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): January 24, 2011

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 January 24, 2011, Crane Co. announced its results of operations for the quarter ended December 31, 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 December 31, 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:

	Year Ended December 31,
	2010			2009			2008
Beginning claims		66,341			74,872			80,999
New claims		5,032			3,664			4,671
Settlements*		(1,127	)		(1,024	)		(1,236	)
Dismissals		(6,363	)		(11,171	)		(9,562	)
MARDOC claims**		956			—			—
Ending claims		64,839			66,341			74,872

* 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 District Court for the Eastern District of Pennsylvania (“MARDOC claims”). In 2009, the Court initiated a process to review these claims. As of December 31, 2010, 956 claims were restored to active status (and have been added to “Ending claims”), and 11,219 were permanently dismissed. In addition, the Company was named in 8 new maritime actions in 2010 (not included in “Beginning claims”) which had been administratively dismissed upon filing in 2010. The Company expects that more of the remaining 24,281 maritime actions will be activated, or permanently dismissed, as the Court’s review process continues.

Of the 64,839 pending claims as of December 31, 2010, approximately 21,300 claims were pending in New York, approximately 13,800 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.

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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 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. The settlement is reflected in the settled claims for 2010.

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 years ended December 31, 2010, 2009 and 2008 totaled $106.6 million, $110.1 million and $97.1 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 years ended December 31, 2010, 2009 and 2008 totaled a $66.7 million net payment, a $55.8 million net payment, (reflecting the receipt of $14.5 million in 2009 for full policy buyout from Highlands Insurance Company (“Highlands”)), and a $58.1 million net payment, respectively. Detailed below are the comparable amounts for the periods indicated.

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(in millions)	For the Year Ended December 31,
	2010			2009			2008
Settlement / indemnity costs incurred (1)	$	52.7		$	58.3		$	45.2
Defense costs incurred (1)		53.9			51.8			51.9
Total costs incurred	$	106.6		$	110.1		$	97.1
Settlement / indemnity payments	$	46.9		$	57.3		$	40.8
Defense payments		54.4			52.2			55.5
Insurance receipts (2)		(34.6	)		(53.7	)		(38.2	)
Pre-tax cash payments (2)	$	66.7		$	55.8		$	58.1

(1) Before insurance recoveries and tax effects.

(2) The year ended December 31, 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 December 31, 2010, the Company has resolved (by settlement or dismissal) approximately 70,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $280 million, for an average settlement cost per resolved claim of $4,000. The average settlement cost per claim resolved during the years ended December 31, 2010, 2009 and 2008 was $7,036, $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. In addition to large group dismissals, the nature of the disease and corresponding settlement amounts for each claim resolved will also drive changes from period to period in the average settlement cost per claim. Accordingly, the average cost per resolved claim is not considered in the Company’s periodic review of its estimated asbestos liability. For a discussion regarding the four most significant factors affecting the liability estimate, see “Effects on the Condensed Consolidated Financial Statements”.

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.

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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 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 December 31, 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

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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 December 31, 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 $720 million as of December 31, 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 December 31, 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 six of its excess insurer groups, the Company entered into policy buyout agreements, settling all asbestos and other coverage obligations for an agreed sum, totaling $79.5 million in aggregate. The most recent of these buyouts was reached with Munich Reinsurance America, Inc. and involved certain historical policies issued by American Re-Insurance Company and American Excess 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. With the agreements referenced above, the Company has concluded settlements with all but one of its solvent excess insurers whose policies are expected to respond to the aggregate costs included in the updated liability estimate. That insurer, which issued a single applicable policy, has agreed to pay the shares of defense and indemnity costs the Company has allocated to it, subject to a reservation of rights, pending negotiation of a formal settlement agreement with the Company. If the Company is not successful in concluding an agreement with that insurer, then the Company anticipates that it would pursue litigation to enforce its rights under such insurer’s policy. 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

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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 (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 $214 million as of December 31, 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. The reviews encompass consideration of the performance of the insurers under coverage-in-place agreements, the effect of any additional lump-sum payments under policy buyout agreements, and, following consultation with legal counsel, the consistency of any new coverage-in-place agreements with the assumptions in the model. 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

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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 January 24, 2011, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 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: January 24, 2011	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 January 24, 2011, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 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 FOURTH QUARTER AND FULL YEAR 2010

RESULTS AT UPPER END OF GUIDANCE RANGE;

SETS 2011 EPS GUIDANCE OF $2.80 - $3.00

STAMFORD, CONNECTICUT – January 24, 2011 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported that fourth quarter 2010 earnings per diluted share decreased 18% to $0.66, compared to $0.81 in the fourth quarter of 2009. Excluding Special Items, fourth quarter 2010 earnings per diluted share increased 19% to $0.68 compared to $0.57 in the fourth quarter of 2009. (Please see the attached Non-GAAP Financial Measures table for pretax, after-tax and earnings per share amounts of Special Items.)

Fourth Quarter 2010 Special Items:

• A tax benefit of $0.09 per share caused by the reinvestment of non-U.S. earnings associated with the acquisition of Money Controls.

• Transaction costs of $0.02 per share associated with the acquisition of Money Controls.

• Restructuring charges of $0.09 per share, of which $0.05 per share is associated with the acquisition of Money Controls.

Fourth Quarter 2009 Special Items:

• Sales of $18.9 million and a benefit of $0.18 per share associated with an agreement with the Boeing Company and GE Aviation Systems LLC to resolve claims relating to the brake control monitoring system for the Boeing 787.

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• A tax benefit of $0.09 per share associated with the divestiture of Crane’s General Technology Corporation subsidiary.

• Restructuring charges of $0.03 per share.

Fourth quarter 2010 sales of $574 million increased $29.0 million, or 5%, compared to the fourth quarter of 2009. Excluding the Boeing agreement referenced above, fourth quarter 2010 sales increased $47.9 million, or 9%, compared to the fourth quarter of 2009, resulting from a core sales increase of $49.7 million (9%) and an increase in sales from acquired businesses (net of divestitures) of $3.7 million (1%), partially offset by unfavorable foreign currency translation of $5.5 million (1%).

Fourth quarter 2010 operating profit declined 23% to $53.7 million compared to $69.4 million in the fourth quarter of 2009. Excluding Special Items, fourth quarter 2010 operating profit increased 12% to $62.8 million compared to $56.0 million in the fourth quarter 2009, and operating profit margin increased to 10.9%, compared to 10.6% in the fourth quarter of 2009. (Please see the attached Non-GAAP Financial Measures table.)

“We are pleased to report full year EPS of $2.59, which was at the high end of our October guidance of $2.50 - $2.60 and reflected substantial improvement in our business over the course of the year,” said Crane Co. president and chief executive officer, Eric C. Fast. “Excluding Special Items, our full year operating margin of 11.0% approached the 11.1% margin we achieved in 2007, and we remain confident that we will reach our 13% margin target when our sales return to $2.6 billion. With sales increasing for three consecutive quarters and continued strengthening in our late cycle Aerospace business, we have good momentum as we begin 2011.”

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Full Year 2010 Results

Total sales in 2010 were $2.218 billion, an increase of 1% from $2.196 billion in 2009. Excluding the Boeing agreement, 2010 sales increased $40.4 million, or 2%, resulting from a core sales increase of $31.4 million (2%), favorable foreign currency translation of $7.1 million and an increase in sales from acquired businesses (net of divestitures) of $1.9 million .

Operating profit for the full year 2010 increased 13% to $235.2 million compared to $208.3 million in 2009. Excluding Special Items, 2010 operating profit increased 19% to $243.1 million compared to $204.4 million in 2009, and operating profit margin increased to 11.0%, compared to 9.4% in 2009.

Full year 2010 earnings per diluted share increased 14% to $2.59, compared to $2.28 in 2009. Excluding Special Items, 2010 earnings per diluted share increased 21% to $2.59 compared to $2.15 in 2009. (Please see the attached Non-GAAP Financial Measures table.)

Order backlog was $768 million at December 31, 2010 compared to $664 million at December 31, 2009. The backlog at December 31, 2010 was favorably impacted by the 2010 acquisitions of Merrimac Industries and Money Controls, which had backlogs of $23 million and $8 million, respectively.

Cash Flow and Financial Position

Cash provided by operating activities in the fourth quarter of 2010 was $74.2 million, compared to $63.3 million in the fourth quarter of 2009. Free cash flow (cash provided by operating activities less capital spending) for the fourth quarter of 2010 was $66.8 million, compared to $56.2 million

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in the fourth quarter of 2009. For the full year 2010, cash provided by operating activities was $133.5 million compared to $189.0 million in 2009. Free cash flow for the full year 2010 was $112.5 million, compared to $160.7 million in the prior year, primarily reflecting higher working capital needs to support improving sales trends. The Company repurchased 1,396,608 shares of its common stock during 2010 at a cost of approximately $50 million, including 515,350 shares in the fourth quarter for $20 million. The Company’s cash position was $273 million at December 31, 2010, down from $316 million at September 30, 2010 reflecting the Money Controls acquisition for $92.5 million in December partially offset by strong cash flow. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

Segment Results

All comparisons detailed in this section refer to the fourth quarter 2010 versus the fourth quarter 2009. The commentary refers to the results before Special Items.

Aerospace & Electronics

	Fourth Quarter						Change
(dollars in millions)	2010			2009
Sales	$	161.1		$	154.3		$	6.8		4	%
Sales, before Special Items*	$	161.1		$	135.4		$	25.7		19	%
Operating Profit	$	33.2		$	39.7		($	6.5	)	-16	%
Operating Profit, before Special Items **	$	33.3		$	24.9		$	8.4		34	%
Profit Margin		20.6	%		25.7	%
Profit Margin, before Special Items		20.7	%		18.4	%

* 4Q’09 Excludes $18.9 million of sales related to the Boeing agreement

** 4Q’09 Excludes $16.4 million of operating profit related to the Boeing agreement and 4Q’10 and 4Q’09 excludes restructuring charges of $0.2 million and $1.6 million, respectively

Fourth quarter 2010 sales increased $25.7 million, or 19%, reflecting a $16.1 million increase in Aerospace Group sales and an increase of $9.6 million of Electronics Group revenue, in part due

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the acquisition of Merrimac. Aerospace sales increased primarily reflecting higher commercial OEM activity. Segment operating profit increased by $8.4 million driven by the higher volumes. Operating profit margin was 20.7%, reflecting improvement in both the Aerospace and Electronics Groups.

Aerospace & Electronics order backlog was $431 million at December 31, 2010 compared to $402 million at September 30, 2010.

Engineered Materials

	Fourth Quarter						Change
(dollars in millions)	2010			2009
Sales	$	45.0		$	44.1		$	0.9		2	%
Operating Profit	$	3.5		$	6.1		($	2.6	)	-43	%
Operating Profit, before Special Items*	$	3.5		$	5.8		($	2.3	)	-40	%
Profit Margin		7.7	%		13.8	%
Profit Margin, before Special Items		7.7	%		13.2	%

* Excludes $0.3 million of restructuring credits in 4Q’09.

Segment sales of $45.0 million increased 2% compared the fourth quarter of 2009, reflecting higher sales to transportation and building products end markets, partially offset by lower sales to recreational vehicle customers. Operating profit and margins declined to $3.5 million and 7.7%, respectively, primarily reflecting the impact of higher materials costs. In response to higher materials costs, the Company has been implementing price increases, which will take effect during the first quarter.

5

Merchandising Systems

	Fourth Quarter						Change
(dollars in millions)	2010			2009
Sales	$	76.1		$	71.7		$	4.4		6	%
Operating Profit	($	2.6	)	$	4.6		($	7.2	)	NM
Operating Profit, before Special Items*	$	2.9		$	3.5		($	0.6	)	-17	%
Profit Margin		-3.4	%		6.4	%
Profit Margin, before Special Items		3.8	%		4.8	%

* Excludes $4.2 million of restructuring charges and $1.3 million of transaction costs associated with the Money Controls acquisition in 4Q’10; and $1.1 million of restructuring credits in 4Q’09

Merchandising Systems sales of $76.1 million increased $4.4 million, or 6%, reflecting higher sales in both Vending and Payment Solutions. Operating profit and profit margin declined primarily reflecting the absence of a favorable legal settlement which occurred in the fourth quarter of 2009. The restructuring charge recorded in the fourth quarter of 2010 relates to initiatives associated with the Money Controls acquisition.

Fluid Handling

	Fourth Quarter						Change
(dollars in millions)	2010			2009
Sales	$	261.7		$	253.6		$	8.1		3	%
Operating Profit	$	29.3		$	33.5		($	4.3	)	-13	%
Operating Profit, before Special Items*	$	32.7		$	36.1		($	3.4	)	-9	%
Profit Margin		11.2	%		13.2	%
Profit Margin, before Special Items		12.5	%		14.2	%

* Excludes $3.5 million of restructuring charges in 4Q’10 and $2.6 million of restructuring charges in 4Q’09

Fourth quarter 2010 sales increased $8.1 million, or 3%, which included a core sales increase of $12.0 million (5%), partially offset by unfavorable foreign currency translation of $3.9 million

6

(2%). Sales, operating profits and profit margins increased across most of Fluid Handling with the exception of the Energy business, which is heavily oriented to later-cycle, project-based valve applications in the power and refining industries. The restructuring charge recorded in the fourth quarter of 2010 relates to a plant consolidation associated with the Energy business. Fluid Handling margins remained in the Company’s 2010 guidance range of 12% - 13%.

Fluid Handling order backlog was $272 million at December 31, 2010, compared to $267 million at September 30, 2010.

Controls

	Fourth Quarter						Change
(dollars in millions)	2010			2009
Sales	$	30.1		$	21.3		$	8.8	41	%
Operating Profit	$	2.9		($	1.4	)	$	4.3	NM
Operating Profit, before Special Items*	$	2.9		($	1.3	)	$	4.3	NM
Profit Margin		9.8	%		-6.6	%
Profit Margin, before Special Items		9.8	%		-6.2	%

* Excludes $0.1 million of restructuring charges in 4Q’09

Fourth quarter 2010 sales of $30.1 million increased 41%, driven by continued improvement in industrial transportation and upstream oil and gas related end markets. The operating profit improvement primarily reflected leverage of the higher sales volume.

Full Year 2011 Guidance

Sales for 2011 are expected to increase approximately 7-9% driven by a core sales increase of 4-5%, sales from businesses acquired in 2010 (net of divestitures) of 2-3% and favorable foreign

7

exchange of approximately 1%. Our 2011 earnings guidance is a range of $2.80—$3.00 per diluted share, reflecting revenue and profit growth across all of our segments. On a comparable basis and before Special Items, 2010 earnings per diluted share were $2.59. We will provide segment-specific sales and operating profit guidance at our Investor Day conference on February 17, 2011.

Please see the Non-GAAP Financial Measures table attached to this press release for supporting details. Additional information with respect to the Company’s asbestos liability and related accounting provisions and cash requirements is set forth in the Current Report on Form 8-K filed with a copy of this press release.

Conference Call

Crane Co. has scheduled a conference call to discuss the fourth quarter financial results on Tuesday, January 25, 2011 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. Investor Day

The Company will hold its annual Investor Day conference on Thursday, February 17 in New York City from 8:30 am to noon. It will be available on the web at www.craneco.com.

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,

8

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)

2011 – 1

9

EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
Net Sales:
Aerospace & Electronics	$	161,059		$	154,280	*	$	577,164		$	590,118	*
Engineered Materials		44,975			44,090			212,280			172,080
Merchandising Systems		76,143			71,731			298,040			292,636
Fluid Handling		261,719			253,577			1,019,937			1,049,960
Controls		30,110			21,326			110,404			91,549
Total Net Sales	$	574,006		$	545,004		$	2,217,825		$	2,196,343
Operating Profit (Loss):
Aerospace & Electronics	$	33,156		$	39,657	*	$	109,228		$	95,916	*
Engineered Materials		3,466			6,060			30,143			19,657
Merchandising Systems		(2,611	)		4,553			16,729			21,122
Fluid Handling		29,252			33,503			122,590			132,211
Controls		2,943			(1,407	)		5,843			(4,391	)
Corporate		(12,507	)		(12,926	)		(49,371	)		(56,246	)**
Total Operating Profit (Loss)		53,699			69,440			235,162			208,269
Interest Income		424			1,242			1,184			2,820
Interest Expense		(6,720	)		(6,769	)		(26,841	)		(27,139	)
Miscellaneous- Net		527			(1,347	)		1,424			976
Income (loss) Before Income Taxes		47,930			62,566			210,929			184,926
Provision for Income Taxes		8,690			14,873			56,739			50,846
Net income (loss) before allocations to noncontrolling interests		39,240			47,693			154,190			134,080
Less: Noncontrolling interest in subsidiaries’ earnings (losses)		(148	)		22			20			224
Net income (loss) attributable to common shareholders	$	39,388		$	47,671		$	154,170		$	133,856
Share Data:
Earnings per Diluted Share	$	0.66		$	0.81		$	2.59		$	2.28
Average Diluted Shares Outstanding		59,317			59,119			59,562			58,812
Average Basic Shares Outstanding		58,275			58,472			58,601			58,473
Supplemental Data:
Cost of Sales	$	385,381		$	349,002		$	1,472,602		$	1,466,030
Selling, General & Administrative		134,926			126,562			510,061			522,044
Depreciation and Amortization ***		15,245			14,347			59,841			58,204
Stock-Based Compensation Expense		3,676			2,464			13,326			9,166

* Includes $18.9 million of sales and $16.4 million of operating profit from the Boeing Company and GE Aviation Systems LLC settlement related to brake control systems.

** 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)

	December 31,		December 31,
	2010		2009
ASSETS
Current Assets
Cash and Cash Equivalents	$	272,941	$	372,714
Accounts Receivable, net		301,918		282,463
Current Insurance Receivable - Asbestos		33,000		35,300
Inventories, net		319,077		284,552
Other Current Assets		61,725		71,317
Total Current Assets		988,661		1,046,346
Property, Plant and Equipment, net		280,746		285,224
Long-Term Insurance Receivable - Asbestos		180,689		213,004
Other Assets		450,936		406,346
Goodwill		810,285		761,978
Total Assets	$	2,711,317	$	2,712,898
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	984	$	1,078
Accounts Payable		157,051		142,390
Current Asbestos Liability		100,000		100,300
Accrued Liabilities		229,462		218,864
Income Taxes		11,057		4,150
Total Current Liabilities		498,554		466,782
Long-Term Debt		398,736		398,557
Long-Term Deferred Tax Liability		50,141		29,578
Long-Term Asbestos Liability		619,666		720,713
Other Liabilities		147,859		203,566
Total Equity		996,361		893,702
Total Liabilities and Equity	$	2,711,317	$	2,712,898

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
Operating Activities:
Net income attributable to common shareholders	$	39,388		$	47,671		$	154,170		$	133,856
Noncontrolling interest in subsidiaries’ earnings (losses)		(148	)		22			20			224
Net income before allocations to noncontrolling interests		39,240			47,693			154,190			134,080
Gain on divestiture		—			—			(1,015	)		—
Depreciation and amortization		15,245			14,347			59,841			58,204
Stock-based compensation expense		3,676			2,464			13,326			9,166
Defined benefit plans and postretirement expense		3,678			4,688			14,712			18,750
Deferred income taxes		(2,885	)		8,680			28,028			26,284
Cash provided by operating working capital		48,105			34,366			(8,262	)		47,403
Defined benefit plans and postretirement contributions		(1,324	)		(21,732	)		(43,226	)		(35,231	)
Environmental payments, net of reimbursements		(158	)		(806	)		(11,063	)		(8,961	)
Other		(8,265	)		(5,372	)		(6,264	)		(4,854	)
Subtotal		97,312			84,328			200,267			244,841
Asbestos related payments, net of insurance recoveries		(23,079	)		(21,039	)		(66,731	)		(55,827	)*
Total provided by operating activities		74,233			63,289			133,536			189,014
Investing Activities:
Capital expenditures		(7,444	)		(7,087	)		(21,033	)		(28,346	)
Proceeds from disposition of capital assets		190			1,442			375			4,768
Payment for acquisition, net of cash acquired		(89,294	)		—			(140,461	)		—
Proceeds from divestiture		—			17,864			4,615			17,864
Total (used for) provided by investing activities		(96,548	)		12,219			(156,504	)		(5,714	)
Financing Activities:
Dividends paid		(13,360	)		(11,704	)		(50,371	)		(46,783	)
Reacquisition of shares on open market		(19,999	)		—			(49,988	)		—
Stock options exercised - net of shares reacquired		6,024			1,369			22,375			1,070
Excess tax benefit from stock-based compensation		1,470			93			3,290			224
Change in short-term debt		(440	)		(109	)		(2,739	)		(16,474	)
Total used for financing activities		(26,305	)		(10,351	)		(77,433	)		(61,963	)
Effect of exchange rate on cash and cash equivalents		5,997			2,669			628			19,537
Increase (decrease) in cash and cash equivalents		(42,623	)		67,826			(99,773	)		140,874
Cash and cash equivalents at beginning of period		315,564			304,888			372,714			231,840
Cash and cash equivalents at end of period	$	272,941		$	372,714		$	272,941		$	372,714

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

CRANE CO.

Order Backlog

(in thousands)

	December 31,			September 30,			June 30,			March 31,			December 31,
	2010			2010			2010			2010			2009
Aerospace & Electronics	$	431,467	*	$	401,585	*	$	394,554	*	$	388,169	*	$	351,004
Engineered Materials		11,831			11,367			12,496			14,810			12,070
Merchandising Systems		30,170	**		18,044			20,346			21,947			23,522
Fluid Handling		271,825			266,578			257,840			253,946			249,901
Controls		22,354			27,575			28,711			26,910			27,958
Total Backlog	$	767,647		$	725,149		$	713,947		$	705,782		$	664,455

* Includes Order Backlog of $22.9 million in December 2010, $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 $8.4 million in December 2010 pertaining to the 2010 acquisition of Money Controls.

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended						Twelve Months Ended						Percent Change			Percent Change
	December 31,						December 31,						December 31, 2010			December 31, 2010
	2010			2009			2010			2009			Three Months			Twelve Months
INCOME ITEMS
Net Sales	$	574,006		$	545,004		$	2,217,825		$	2,196,343			5.3	%		1.0	%
Special Items impacting Net Sales
Agreement related to brake control systems (a)					(18,880	)					(18,880	)
Net Sales before Special Items	$	574,006		$	526,124		$	2,217,825		$	2,177,463			9.1	%		1.9	%
Operating Profit		53,699			69,440			235,162			208,269			-22.7	%		12.9	%
Percentage of Sales		9.4	%		12.7	%		10.6	%		9.5	%
Special Items impacting Operating Profit:
Agreement related to brake control systems, net (a)					(16,360	)					(16,360	)
Lawsuit Settlement - Pre-Tax (b)		—			—						7,250
Restructuring Charges - Pre-Tax (c)		7,841			2,883			6,676			5,243
Non-deductible acquisition transaction costs (d)		1,276			—			1,276			—
Operating Profit before Special Items	$	62,816		$	55,963		$	243,114		$	204,402			12.2	%		18.9	%
Percentage of Sales		10.9	%		10.6	%		11.0	%		9.4	%
Net Income Attributable to Common Shareholders	$	39,388		$	47,671		$	154,170		$	133,856
Per Share	$	0.66		$	0.81		$	2.59		$	2.28			-17.6	%		13.7	%
Special Items impacting Net Income Attributable to Common Shareholders:
Agreement related to brake control systems, net - Net of Tax (a)					(10,634	)					(10,634	)
Per Share					(0.18	)					(0.18	)
Tax benefit from divestiture (e)					(5,238	)					(5,238	)
Per Share					(0.09	)					(0.09	)
Reversal of Tax Provision on Undistributed Foreign Earnings (f)	($	5,625	)				($	5,625	)
Per Share	$	(0.09	)				$	(0.09	)
Lawsuit Settlement - Net of Tax (b)											4,713
Per Share											0.08
Restructuring Charges - Net of Tax (c)		5,293			1,916			4,470			3,703
Per Share	$	0.09		$	0.03		$	0.08		$	0.06
Non-deductible acquisition transaction costs (d)		1,276						1,276
Per Share	$	0.02					$	0.02
Net Income Attributable To Common Shareholders Before Special Items	$	40,332		$	33,715		$	154,291		$	126,400			19.6	%		22.1	%
Per Basic Share	$	0.69		$	0.58		$	2.63		$	2.16
Per Diluted Share	$	0.68		$	0.57		$	2.59		$	2.15			19.2	%		20.5	%

(a) During the three months ended December 31, 2009, the Company recorded an agreement with Boeing and GE Aviation LLC related to the development of brake control systems for the Boeing 787 aircraft.

(b) During the six months ended June 30, 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.

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

(d) During the three months ended December 31, 2010, the Company recorded non-deductible transaction costs associated with the acquisition of Money Controls.

(e) During the three months ended December 31, 2009, the Company recorded a tax benefit related to the divestiture of one of its businesses.

(f) During the three months ended December 31, 2010, the Company recorded a tax benefit caused by the reinvestment of non-U.S. earnings associated with the acquisition of Money Controls.

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2010			2009			2010			2009
CASH FLOW ITEMS
Cash Provided from Operating Activities before Asbestos - Related Payments	$	97,312		$	84,328	*	$	200,267	**	$	244,841	*
Asbestos Related Payments, Net of Insurance Recoveries		(23,079	)		(21,039	)		(66,731	)		(55,827	)***
Cash Provided from Operating Activities		74,233			63,289			133,536			189,014
Less: Capital Expenditures		(7,444	)		(7,087	)		(21,033	)		(28,346	)
Free Cash Flow	$	66,789		$	56,202		$	112,503		$	160,668

* Includes a $17 million discretionary pension contribution.

** Includes a $25 million discretionary pension contribution.

*** 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 liquidity from its operating activities. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principle payments on the Company’s long-term debt. 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.

Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in the context of the definitions of the elements of such measures we provide and in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.