8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 25, 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 July 25, 2011, Crane Co. announced its results of operations for the quarter ended June 30, 2011. Copies of the related press release and quarterly financial data supplement are being furnished as Exhibits 99.1 and 99.2 to this Form 8-K.

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

SECTION 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of June 30, 2011, the Company was a defendant in cases filed in various state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2011			2010			2011			2010			2010
Beginning claims		64,646			67,479			64,839			66,341			66,341
New claims		893			824			1,858			1,737			5,032
Settlements		(263	)		(242	)		(603	)		(532	)		(1,127	)
Dismissals		(8,873	)		(2,709	)		(9,690	)		(3,151	)		(6,363	)
MARDOC claims*		—			—			(1	)		957			956
Ending claims		56,403			65,352			56,403			65,352			64,839

* 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 June 30, 2011, 955 claims were restored to active status (and have been added to “Ending claims”), and 11,256 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 24,245 maritime actions will be activated, or permanently dismissed, as the Court’s review process continues.

Of the 56,403 pending claims as of June 30, 2011, approximately 21,000 claims were pending in New York, approximately 9,900 claims were pending in Texas, approximately 5,500 claims were pending in Mississippi, 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 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

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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 of 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, and the court will hear the appeal in August 2011.

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. On February 23, 2011, the court entered judgment on the verdicts in the amount of $0.2 million against the Company, only, in Bell, and in the amount of $4.0 million, jointly, against the Company and two other defendants in Nelson, with additional interest in the amount of $0.01 million being assessed against the Company, only, in Nelson. All defendants, including the Company, and the plaintiffs have taken timely appeals of certain aspects of those judgments. Those appeals are pending.

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 six-month periods ended June 30, 2011 and 2010 totaled $56.2 million and $52.0 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 six-month periods ended June 30, 2011 and 2010 totaled a $35.6 million net payment and a $27.5 million net payment, respectively. Detailed below are the comparable amounts for the periods indicated.

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(in millions)	Three Months Ended June 30,						Six Months Ended June 30,						Year Ended December 31,
	2011			2010			2011			2010			2010
Settlement / indemnity costs incurred (1)	$	13.9		$	10.6		$	30.1		$	26.1		$	52.7
Defense costs incurred (1)		14.7			13.9			26.1			25.9			53.9
Total costs incurred	$	28.6		$	24.5		$	56.2		$	52.0		$	106.6
Settlement / indemnity payments	$	13.0		$	10.0		$	21.5		$	22.5		$	46.9
Defense payments		16.7			13.9			27.4			25.4			54.4
Insurance receipts		(6.8	)		(7.5	)		(13.3	)		(20.4	)		(34.6	)
Pre-tax cash payments	$	22.9		$	16.4		$	35.6		$	27.5		$	66.7

(1) Before insurance recoveries and tax effects.

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 June 30, 2011, the Company has resolved (by settlement or dismissal) approximately 83,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $300 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

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percentage of mesothelioma claims dismissed against the Company and (4) the aggregate defense costs incurred by the Company. These factors are interdependent, and no one factor predominates in determining the liability estimate. Although the methodology used by HR&A will also show claims and costs for periods subsequent to the indicated period (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of uncertainty regarding the various factors used in estimating future asbestos costs is too great to provide for reasonable estimation of the number of future claims, the nature of such claims or the cost to resolve them for years beyond the indicated estimate.

In the Company’s view, the forecast period used to provide the best estimate for asbestos claims and related liabilities and costs is a judgment based upon a number of trend factors, including the number and type of claims being filed each year; the jurisdictions where such claims are filed, and the effect of any legislation or judicial orders in such jurisdictions restricting the types of claims that can proceed to trial on the merits; and the likelihood of any comprehensive asbestos legislation at the federal level. In addition, the dynamics of asbestos litigation in the tort system have been significantly affected over the past five to ten years by the substantial number of companies that have filed for bankruptcy protection, thereby staying any asbestos claims against them until the conclusion of such proceedings, and the establishment of a number of post-bankruptcy trusts for asbestos claimants, which are estimated to provide $30 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 continues to monitor 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 or projected to be 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 June 30, 2011, the Company’s actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions

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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 June 30, 2011. 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 $671 million as of June 30, 2011, 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 June 30, 2011 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 been paying the shares of defense and indemnity costs the Company has allocated to it, subject to a reservation of rights. 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

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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 $200 million as of June 30, 2011.

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 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 there are significant developments in the trend of case law or court procedures, 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

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the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material.

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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a) None

(b) None

(c) None

(d) Exhibits

99.1 Earnings Press Release dated July 25, 2011, issued by Crane Co.

99.2 Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2011

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SIGNATURES

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

	CRANE CO.
Dated: July 25, 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 July 25, 2011, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended June 30, 2011.

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EX-99.1

Exhibit 99.1

Crane Co. NEWS

Contact:

Richard E. Koch

Director, Investor Relations

and Corporate Communications

203-363-7352

www.craneco.com

CRANE CO. REPORTS SECOND QUARTER EARNINGS INCREASED 27%;

RAISES FULL YEAR EPS GUIDANCE RANGE TO $3.30-$3.45;

INCREASES DIVIDEND 13%

STAMFORD, CONNECTICUT – July 25, 2011 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported that second quarter 2011 earnings per diluted share increased 27% to $0.85 compared to $0.67 in the second quarter of 2010.

Second quarter 2011 sales of $644 million increased $91 million, or 16%, compared to the second quarter of 2010, resulting from a core sales increase of $57 million (10%), favorable foreign currency translation of $24 million (4%) and an increase in sales from acquisitions, net of divestitures, of $10 million (2%).

Second quarter 2011 operating profit increased 22% to $79.9 million, compared to $65.3 million in the second quarter of 2010, and operating profit margin increased to 12.4%, compared to 11.8% in the second quarter of 2010.

“I am pleased with our second quarter results as strong core revenue growth and continued solid execution are sustaining the momentum that we carried into 2011. I expect our earnings to continue to improve in the second half of the year,” said Crane Co. president and chief executive

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officer Eric C. Fast. “Reflecting the strong performance of our late-cycle Aerospace and Fluid Handling businesses, we are raising our full year sales, EPS and cash flow guidance. In addition, given our confidence in the Company’s future, we are increasing our quarterly dividend by 13%.”

Increased Full Year 2011 Guidance

Sales for 2011 are now expected to increase approximately 14% - 16%, compared to our prior guidance of 10% - 12%, driven by strong core sales growth. Our 2011 earnings guidance is now a range of $3.30 - $3.45 per diluted share, compared to our previous guidance of $3.05 - $3.25 per diluted share. Free cash flow (cash provided by operating activities less capital spending) is now expected to be in a range of $140 - $160 million, compared to our previous estimate of $130 - $150 million. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

Cash Flow and Financial Position

Cash provided by operating activities in the second quarter of 2011 was $31.4 million, which included investment in working capital to support improving sales trends, compared to $47.1 million in the second quarter of 2010. During the second quarter of 2011, the Company repurchased 421,300 shares of its common stock for approximately $20 million. The Company’s cash position at June 30, 2011 was $231 million, as compared to $233 million at March 31, 2011.

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Segment Results

All comparisons detailed in this section refer to the second quarter 2011 versus the second quarter 2010.

Aerospace & Electronics

	Second Quarter						Change
(dollars in millions)	2011			2010
Sales	$	171.5		$	139.3		$	32.2	23	%
Operating Profit	$	37.2		$	26.2		$	10.9	42	%
Profit Margin		21.7	%		18.8	%

Second quarter 2011 sales increased $32.2 million, or 23%, reflecting an $18.1 million (21%) improvement in Aerospace Group sales and an increase of $14.1 million (26%) in Electronics Group revenue. The Aerospace Group sales increase reflected higher OEM and aftermarket shipments while Electronics Group sales grew across all business solutions. Segment operating profit of $37.2 million increased by $10.9 million, or 42%, reflecting effective leverage of the strong sales growth in both groups.

Aerospace & Electronics order backlog was $432 million at June 30, 2011, compared to $431 million at December 31, 2010, and $395 million at June 30, 2010.

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Engineered Materials

	Second Quarter						Change
(dollars in millions)	2011			2010
Sales	$	60.1		$	58.6		$	1.5		2	%
Operating Profit	$	9.1		$	10.2		($	1.0	)	-10	%
Profit Margin		15.2	%		17.3	%

Segment sales of $60.1 million increased 2% compared to the second quarter of 2010, as a result of higher revenues from transportation and building products customers, partially offset by a decline in sales to recreational vehicle manufacturers, as OEMs reduced production in late June. Overall, the sales increase was driven by higher selling prices. Although the full effect of price increases implemented in the first quarter positively impacted the quarter, operating margin declined modestly to 15.2%, as raw material cost increases were greater than anticipated.

Merchandising Systems

	Second Quarter						Change
(dollars in millions)	2011			2010
Sales	$	94.0		$	74.5		$	19.5		26	%
Operating Profit	$	7.1		$	8.1		($	1.0	)	-12	%
Profit Margin		7.6	%		10.9	%

Merchandising Systems sales of $94.0 million increased $19.5 million, or 26%, reflecting $13.2 million of sales associated with the December 2010 acquisition of Money Controls (18%). Excluding the acquisition, both Payment Solutions and Vending sales increased in the quarter.

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Operating profit of $7.1 million declined from the prior year as 2010 was favorably impacted by the receipt of a patent litigation settlement.

Fluid Handling

	Second Quarter						Change
(dollars in millions)	2011			2010
Sales	$	289.0		$	254.6		$	34.4	14	%
Operating Profit	$	36.9		$	32.2		$	4.8	15	%
Profit Margin		12.8	%		12.6	%

Second quarter 2011 sales increased $34.4 million, or 13.5%, which included a core sales increase of $16.2 million (6.4%), and favorable foreign currency translation of $18.2 million (7.1%). Sales increased in each major business unit. Operating margins improved from 12.6% to 12.8%. Quote activity continues to increase and order trends continue to strengthen across the Fluid Handling businesses. Backlog increased to $323 million at June 30, 2011, compared to $272 million at December 31, 2010 and $258 million at June 30, 2010.

On July 12, 2011, Crane purchased W. T. Armatur GmbH & Co. KG (“WTA”) for approximately $38 million. WTA is primarily a manufacturer of bellows sealed globe valves for chemical, fertilizer and thermal oil applications, with 2010 sales of approximately $21 million. This acquisition will strengthen and broaden Fluid Handling’s portfolio by providing valves with zero fugitive emissions used in severe service applications.

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Controls

	Second Quarter						Change
(dollars in millions)	2011			2010
Sales	$	29.2		$	25.8		$	3.4	13	%
Operating Profit	$	3.7		$	0.8		$	2.9	351	%
Profit Margin		12.7	%		3.2	%

Second quarter 2011 sales of $29.2 million increased 13%, primarily reflecting improvement in industrial, transportation, and upstream oil and gas related demand. Operating profit of $3.7 million increased significantly over 2010, reflecting strong leverage and the absence of operating losses associated with divested businesses.

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 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 second quarter financial results on Tuesday, July 26, 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.

6

Crane Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. The Company has five business segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling, and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia. Crane Co. is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com.

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, 2010 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2011 – 13

7

EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Net Sales:
Aerospace & Electronics	$	171,538		$	139,299		$	333,474		$	272,944
Engineered Materials		60,101			58,646			121,933			112,401
Merchandising Systems		94,010			74,527			188,888			144,698
Fluid Handling		288,965			254,587			553,107			502,376
Controls		29,159			25,755			57,391			50,686
Total Net Sales	$	643,773		$	552,814		$	1,254,793		$	1,083,105
Operating Profit (Loss):
Aerospace & Electronics	$	37,157		$	26,215		$	71,199		$	50,704
Engineered Materials		9,130			10,172			19,273			18,712
Merchandising Systems		7,114			8,110			11,787			13,079
Fluid Handling		36,943			32,152			72,396			60,141
Controls		3,717			825			6,828			951
Corporate		(14,118	)		(12,170	)		(28,680	)		(25,003	)
Total Operating Profit		79,943			65,304			152,803			118,584
Interest Income		389			236			679			461
Interest Expense		(6,429	)		(6,657	)		(13,051	)		(13,383	)
Miscellaneous- Net		(290	)		(604	)		3,335	*		(625	)
Income Before Income Taxes		73,613			58,279			143,766			105,037
Provision for Income Taxes		23,076			18,116			44,851			31,690
Net income before allocations to noncontrolling interests		50,537			40,163			98,915			73,347
Less: Noncontrolling interest in subsidiaries’ earnings		100			122			11			72
Net income attributable to common shareholders	$	50,437		$	40,041		$	98,904		$	73,275
Share Data:
Earnings per Diluted Share	$	0.85		$	0.67		$	1.66		$	1.23
Average Diluted Shares Outstanding		59,348			59,894			59,457			59,716
Average Basic Shares Outstanding		58,173			58,909			58,259			58,777
Supplemental Data:
Cost of Sales	$	423,041		$	361,779		$	820,891		$	714,050
Selling, General & Administrative		140,789			125,731			281,099			250,471
Depreciation and Amortization **		15,853			15,408			31,627			29,845
Stock-Based Compensation Expense		3,771			3,172			7,274			6,344

* Primarily related to the sale of a building and the divestiture of a small product line in the three months ended March 31, 2011.

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

CRANE CO.

Condensed Balance Sheets

(in thousands)

	June 30, 2011		December 31, 2010
ASSETS
Current Assets
Cash and Cash Equivalents	$	231,365	$	272,941
Accounts Receivable, net		377,948		301,918
Current Insurance Receivable - Asbestos		33,000		33,000
Inventories, net		362,113		319,077
Other Current Assets		67,442		61,725
Total Current Assets		1,071,868		988,661
Property, Plant and Equipment, net		284,101		280,746
Long-Term Insurance Receivable - Asbestos		167,412		180,689
Other Assets		422,438		446,316
Goodwill		824,318		810,285
Total Assets	$	2,770,137	$	2,706,697
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	464	$	984
Accounts Payable		180,216		157,051
Current Asbestos Liability		100,000		100,000
Accrued Liabilities		221,972		229,462
Income Taxes		18,882		11,057
Total Current Liabilities		521,534		498,554
Long-Term Debt		398,825		398,736
Long-Term Deferred Tax Liability		50,224		48,852
Long-Term Asbestos Liability		570,768		619,666
Other Liabilities		139,521		147,859
Total Equity		1,089,265		993,030
Total Liabilities and Equity	$	2,770,137	$	2,706,697

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Operating Activities:
Net income attributable to common shareholders	$	50,437		$	40,041		$	98,904		$	73,275
Noncontrolling interest in subsidiaries’ earnings		100			122			11			72
Net income before allocations to noncontrolling interests		50,537			40,163			98,915			73,347
Gain on divestiture		—			—			(4,258	)		—
Depreciation and amortization		15,853			15,408			31,627			29,845
Stock-based compensation expense		3,771			3,172			7,274			6,344
Defined benefit plans and postretirement expense		843			3,775			3,592			6,150
Deferred income taxes		6,627			6,538			13,520			13,220
Cash provided by (used for) operating working capital		(18,141	)		11,041			(85,391	)		(20,646	)
Defined benefit plans and postretirement contributions		(5,579	)		(5,213	)		(10,358	)		(6,289	)
Environmental payments, net of reimbursements		(1,541	)		(3,117	)		(6,134	)		(6,317	)
Other		1,895			(8,321	)		2,037			(4,265	)
Subtotal		54,265			63,446			50,824			91,389
Asbestos related payments, net of insurance recoveries		(22,896	)		(16,360	)		(35,621	)		(27,485	)
Total provided by operating activities		31,369			47,086			15,203			63,904
Investing Activities:
Capital expenditures		(10,144	)		(4,271	)		(18,282	)		(8,390	)
Proceeds from disposition of capital assets		(23	)		42			4,530			42
Payment for acquisition, net of cash acquired		—			—			—			(51,167	)
Proceeds from divestiture		—			—			1,000			—
Total used for investing activities		(10,167	)		(4,229	)		(12,752	)		(59,515	)
Financing Activities:
Dividends paid		(13,385	)		(11,815	)		(26,859	)		(23,558	)
Reacquisition of shares on open market		(20,000	)		(9,990	)		(49,999	)		(9,990	)
Stock options exercised - net of shares reacquired		4,472			7,675			17,024			12,389
Excess tax benefit from stock-based compensation		1,407			578			5,359			969
Change in short-term debt		(454	)		(87	)		(530	)		(3,133	)
Total used for financing activities		(27,960	)		(13,639	)		(55,005	)		(23,323	)
Effect of exchange rate on cash and cash equivalents		4,961			(13,273	)		10,978			(18,251	)
Increase (decrease) in cash and cash equivalents		(1,797	)		15,945			(41,576	)		(37,185	)
Cash and cash equivalents at beginning of period		233,162			319,584			272,941			372,714
Cash and cash equivalents at end of period	$	231,365		$	335,529		$	231,365		$	335,529

CRANE CO.

Order Backlog

(in thousands)

	June 30,			March 31,			December 31,			September 30,		June 30,
	2011			2011			2010			2010		2010
Aerospace & Electronics	$	431,799		$	454,559		$	431,467		$	401,585	$	394,554
Engineered Materials		13,087			13,826			11,831			11,367		12,496
Merchandising Systems		26,898	*		25,008	*		30,170	*		18,044		20,346
Fluid Handling		323,045			305,255			271,825			266,578		257,840
Controls		30,323			24,015			22,354			27,575		28,711
Total Backlog	$	825,152		$	822,663		$	767,647		$	725,149	$	713,947

* Includes Order Backlog of $6.2 million at June 30, 2011, $5.3 million at March 31, 2011 and $8.4 million at December 31, 2010 pertaining to the 2010 acquisition of Money Controls.

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
CASH FLOW ITEMS
Cash Provided from Operating Activities before Asbestos - Related Payments	$	54,265		$	63,446		$	50,824		$	91,389
Asbestos Related Payments, Net of Insurance Recoveries		(22,896	)		(16,360	)		(35,621	)		(27,485	)
Cash Provided from Operating Activities		31,369			47,086			15,203			63,904
Less: Capital Expenditures		(10,144	)		(4,271	)		(18,282	)		(8,390	)
Free Cash Flow	$	21,225		$	42,815		$	(3,079	)	$	55,514

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 principal 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.