22,253	)		(43,652	)		(34,788	)*
Cash Provided from Operating Activities		(4,601	)		79,986			59,303			125,725
Less: Capital Expenditures		(5,199	)		(3,827	)		(13,589	)		(21,259	)
Free Cash Flow	$	(9,800	)	$	76,159		$	45,714		$	104,466

* 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.