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 23, 2012

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 23, 2012, Crane Co. announced its results of operations for the quarter ended December 31, 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 December 31, 2011, the Company was a defendant in cases filed in numerous 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,
	2011			2010			2009
Beginning claims		64,839			66,341			74,872
New claims		3,748			5,032			3,664
Settlements*		(1,117	)		(1,127	)		(1,024	)
Dismissals		(11,059	)		(6,363	)		(11,171	)
MARDOC claims**		2,247			956			—
Ending claims		58,658			64,839			66,341

* Includes Earl Haupt judgment.

** As of January 1, 2010, the Company was named in 36,448 maritime actions which had been administratively dismissed by the United States District Court for the Eastern District of Pennsylvania (“MARDOC claims”), and therefore were not included in “Beginning claims”. As of December 31, 2011, pursuant to an ongoing review process initiated by the Court, 26,605 claims were permanently dismissed, 3,200 claims were restored to active status and 3 new filings in 2011 were added to active status (and have been added to “Ending claims”). 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 6,648 maritime actions will be activated, or permanently dismissed, as the Court’s review process continues.

Of the 58,658 pending claims as of December 31, 2011, approximately 20,800 claims were pending in New York, approximately 10,000 claims were pending in Texas, approximately 5,500 claims were pending in Mississippi, and approximately 5,300 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. In an opinion dated January 12, 2012, the California Supreme Court reversed the decision of the Court of Appeal and instructed the trial court to enter a judgment of nonsuit in favor of the defendants.

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 trial court’s ruling was affirmed on appeal by order dated August 25, 2011. The plaintiffs have appealed that ruling to the Supreme Court of California, which has accepted review of the matter.

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.

On August 17, 2011, a New York City state court jury found the Company responsible for a 99% share of a $32 million verdict on the Ronald Dummitt claim. The Company has filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which the Company argues are excessive under New York appellate case law governing awards for non-economic losses. The Court held oral argument on these motions on October 18, 2011, and a written decision is expected to be issued. The Company anticipates that it will likely appeal any judgment that may be entered on the verdict.

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, 2011, 2010 and 2009 totaled $105.5 million, $106.6 million and $110.1 million, respectively.

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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, 2011, 2010 and 2009 totaled a $79.3 million net payment, $66.7 million net payment and a $55.8 million net payment (reflecting the receipt of $14.5 million in 2009 for full policy buyout from Highlands Insurance Company (“Highlands”), respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)	Year Ended December 31,
	2011			2010			2009
Settlement / indemnity costs incurred (1)	$	50.2		$	52.7		$	58.3
Defense costs incurred (1)		55.3			53.9			51.8
Total costs incurred	$	105.5		$	106.6		$	110.1
Settlement / indemnity payments	$	55.0		$	46.9		$	57.3
Defense payments		56.5			54.4			52.2
Insurance receipts (2)		(32.2	)		(34.6	)		(53.7	)
Pre-tax cash payments (2)	$	79.3		$	66.7		$	55.8

(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, 2011, the Company has resolved (by settlement or dismissal) approximately 84,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $330 million, for an average settlement cost per resolved claim of approximately $4,000. The average settlement cost per claim resolved during the years ended December 31, 2011, 2010 and 2009 was $4,123, $7,036 and $4,781 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

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filed, settled and dismissed. The Company’s experience is then compared to the results of previously conducted epidemiological studies estimating the number of individuals likely to develop asbestos-related diseases. Those studies were undertaken in connection with national analyses of the population of workers believed to have been exposed to asbestos. Using that information, HR&A estimates the number of future claims that would be filed against the Company and estimates the aggregate settlement or indemnity costs that would be incurred to resolve both pending and future claims based upon the average settlement costs by disease during the reference period. This methodology has been accepted by numerous courts. After discussions with the Company, HR&A augments its liability estimate for the costs of defending asbestos claims in the tort system using a forecast from the Company which is based upon discussions with its defense counsel. Based on this information, HR&A compiles an estimate of the Company’s asbestos liability for pending and future claims, based on claim experience during the reference period and covering claims expected to be filed through the indicated forecast period. The most significant factors affecting the liability estimate are (1) the number of new mesothelioma claims filed against the Company, (2) the average settlement costs for mesothelioma claims, (3) the percentage of mesothelioma claims dismissed against the Company and (4) the aggregate defense costs incurred by the Company. These factors are interdependent, and no one factor predominates in determining the liability estimate. Although the methodology used by HR&A will also show claims and costs for periods subsequent to the indicated period (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of 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.

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. In addition to this claims experience, the Company also considers 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. As part of this process, the Company also takes into account trends in the tort system such as those enumerated above. Management considers all these factors in conjunction with the liability estimate of HR&A and determines whether a change in the estimate is warranted.

Updating the Liability Estimate. With the assistance of HR&A, effective as of December 31, 2011, 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 2021. The Company’s previous estimate was for asbestos claims filed or projected to be filed through 2017. As a result of this updated estimate, the Company recorded an additional liability of $285 million as of December 31, 2011. The Company’s decision to take this action at such date was based on several factors which contribute to the Company’s ability to reasonably estimate this liability for the additional period noted. First, the number of mesothelioma claims (which although constituting approximately 8% of the Company’s total pending asbestos claims, have accounted for approximately 90% of the Company’s aggregate settlement and defense costs) being filed against the Company and

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associated settlement costs have recently stabilized. In the Company’s opinion, the outlook for mesothelioma claims expected to be filed and resolved in the forecast period is reasonably stable. Second, there have been favorable developments in the trend of case law which has been a contributing factor in stabilizing the asbestos claims activity and related settlement costs. Third, 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 claims activity. Fourth, the Company has now entered into coverage-in-place agreements with almost all 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 2021. 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 2021. Accordingly, no accrual has been recorded for any costs which may be incurred for claims which may be made subsequent to 2021.

Management has made its best estimate of the costs through 2021 based on the analysis by HR&A completed in January 2012. A liability of $894 million was recorded as of December 31, 2011 to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2021, of which approximately 80% is attributable to settlement and defense costs for future claims projected to be filed through 2021. The liability is reduced when cash payments are made in respect of settled claims and defense costs. 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 2021, 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, 2011 was $101 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. Similarly, under a variant of coverage-in-place, the Company has entered into an agreement with a group of insurers confirming the aggregate amount of available coverage under the subject 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. Reimbursements from insurers for past and ongoing settlement and defense costs allocable to their policies have been made in accordance with these coverage-in-place and other agreements. 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

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coverage-in-place and other settlement agreements described above, as well as a number of additional factors. These additional factors include the financial viability of the insurance companies, the method by which losses will be allocated to the various insurance policies and the years covered by those policies, how settlement and defense costs will be covered by the insurance policies and interpretation of the effect on coverage of various policy terms and limits and their interrelationships. In addition, the timing and amount of reimbursements will vary because the Company’s insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage. In addition to consulting with legal counsel on these insurance matters, the Company retained insurance consultants to assist management in the estimation of probable insurance recoveries based upon the aggregate liability estimate described above and assuming the continued viability of all solvent insurance carriers. Based upon the analysis of policy terms and other factors noted above by the Company’s legal counsel, and incorporating risk mitigation judgments by the Company where policy terms or other factors were not certain, the Company’s insurance consultants compiled a model indicating how the Company’s historical insurance policies would respond to varying levels of asbestos settlement and defense costs and the allocation of such costs between such insurers and the Company. Using the estimated liability as of December 31, 2011 (for claims filed or expected to be filed through 2021), the insurance consultant’s model forecasted that approximately 25% of the liability would be reimbursed by the Company’s insurers, 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 or expected to be filed through 2021) that is in excess of available insurance coverage allocated to such years. An asset of $225 million was recorded as of December 31, 2011 representing the probable insurance reimbursement for such claims expected through 2021. The asset is reduced as reimbursements and other payments from insurers are received.

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 and, the effect of any additional lump-sum payments under policy buyout agreements.

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 past experience 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 that withstand appeal. A legislative solution, structured settlement transaction, or significant change in relevant case law 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 or settlement agreements.

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

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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 beyond 2021. Although the resolution of these claims may take many years, the effect on the results of operations, financial position and cash flow in any given period from a revision to these estimates could be material.

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SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a)	None
(b)	None
(c)	None
(d)	Exhibits
99.1	Earnings Press Release dated January 23, 2012, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 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: January 23, 2012
	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 23, 2012, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended December 31, 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 STRONG OPERATING RESULTS

BEFORE PROVISIONS EXTENDING ASBESTOS

AND ENVIRONMENTAL LIABILITY ESTIMATES;

SETS 2012 EPS GUIDANCE OF $3.75 - $3.95

STAMFORD, CONNECTICUT – January 23, 2012 - Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported a fourth quarter 2011 net loss of $2.16 per share, compared to earnings of $0.66 per diluted share in the fourth quarter of 2010. Fourth quarter 2011 results include an after-tax asbestos provision of $157 million and an after-tax environmental provision of $20 million (totaling $3.05 per share). Fourth quarter 2010 results were impacted by net after-tax charges from Special Items of $0.02 per diluted share. Excluding these Special Items, fourth quarter 2011 earnings per diluted share increased 29% to $0.88 compared to $0.68 in the fourth quarter of 2010. (Please see the attached Non-GAAP Financial Measures table for pretax, after-tax and earnings per share amounts of Special Items.)

Fourth quarter 2011 sales of $632 million increased $58 million, or 10%, compared to the fourth quarter of 2010, resulting from a core sales increase of $40 million (7%), an increase in sales from acquired businesses (net of divestitures) of $16 million (3%), and favorable foreign currency translation of $2 million.

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The operating loss in the fourth quarter of 2011 was $192.7 million compared to an operating profit of $53.7 million in the fourth quarter of 2010. Excluding Special Items, fourth quarter 2011 operating profit increased 26.3% to $79.3 million compared to $62.8 million in the fourth quarter of 2010, and operating profit margin increased to 12.6%, compared to 10.9% in the fourth quarter of 2010. (Please see the attached Non-GAAP Financial Measures table.)

Full Year 2011 Results

Total sales in 2011 were $2.55 billion, an increase of 15% from $2.22 billion in 2010, resulting from a core sales increase of $217 million (10%), an increase in sales from acquired businesses (net of divestitures) of $60 million (3%), and favorable foreign currency translation of $51 million (2%).

Operating profit for the full year 2011 was $42.3 million compared to $235.2 million in 2010. Excluding Special Items, 2011 operating profit increased 29.3% to $314.2 million compared to $243.1 million in 2010, and operating profit margin increased to 12.3%, compared to 11.0% in 2010.

Full year 2011 earnings per diluted share declined to $0.44, compared to $2.59 in 2010. Excluding Special Items, 2011 earnings per diluted share increased 32% to $3.43 compared to $2.59 in 2010. (Please see the attached Non-GAAP Financial Measures table.)

Order backlog was $778 million at December 31, 2011 compared to $768 million at December 31, 2010.

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“We are pleased to report a record full year EPS of $3.43, excluding Special Items, in line with our most recently issued guidance and significantly better than the $2.80-$3.00 range for 2011 that we expected a year ago,” said Crane Co. president and chief executive officer, Eric C. Fast. “Excluding Special Items, full year operating margin was 12.3%, a substantial improvement over 11.0% in 2010, and we expect to achieve our 13% operating margin target in 2012. The more stable trends we have experienced over the last several years enable us to extend our reserve for asbestos.”

Fourth Quarter 2011 Special Items

As of December 31, 2011, the Company extended the time horizon of its estimate of asbestos liability from 2017 to 2021, reflecting stabilization in key trends, such as indemnity and defense costs and the number of claims filed against the Company. The following table shows the Company’s estimate of its asbestos liability, net of insurance reimbursements and net of tax, of $277 million prior to extending the timeframe of the liability estimate; the $157 million effect of the extension; and the total of $434 million as of December 31, 2011.

($ millions)				Impact to Extend Liability to 2021
	Liability Thru 2017 Before 4Q 2011 Provision			4Q 2011 Provision			Balance @ 12/31/11
Asbestos Liability	$	608		$	285		$	894
Insurance Receivable		(181	)		(44	)		(225	)
Net Asbestos Liability		427			242			668
Tax Benefit		(149	)		(85	)		(234	)
After-Tax Asbestos Liability	$	277		$	157		$	434

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The Company estimates that its annual, after-insurance, after-tax cash outflow associated with its asbestos liability will generally be in the $40 - $50 million range through 2021, similar to the level of outflow experienced during 2010 and 2011. Additional information on the Company’s asbestos liability exposure is available in its Form 8-K filed with the SEC today.

As of December 31, 2011, the Company increased its environmental liability for its legacy Superfund Site in Goodyear, Arizona by $30 million ($20 million after tax), reflecting changes in site remediation requirements and accrued costs through 2016.

Cash Flow and Financial Position

Cash provided by operating activities in the fourth quarter of 2011 was $84.8 million, after the effect of a $30 million discretionary pension contribution made in December, compared to $74.2 million in the fourth quarter of 2010. Free cash flow (cash provided by operating activities less capital spending) for the fourth quarter of 2011 was $77.8 million, compared to $66.8 million in the fourth quarter of 2010. For the full year 2011, cash provided by operating activities was $149.8 million compared to $133.5 million in 2010. Free cash flow for the full year 2011 was $115.1 million, compared to $112.5 million in the prior year, in line with our October guidance before discretionary pension contributions; discretionary pension contributions were $30 million and $25 million, respectively, in 2011 and 2010. The Company repurchased 1,706,903 shares of its common stock during 2011 at a cost of $80 million, including 650,773 shares in the fourth quarter for $30 million. The Company’s cash position was $245 million at December 31, 2011, as compared to $211 million at September 30, 2011. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

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Segment Results

All comparisons detailed in this section refer to the fourth quarter 2011 versus the fourth quarter 2010. The commentary refers to the results before Special Items.

Aerospace & Electronics

	Fourth Quarter
(dollars in millions)	2011			2010			Change
Sales	$	172.0		$	161.1		$	10.9	7	%
Operating Profit	$	38.8		$	33.2		$	5.6	17	%
Operating Profit, before Special Items*	$	38.8		$	33.3		$	5.5	17	%
Profit Margin		22.6	%		20.6	%
Profit Margin, before Special Items		22.6	%		20.7	%

* 4Q’10 excludes restructuring charges of $0.2 million

Fourth quarter 2011 sales increased $10.9 million, or 7%, reflecting a $12.7 million increase (13%) in Aerospace Group sales and a decrease of $1.8 million (3%) in Electronics Group revenue. The Aerospace sales growth reflected higher OEM and aftermarket activity, with an increase in both commercial and military related demand. Segment operating profit increased by 17% and margins improved to 22.6% as the higher volume and margins in the Aerospace Group offset the modest decline in the Electronics Group.

Aerospace & Electronics order backlog was $411 million at December 31, 2011 compared to $409 million at September 30, 2011 and $431 million at December 31, 2010.

5

Engineered Materials

	Fourth Quarter
(dollars in millions)	2011			2010			Change
Sales	$	45.0		$	45.0			—	—
Operating Profit	$	4.6		$	3.5		$	1.1	32	%
Profit Margin		10.1	%		7.7	%

Segment sales of $45.0 million were equal to the fourth quarter of 2010, with slightly lower sales to recreational vehicle manufacturers offset by higher sales to transportation and building products customers. Operating profit and margins improved to $4.6 million and 10.1%, respectively, primarily reflecting the impact of higher selling prices and improved productivity.

Merchandising Systems

	Fourth Quarter
(dollars in millions)	2011			2010			Change
Sales	$	86.2		$	76.1		$	10.1	13	%
Operating Profit	$	7.7		($	2.6	)	$	10.3	NM
Operating Profit, before Special Items*	$	7.7		$	2.9		$	4.8	167	%
Profit Margin		8.9	%		-3.4	%
Profit Margin, before Special Items		8.9	%		3.8	%

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

Merchandising Systems sales of $86.2 million increased $10.1 million, or 13%, primarily reflecting sales associated with the December 2010 acquisition of Money Controls. Operating profit and margins increased reflecting improved operating results in both Vending and Payment Solutions, including a positive contribution from Money Controls.

6

Fluid Handling

	Fourth Quarter
(dollars in millions)	2011			2010			Change
Sales	$	297.5		$	261.7		$	35.8	14	%
Operating Profit	$	38.8		$	29.3		$	9.5	33	%
Operating Profit, before Special Items*	$	38.8		$	32.7		$	6.1	19	%
Profit Margin		13.0	%		11.2	%
Profit Margin, before Special Items		13.0	%		12.5	%

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

Fourth quarter 2011 sales increased $35.8 million, or 13.7%, which included a core sales increase of $29.9 million (11.4%), an increase in sales from the acquisition of W. T. Armatur (WTA) of $4.8 million (1.9%), and favorable foreign currency translation of $1.0 million (0.4%). The sales increase was broad based across Fluid Handling and operating margin improved to 13%. Fluid Handling order backlog was $314 million at December 31, 2011, compared to $329 million at September 30, 2011 and $272 million at December 31, 2010.

Controls

	Fourth Quarter
(dollars in millions)	2011			2010			Change
Sales	$	30.9		$	30.1		$	0.8	3	%
Operating Profit	$	3.2		$	2.9		$	0.3	9	%
Profit Margin		10.4	%		9.8	%

Fourth quarter 2011 sales of $30.9 million increased 3%, driven by continued improvement in industrial, transportation and upstream oil and gas related end markets. The operating profit increase reflected leverage of the higher sales volume.

7

Full Year 2012 Guidance

Sales for 2012 are expected to increase approximately 3-5% driven by a core sales increase of 5-6%, incremental sales from the WTA acquisition of less than 1%, partially offset by unfavorable foreign exchange of approximately 2%. Our 2012 earnings guidance is a range of $3.75 - $3.95 per diluted share, reflecting revenue and profit growth across all of our segments. On a comparable basis and before Special Items, 2011 earnings per diluted share were $3.43. Segment-specific sales and operating profit guidance will be provided at our Investor Day conference on February 16, 2012. The Company’s 2012 free cash flow (cash provided by operating activities less capital spending) guidance of $160 - $190 million includes the effect of asbestos related cash flows.

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 24, 2012 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.

8

Crane Co. Investor Day

The Company will hold its annual Investor Day conference on Thursday, February 16 in New York City from 8:30 am to noon and 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, 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)

2012 – 2

9

EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2011			2010			2011			2010
Net Sales:
Aerospace & Electronics	$	171,973		$	161,059		$	677,663		$	577,164
Engineered Materials		45,037			44,975			220,071			212,280
Merchandising Systems		86,204			76,143			373,907			298,040
Fluid Handling		297,475			261,719			1,154,135			1,019,937
Controls		30,929			30,110			120,091			110,404
Total Net Sales	$	631,618		$	574,006		$	2,545,867		$	2,217,825
Operating Profit (Loss):
Aerospace & Electronics	$	38,785		$	33,156		$	145,624		$	109,228
Engineered Materials		4,562			3,466			29,754			30,143
Merchandising Systems		7,705			(2,611	)		30,337			16,729
Fluid Handling		38,804			29,252			152,066			122,590
Controls		3,211			2,943			14,658			5,843
Corporate		(13,748	)		(12,507	)		(58,201	)		(49,371	)
Asbestos Provision		(241,647	)		—			(241,647	)		—
Environmental Provision		(30,327	)		—			(30,327	)		—
Total Operating Profit (Loss)		(192,655	)		53,699			42,264			235,162
Interest Income		514			424			1,635			1,184
Interest Expense		(6,730	)		(6,720	)		(26,255	)		(26,841	)
Miscellaneous- Net		(452	)		527			2,810	*		1,424
Income (Loss) Before Income Taxes		(199,323	)		47,930			20,454			210,929
Provision (Benefit) for Income Taxes		(74,518	)		8,690			(6,062	)		56,739
Net income (loss) before allocations to noncontrolling interests		(124,805	)		39,240			26,516			154,190
Less: Noncontrolling interest in subsidiaries’ earnings (losses)		324			(148	)		201			20
Net income (loss) attributable to common shareholders	$	(125,129	)	$	39,388		$	26,315		$	154,170
Share Data:
Earnings (Loss) per Diluted Share	$	(2.16	)	$	0.66		$	0.44		$	2.59
Average Diluted Shares Outstanding		57,903			59,317			59,204			59,562
Average Basic Shares Outstanding		57,903			58,275			58,120			58,601
Supplemental Data:
Cost of Sales	$	425,765		$	385,381		$	1,683,093		$	1,472,602
Asbestos Provision		241,647			—			241,647			—
Environmental Provision		30,327			—			30,327			—
Selling, General & Administrative		126,534			134,926			548,536			510,061
Depreciation and Amortization **		15,735			15,245			62,943			59,841
Stock-Based Compensation Expense		3,840			3,676			14,972			13,326

* 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)

	December 31, 2011		December 31, 2010
ASSETS
Current Assets
Cash and Cash Equivalents	$	245,089	$	272,941
Accounts Receivable, net		349,250		301,918
Current Insurance Receivable - Asbestos		16,345		33,000
Inventories, net		360,689		319,077
Other Current Assets		60,859		61,725
Total Current Assets		1,032,232		988,661
Property, Plant and Equipment, net		284,146		280,746
Long-Term Insurance Receivable - Asbestos		208,952		180,689
Other Assets		497,377		446,316
Goodwill		820,824		810,285
Total Assets	$	2,843,531	$	2,706,697
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	1,112	$	984
Accounts Payable		194,158		157,051
Current Asbestos Liability		100,943		100,000
Accrued Liabilities		226,717		229,462
Income Taxes		10,165		11,057
Total Current Liabilities		533,095		498,554
Long-Term Debt		398,914		398,736
Long-Term Deferred Tax Liability		41,668		48,852
Long-Term Asbestos Liability		792,701		619,666
Other Liabilities		255,097		147,859
Total Equity		822,056		993,030
Total Liabilities and Equity	$	2,843,531	$	2,706,697

CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010
Operating Activities:
Net income (loss) attributable to common shareholders	$	(125,129	)	$	39,388		$	26,315		$	154,170
Noncontrolling interest in subsidiaries’ earnings (losses)		324			(148	)		201			20
Net income (loss) before allocations to noncontrolling interests		(124,805	)		39,240			26,516			154,190
Asbestos provision, net		241,647			—			241,647			—
Environmental provision, net		30,327			—			30,327			—
Gain on divestiture		—			—			(4,258	)		(1,015	)
Depreciation and amortization		15,735			15,245			62,943			59,841
Stock-based compensation expense		3,840			3,676			14,972			13,326
Defined benefit plans and postretirement expense		1,959			5,485			7,362			14,712
Deferred income taxes		(66,574	)		540			(44,835	)		31,453
Cash provided by (used for) operating working capital		34,957			48,105			(41,955	)		(8,262	)
Defined benefit plans and postretirement contributions		(31,059	)*		(3,220	)		(48,113	)*		(43,226	)**
Environmental payments, net of reimbursements		(799	)		(158	)		(9,534	)		(11,063	)
Other		(366	)		(11,601	)		(5,983	)		(9,689	)
Subtotal		104,862			97,312			229,089			200,267
Asbestos related payments, net of insurance recoveries		(20,044	)		(23,079	)		(79,277	)		(66,731	)
Total provided by operating activities		84,818			74,233			149,812			133,536
Investing Activities:
Capital expenditures		(7,034	)		(7,444	)		(34,737	)		(21,033	)
Proceeds from disposition of capital assets		73			190			4,793			375
Payment for acquisition, net of cash acquired		(996	)		(89,294	)		(36,590	)		(140,461	)
Proceeds from divestiture		—			—			1,000			4,615
Total used for investing activities		(7,957	)		(96,548	)		(65,534	)		(156,504	)
Financing Activities:
Dividends paid		(15,035	)		(13,360	)		(56,992	)		(50,371	)
Reacquisition of shares on open market		(30,000	)		(19,999	)		(79,999	)		(49,988	)
Stock options exercised - net of shares reacquired		3,295			6,024			23,232			22,375
Excess tax benefit from stock-based compensation		391			1,470			6,097			3,290
Change in short-term debt		333			(440	)		(1,003	)		(2,739	)
Total used for financing activities		(41,016	)		(26,305	)		(108,665	)		(77,433	)
Effect of exchange rate on cash and cash equivalents		(1,939	)		5,997			(3,465	)		628
Increase (decrease) in cash and cash equivalents		33,906			(42,623	)		(27,852	)		(99,773	)
Cash and cash equivalents at beginning of period		211,183			315,564			272,941			372,714
Cash and cash equivalents at end of period	$	245,089		$	272,941		$	245,089		$	272,941

* Includes a $30 million discretionary pension contribution.

** Includes a $25 million discretionary pension contribution.

CRANE CO.

Order Backlog

(in thousands)

	December 31,			September 30,			June 30,		March 31,		December 31,
	2011			2011			2011		2011		2010
Aerospace & Electronics	$	410,794		$	409,284		$	431,799	$	454,559	$	431,467
Engineered Materials		11,110			9,879			13,087		13,826		11,831
Merchandising Systems		15,212			20,929			26,898		25,008		30,170
Fluid Handling		313,715	*		328,757	*		323,045		305,255		271,825
Controls		27,120			32,145			30,323		24,015		22,354
Total Backlog	$	777,951		$	800,994		$	825,152	$	822,663	$	767,647

* Includes Order Backlog of $7.1 million at December 31, 2011 and $5.4 million at September 30, 2011 pertaining to the 2011 acquisition of WTA.

CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,						Percent Change December 31, 2011			Percent Change December 31, 2011
	2011			2010			2011			2010			Three Months			Twelve Months
INCOME ITEMS
Net Sales	$	631,618		$	574,006		$	2,545,867		$	2,217,825			10.0	%		14.8	%
Operating Profit (Loss)		(192,655	)		53,699			42,264			235,162			-458.8	%		-82.0	%
Percentage of Sales		-30.5	%		9.4	%		1.7	%		10.6	%
Special Items impacting Operating Profit (Loss):
Asbestos Provision - Pre-Tax (a)		241,647			—			241,647			—
Environmental Provision - Pre-Tax (b)		30,327			—			30,327			—
Restructuring Charges - Pre-Tax (c)		—			7,841			—			6,676
Non-deductible Acquisition Transaction Costs (d)		—			1,276			—			1,276
Operating Profit before Special Items	$	79,319		$	62,816		$	314,238		$	243,114			26.3	%		29.3	%
Percentage of Sales		12.6	%		10.9	%		12.3	%		11.0	%
Net Income (Loss) Attributable to Common Shareholders	$	(125,129	)	$	39,388		$	26,315		$	154,170
Per Share	$	(2.16	)	$	0.66		$	0.44		$	2.59			-425.4	%		-82.8	%
Special Items impacting Net Income (Loss) Attributable to Common Shareholders:
Asbestos Provision - Net of Tax (a)		157,071						157,071
Per Share	$	2.71					$	2.65
Environmental Provision - Net of Tax (b)		19,713						19,713
Per Share	$	0.34					$	0.33
Restructuring Charges - Net of Tax (c)					5,293						4,470
Per Share				$	0.09					$	0.08
Non-deductible Acquisition Transaction Costs (d)					1,276						1,276
Per Share				$	0.02					$	0.02
Reversal of Tax Provision on Undistributed Foreign Earnings (e)				($	5,625	)				($	5,625	)
Per Share				$	(0.09	)				$	(0.09	)
Net Income Attributable To Common Shareholders Before Special Items	$	51,654		$	40,332		$	203,098		$	154,291			28.1	%		31.6	%
Per Basic Share	$	0.89		$	0.69		$	3.49		$	2.63
Per Diluted Share	$	0.88		$	0.68		$	3.43		$	2.59			29.2	%		32.4	%

In the three months ended December 31, 2011, Average Shares Outstanding excluding the effect of diluted stock options were used to compute the per share amounts since this period was in a loss position. Had Net Income Attributable To Common Shareholders been reported for this period, Average Shares Outstanding would have included the effect of diluted stock options when computing per share amounts (see chart below).

Average Basic Shares Outstanding	57,903
Effect of Diluted Stock Options	915
Average Shares Outstanding including the effect of Stock Options	58,818

When considering the effect of dilutive stock options on shares outstanding, Net Income Attributable To Common Shareholders Before Special Items is $0.88 per share for the three months ended December 31, 2011.

(a) During the three months ended December 31, 2011, the Company recorded an Asbestos Provision.

(b) During the three months ended December 31, 2011, the Company recorded a charge related to an increase in the Company’s expected liability at its Goodyear, AZ Superfund Site.

(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, 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 December 31,						Twelve Months Ended December 31,
	2011			2010			2011			2010
CASH FLOW ITEMS
Cash Provided by Operating Activities before Asbestos - Related Payments	$	104,862	*	$	97,312		$	229,089	*	$	200,267	**
Asbestos Related Payments, Net of Insurance Recoveries		(20,044	)		(23,079	)		(79,277	)		(66,731	)
Cash Provided by Operating Activities		84,818			74,233			149,812			133,536
Less: Capital Expenditures		(7,034	)		(7,444	)		(34,737	)		(21,033	)
Free Cash Flow	$	77,784		$	66,789		$	115,075		$	112,503

* Includes a $30 million discretionary pension contribution.

** Includes a $25 million discretionary pension contribution.

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.