8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 22, 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	6,902
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (203) 363-7300

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition.

On October 22, 2012, Crane Co. announced its results of operations for the quarter ended September 30, 2012. Copies of the related press release and quarterly financial data supplement are being furnished as Exhibits 99.1 and 99.2 to this Form 8-K.

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

SECTION 8 – OTHER EVENTS

Item 8.01 Other Events

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of September 30, 2012, 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:

	Three Months Ended September 30,				Nine Months Ended September 30,				Year Ended December 31,
	2012		2011		2012		2011		2011
Beginning claims	57,559		56,403		58,658		64,839		64,839
New claims	933		1,088		2,720		2,946		3,748
Settlements	(253	)	(283	)	(800	)	(886	)	(1,117	)
Dismissals	(1,467	)	(849	)	(3,983	)	(10,539	)	(11,059	)
MARDOC claims*	1		2,213		178		2,212		2,247
Ending claims	56,773		58,572		56,773		58,572		58,658

* 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 September 30, 2012, pursuant to an ongoing review process initiated by the Court, 26,575 claims were permanently dismissed, and 3,378 claims remain active (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”). The Company expects that more of the remaining 6,503 maritime actions will be activated, or permanently dismissed, as the Court's review process continues.

Of the 56,773 pending claims as of September 30, 2012, approximately 19,300 claims were pending in New York, approximately 9,900 claims were pending in Texas, approximately 5,500 claims were pending in Mississippi, and approximately 5,400 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 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.

The Company has 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.

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 pursued an appeal in this matter, and on August 2, 2012 the California Court of Appeal reversed the judgment andremanded the matter to the trial court for entry of judgment notwithstanding the verdict in favor of the Company on the ground that this claim could not be distinguished factually from the Patrick O'Neil case decided in the Company's favor by the California Supreme Court. 

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 appealed that ruling to the Supreme Court of California, which dismissed the appeal on February 29, 2012; the matter is now finally determined in the Company's favor.

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 took timely appeals of certain aspects of those judgments.  The Nelson appeal is pending. The Company resolved the Bell appeal by settlement, which is reflected in the settled claims for 2012.

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 filed post-trial motions seeking to overturn the verdict, to grant a new trial, or to reduce the damages, which the Company argued were 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 issued a written decision on August 21, 2012 confirming the jury's liability findings but reducing the award of damages to $8 million.  Plaintiffs have requested the Court to enter a judgment in the amount of $4.9 million against the Company, taking into account settlement offsets and accrued interest under New York law.  The Company has appealed.

On March 9, 2012, a Philadelphia County, Pennsylvania, state court jury found the Company responsible for a 1/8^th share of a $123,000 verdict in the Frank Paasch claim. The Company and plaintiffs filed post-trial motions. On May 31, 2012, on plaintiffs' motion, the Court entered an order dismissing the claim against the Company, with prejudice, and without any payment.

On August 29, 2012, the Company received an adverse verdict in the William Paulus claim in Los Angeles, California. The jury found that the Company was responsible for ten percent (10%) of plaintiffs' damages of $6.9 million; however, based on California court rules regarding allocation of damages, plaintiffs have requested the Court to enter a judgment in the amount of $0.8 million against the Company.  The Company plans to file post-trial motions requesting judgment in the Company's favor notwithstanding the jury's verdict and an appeal if necessary.

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

The gross settlement and defense costs incurred (before insurance recoveries and tax effects) for the Company for the nine -month periods ended September 30, 2012 and 2011 totaled $73.5 million and $82.9 million, respectively. In contrast to the recognition of settlement and defense costs, which reflect the current level of activity in the tort system, cash payments and receipts generally lag the tort system activity by several months or more, and may show some fluctuation from quarter to quarter. Cash payments of settlement amounts are not made until all releases and other required documentation are received by the Company, and reimbursements of both settlement amounts and defense costs by insurers may be uneven due to insurer payment practices, transitions from one insurance layer to the next excess layer and the payment terms of certain reimbursement agreements. The Company's total pre-tax payments for settlement and defense costs, net of funds received from insurers, for the nine-month periods ended September 30, 2012 and 2011 totaled a $60.1 million net payment and $59.2 million net payment, respectively. Detailed below are the comparable amounts for the periods indicated.

(in millions)	Three Months Ended September 30,						Nine Months Ended September 30,						Year Ended December 31,
	2012			2011			2012			2011			2011
Settlement / indemnity costs incurred (1)	$	8.4		$	12.0		$	29.3		$	42.1		$	50.2
Defense costs incurred (1)	15.3			14.7			44.2			40.8			55.3
Total costs incurred	$	23.8		$	26.7		$	73.5		$	82.9		$	105.5
Settlement / indemnity payments	$	9.8		$	20.2		$	27.8		$	41.7		$	55.0
Defense payments	13.9			14.0			41.9			41.4			56.5
Insurance receipts	(2.8		)	(10.6		)	(9.7		)	(23.9		)	(32.2		)
Pre-tax cash payments	$	20.8		$	23.6		$	60.1		$	59.2		$	79.3

(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 September 30, 2012, the Company has resolved (by settlement or dismissal) approximately 89,000 claims, not including the MARDOC claims referred to above. The related settlement cost incurred by the Company and its insurance carriers is approximately $360 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 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.

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 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. As of September 30, 2012, the Company's actual experience during the updated reference period for mesothelioma claims filed and dismissed generally approximated the assumptions in the Company's liability estimate. In addition to this claims experience, the Company considered additional quantitative and qualitative factors such as the nature of the aging of pending claims, significant appellate rulings and legislative developments, and their respective effects on expected future settlement values. Based on this evaluation, the Company determined that no change in the estimate was warranted for the period ended September 30, 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. The liability was $824 million as of September 30, 2012. 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 September 30, 2012 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 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. 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 asset was $216 million as of September 30, 2012.

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. Since December 2011, there have been no developments that have caused the Company to change the estimated 25% rate, although actual insurance reimbursements vary from period to period, and will decline over time, for the reasons cited above.

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 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.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. Financial Statements and Exhibits.

(a)	None
(b)	None
(c)	None
(d)	Exhibits
99.1	Earnings Press Release dated October 22, 2012, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2012

SIGNATURES

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

	CRANE CO.
Dated: October 22, 2012
	By:	/s/ Andrew L. Krawitt
		Andrew L. Krawitt
		Principal Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Earnings Press Release dated October 22, 2012, issued by Crane Co.
99.2	Crane Co. Quarterly Financial Data Supplement for the quarter ended September 30, 2012.

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 RECORD THIRD QUARTER RESULTS

STAMFORD, CONNECTICUT – October 22, 2012 -Crane Co. (NYSE: CR), a diversified manufacturer of highly engineered industrial products, reported that third quarter 2012 earnings per diluted share from continuing operations on a GAAP basis increased 12% to $.97 compared to $.87 in the third quarter of 2011. Third quarter 2012 results include $.02 per share of repositioning costs associated with previously announced actions initiated in the second quarter to improve the profitability of the Company in 2013. Excluding repositioning costs, third quarter 2012 earnings per diluted share from continuing operations increased 14% to $.99 compared to $.87 in the third quarter of 2011. (Please see the attached Non-GAAP Financial Measures table for pre-tax, after-tax and earnings per share amounts of Special Items.)

Third quarter 2012 sales from continuing operations of $646 million were approximately equal to the third quarter of 2011, with a core sales increase of $13 million (2%), offset by unfavorable foreign currency translation of $14 million (-2%).

1

Third quarter 2012 operating profit from continuing operations on a GAAP basis (which includes the $1.4 million of repositioning costs) increased 8% to $86.6 million, compared to $80.3 million in the third quarter of 2011. Excluding repositioning costs, third quarter 2012 operating profit from continuing operations increased 10% to $87.9 million, and operating profit margin increased to 13.6%, compared to 12.4% in the third quarter of 2011. (Please see the attached Non-GAAP Financial Measures table.)

“Crane reported record earnings per share in the third quarter, with strong execution across the organization, and I am particularly pleased with the margin improvement we achieved in our Fluid Handling segment,” said Crane Co. president and chief executive officer Eric C. Fast. “We are on track to complete our previously announced repositioning actions by year end, which will positively impact 2013 earnings. Given our cautious outlook on the global economy, we continue to drive productivity initiatives and a cost conscious culture across the Company.”

Updated 2012 Guidance

Sales from continuing operations for 2012 are expected to increase approximately 4%, or at the low end of the prior sales guidance range of 4-5%. 2012 EPS is expected to be in the lower half of the previously communicated guidance range of $3.75 - $3.85, excluding Special Items. The EPS guidance includes $0.04 associated with the first half profits from discontinued operations, but excludes the gain from the sale of these businesses and repositioning costs. Full year 2012 free cash flow (cash provided by operating activities less capital spending) remains in a range of $150 - $180 million.

2

Cash Flow and Financial Position

Cash provided by operating activities in the third quarter of 2012 was $63.2 million, compared to $49.8 million in the third quarter of 2011. Cash provided by operating activities in the first nine months of 2012 was $79.3 million, compared to $65.0 million in the first nine months of 2011. Free cash flow for the nine months of 2012 was $59.3 million, compared to $37.3 million in the nine months of 2011. (Please see the Condensed Statement of Cash Flows and Non-GAAP table.)

The Company repurchased 499,267 shares of its common stock during the third quarter of 2012 at a cost of $20 million. The Company’s cash position was $281 million at September 30, 2012, as compared to $253 million at June 30, 2012 and $245 million at December 31, 2011.

Repositioning Actions

In the second quarter, the Company initiated repositioning actions primarily directed at improving the profitability of its European businesses. Following a pre-tax charge of $14.7 million recorded in the second quarter, the Company, as planned, incurred pre-tax repositioning costs of $1.4 million, or $0.9 million on an after-tax basis ($0.02 per share) in the third quarter of 2012. In addition to the amounts recorded thus far, the Company expects to incur additional pre-tax repositioning costs in the fourth quarter of 2012 of approximately $4 million, or $0.04 per share, primarily associated with equipment relocation and personnel costs in Fluid Handling. These repositioning actions are expected to be completed by year end. Pre-tax savings associated with all of these repositioning actions are expected to approximate $12 million annually for the Company beginning in 2013, of which $10 million relates to Fluid Handling.

3

Segment Results

All comparisons detailed in this section refer to continuing operations for the third quarter 2012 versus the third quarter 2011.

Aerospace & Electronics

	Third						Change
(dollars in millions)	2012			2011
Sales	$	171.4		$	172.2		$	(0.8	)	—	%
Operating Profit	$	39.8		$	35.6		$	4.2		12	%
Profit Margin	23.2		%	20.7		%

Third quarter 2012 sales were similar to year ago levels, reflecting flat Aerospace Group sales and a slight decline in Electronics Group revenue.Within the Aerospace Group, both OEM and aftermarket sales were approximately equal to the prior year. Segment operating profit of $39.8 million increased by $4.2 million, or 12%, primarily reflecting lower engineering spending, and operating margin improved to 23.2%.

Aerospace & Electronics order backlog was $393 million at September 30, 2012, as compared to $423 million at June 30, 2012 and $411 million at December 31, 2011.

4

Engineered Materials

	Third						Change
(dollars in millions)	2012			2011
Sales	$	57.0		$	53.1		$	3.9	7	%
Operating Profit	$	7.2		$	5.9		$	1.3	22	%
Operating Profit, before Special Items*	$	8.3		$	5.9		$	2.4	41	%
Profit Margin	12.7		%	11.1		%
Profit Margin, before Special Items*	14.7		%	11.1		%
* Repositioning charges primarily associated with the closure of a manufacturing facility.

Segment sales of $57.0 million increased $3.9 million, or 7%, compared to the third quarter of 2011, driven by higher sales to recreational vehicle customers. Operating profit before Special Items increased 41%, primarily reflecting the higher sales and effective cost controls.

As part of its repositioning actions, the Company closed a small manufacturing facility in England. Repositioning costs of $1.1 million on a pre-tax basis were incurred in the third quarter of 2012.

Merchandising Systems

	Third						Change
(dollars in millions)	2012			2011
Sales	$	92.5		$	98.8		$	(6.3	)	(6	)%
Operating Profit	$	9.5		$	10.8		$	(1.3	)	(12	)%
Profit Margin	10.3		%	11.0		%

Merchandising Systems sales of $92.5 million decreased $6.3 million, or 6%, reflecting lower sales in Vending and, to a lesser extent, Payment Solutions. Operating profit decreased $1.3 million, reflecting deleverage of the lower sales.

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Fluid Handling

	Third						Change
(dollars in millions)	2012			2011
Sales	$	303.1		$	299.1		$	4.0	1	%
Operating Profit	$	42.9		$	39.9		$	3.0	8	%
Operating Profit, before Special Items*	$	43.1		$	39.9		$	3.2	8	%
Profit Margin	14.2		%	13.3		%
Profit Margin, before Special Items*	14.2		%	13.3		%
* Repositioning charges primarily associated with transferring production to lower cost Company facilities.

Third quarter 2012 sales increased $4 million, or 1%, including a core sales increase of $15 million (5%), partially offset by unfavorable foreign currency translation of $11 million (-4%). Before Special Items, operating profit increased to $43.1 million and operating margin increased from 13.3% to 14.2%, reflecting better project execution, price increases, and improved productivity. Backlog was $331 million at September 30, 2012, compared to $335 million at June 30, 2012 and $314 million at December 31, 2011.

The Company’s repositioning actions are primarily focused on its European Fluid Handling operations, to reduce costs through headcount reductions and process improvements, principally at its Krombach operations in Kreuztal, Germany. In addition, as part of a continuing cost reduction strategy, certain manufacturing operations are being transferred from facilities in Germany to Company facilities in lower cost regions. Repositioning costs of $0.2 million on a pre-tax basis were recorded in the third quarter of 2012.

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Controls

	Third						Change
(dollars in millions)	2012			2011
Sales	$	22.1		$	23.8		$	(1.8	)	(7	)%
Operating Profit	$	2.8		$	3.8		$	(0.9	)	(25	)%
Profit Margin	12.9		%	15.9		%

Third quarter 2012 sales from continuing operations of $22.1 million decreased 7%. Operating profit decreased 25%, reflecting deleverage of the lower sales volume.

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 third quarter financial results on Tuesday, October 23, 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.

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

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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, 2011 and subsequent reports filed with the Securities and Exchange Commission.

(Financial Tables Follow)

2012 – 20

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EX-99.2

Exhibit 99.2

CRANE CO.

Income Statement Data

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012				2011
Net Sales:
Aerospace & Electronics	$	178,591		$	172,216		$	525,127			$	505,690
Engineered Materials	54,487			53,101			169,603				175,034
Merchandising Systems	97,577			98,815			277,741				287,703
Fluid Handling	302,318			299,118			903,617				845,929
Controls	24,713			23,838			73,192				66,209
Total Net Sales	$	657,686		$	647,088		$	1,949,280			$	1,880,565
Operating Profit (Loss) from Continuing Operations:
Aerospace & Electronics	$	39,833		$	35,640		$	116,834			$	106,839
Engineered Materials	7,226			5,919			21,178				25,192
Merchandising Systems	9,496			10,845			23,324				22,632
Fluid Handling	42,892			39,870			108,920				111,474
Controls	2,844			3,789			10,513				8,892
Corporate	(15,707		)	(15,773		)	(46,511		)		(44,453		)
Total Operating Profit from Continuing Operations	86,584			80,290			234,258				230,576
Interest Income	443			442			1,292				1,121
Interest Expense	(6,618		)	(6,474		)	(20,114		)		(19,525		)
Miscellaneous- Net	(6		)	(73		)	(704		)		3262*
Income from Continuing Operations Before Income Taxes	80,403			74,185			214,732				215,434
Provision for Income Taxes	23,997			22,966			64,515				66,936
Income from Continuing Operations	56,406			51,219			150,217				148,498
Profit from Discontinued Operations attributable to common shareholders (a)	—			1,826			3,777			3,777	4,343
Gain from Sales of Discontinued Operations attributable to common shareholders (b)	1,385			—			29,445			29,445	—
Profit from Discontinued Operations attributable to common shareholders, net of tax (a)	—			1,187			2,456				2,823
Gain from Sales of Discontinued Operations attributable to common shareholders, net of tax (b)	900			—			19,176				—
Gain / Profit from Discontinued Operations, net of tax	900			1,187			21,632				2,823
Net income before allocation to noncontrolling interests	57,307			52,406			171,850				151,321
Less: Noncontrolling interest in subsidiaries' earnings	182			(134		)	501				(123		)

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Net income attributable to common shareholders	$	57,125	$	52,540	$	171,349	$	151,444
Share Data:
Earnings per share from Continuing Operations	$	0.97	$	0.87	$	2.56	$	2.50
Earnings per share from Discontinued Operations	0.02		0.02		0.37		0.05
Earnings per Diluted Share	$	0.99	$	0.89	$	2.93	$	2.55
Average Diluted Shares Outstanding	57,873		59,058		58,435		59,330
Average Basic Shares Outstanding	57,123		58,048		57,565		58,202
Supplemental Data:
Cost of Sales	$	424,954	$	428,524	$	1,290,671	$	1,235,288
Selling, General & Administrative	133,089		138,274		408,250		414,701
Repositioning Charges	1,354		—		16,101		—
Depreciation and Amortization **	13,174		15,581		43,122		47,208
Stock-Based Compensation Expense	4,402		3,858		12,860		11,132

* 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.

(a) Amounts represent the operating profit, and after-tax profit, from the Houston Service Center and Azonix Corporation businesses divested in June 2012.

(b) Amounts represent the pre-tax and after-tax gains from the June 2012 sales of both the Houston Service Center and the Azonix Corporation.

2

CRANE CO.

Condensed Balance Sheets

(in thousands)

	September 30, 2012		December 31, 2011
ASSETS
Current Assets
Cash and Cash Equivalents	$	280,536	$	245,089
Accounts Receivable, net	403,688		349,250
Current Insurance Receivable - Asbestos	16,345		16,345
Inventories, net	366,845		360,689
Other Current Assets	65,063		60,859
Total Current Assets	1,132,477		1,032,232
Property, Plant and Equipment, net	271,384		284,146
Long-Term Insurance Receivable - Asbestos	199,264		208,952
Other Assets	456,934		497,377
Goodwill	812,453		820,824
Total Assets	$	2,872,512	$	2,843,531
LIABILITIES AND EQUITY
Current Liabilities
Notes Payable and Current Maturities of Long-Term Debt	$	1,114	$	1,112
Accounts Payable	173,328		194,158
Current Asbestos Liability	100,943		100,943
Accrued Liabilities	217,261		226,717
Income Taxes	28,618		10,165
Total Current Liabilities	521,264		533,095
Long-Term Debt	399,048		398,914
Long-Term Deferred Tax Liability	42,545		41,668
Long-Term Asbestos Liability	722,962		792,701
Other Liabilities	253,941		255,097
Total Equity	932,752		822,056
Total Liabilities and Equity	$	2,872,512	$	2,843,531

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CRANE CO.

Condensed Statements of Cash Flows

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Operating Activities:
Net income attributable to common shareholders	$	57,125		$	52,540		$	171,349		$	151,444
Noncontrolling interest in subsidiaries’ earnings	182			(134		)	501			(123		)
Net income before allocations to noncontrolling interests	57,307			52,406			171,850			151,321
Gain on divestiture	(1,385		)	—			(29,445		)	(4,258		)
Restructuring - Non Cash	16			—			2,777			—
Depreciation and amortization	13,174			15,581			43,122			47,208
Stock-based compensation expense	4,402			3,858			12,860			11,132
Defined benefit plans and postretirement expense	4,796			1,811			14,769			5,403
Deferred income taxes	8,674			8,219			24,417			21,739
Cash provided by (used for) operating working capital	11,292			8,479			(79,322		)	(76,912		)
Defined benefit plans and postretirement contributions	(1,642		)	(6,696		)	(4,463		)	(17,054		)
Environmental payments, net of reimbursements	(3,953		)	(2,601		)	(11,256		)	(8,735		)
Other	(8,696		)	(7,654		)	(6,005		)	(5,617		)
Subtotal	83,985			73,403			139,304			124,227
Asbestos related payments, net of insurance recoveries	(20,834		)	(23,612		)	(60,051		)	(59,233		)
Total provided by operating activities	63,151			49,791			79,253			64,994
Investing Activities:
Capital expenditures	(6,164		)	(9,421		)	(19,944		)	(27,703		)
Proceeds from disposition of capital assets	396			190			2,254			4,720
Payment for acquisition, net of cash acquired	—			(35,594		)	—			(35,594		)
Proceeds from divestiture	934			—			53,599			1,000
Total used for investing activities	(4,834		)	(44,825		)	35,909			(57,577		)
Financing Activities:
Dividends paid	(15,923		)	(15,098		)	(45,998		)	(41,957		)
Reacquisition of shares on open market	(20,000		)	—			(49,991		)	(49,999		)
Stock options exercised - net of shares reacquired	—			2,913			8,426			19,937
Excess tax benefit from stock-based compensation	(45		)	347			3,233			5,706
Change in short-term debt	—			(806		)	—			(1,336		)
Total used for financing activities	(35,968		)	(12,644		)	(84,330		)	(67,649		)
Effect of exchange rate on cash and cash equivalents	5,888			(12,504		)	4,615			(1,526		)
Increase (decrease) in cash and cash equivalents	28,237			(20,182		)	35,447			(61,758		)
Cash and cash equivalents at beginning of period	252,299			231,365			245,089			272,941
Cash and cash equivalents at end of period	$	280,536		$	211,183		$	280,536		$	211,183

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CRANE CO.

Order Backlog

(in thousands)

	September 30, 2012		June 30, 2012		March 31, 2012		December 31, 2011		September 30, 2011
Aerospace & Electronics	423,282		437,822		410,794		409,284		431,799
Engineered Materials	13,884		11,129		11,110		9,879		13,087
Merchandising Systems	23,587		30,033		15,212		20,929		26,898
Fluid Handling	334,696	*	337,538	*	313,715	*	328,757	*	323,045
Controls	16,187		29,770	**	27,120	**	32,145	**	3,023	**
Total Backlog	811,636		846,292		777,951		800,994		825,152

* Includes Order Backlog of $2.9 million at March 31, 2012, $1.9 million at December 31, 2011 and September 30, 2011 pertaining to a business divested in June 2012.

** Includes Order Backlog of $11.3 million at March 31, 2012, $9.6 million at December 31, 2011 and $11.8 million at September 30, 2011 pertaining to a business divested in June 2012.

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CRANE CO.

Non-GAAP Financial Measures

(in thousands)

	Three Months Ended September 30,							Nine Months Ended Semptember 30,						Percent Change June 30, 2012		Percent Change June 30, 2012
	2012			2011				2012			2011			Three Months		Six Months
INCOME ITEMS
Net Sales	$	645,981		$	647,088			$	1,949,280		$	1,880,565		(0.2	)%	3.7	%
Operating Profit from Continuing Operations	69,377			78,851				147,674			150,287			(12.0	)%	(1.7	)%
Percentage of Sales	10.5		%	12.5		%		11.3		%	12.2		%
Special Items impacting Operating Profit from Continuing Operations:
Repositioning Charges (a)	1,354							16,101
Operating Profit from Continuing Operations before Special Items	$	87,938		$	80,290			$	250,359		$	230,576		9.5	%	8.6	%
Percentage of Sales	13.6		%	12.4		%		12.8		%	12.3		%
Net Income Attributable to Common Shareholders	$	57,125		$	52,540			$	171,349		$	151,444
Per Share	$	0.99		$	0.89			$	2.93		$	2.55		11.0	%	14.9	%
Special Items impacting Net Income Attributable to Common Shareholders:
Repositioning Charges - Net of Tax (a)	948							12,828
Per Share	$	0.02						$	0.22
Gain on Divestitures - Net of Tax (b)	(900		)					(19,176		)
Per Share	$	(0.02	)					$	(0.33	)
Net Income Attributable To Common Shareholders Before Special Items	$	57,173		$	52,540			$	165,001		$	151,444		8.8	%	9.0	%
Per Basic Share	$	1.00		$	0.91			$	2.87		$	2.60
Per Diluted Share	$	0.99		$	0.89		(c)	$	2.82		$	2.55		11.0	%	10.6	%

(a) The Company incurred repositioning charges in the second quarter and third quarter of 2012, associated with productivity actions. The charges included severance and impairment costs related to the shutdown of certain facilities, the transfer of certain manufacturing operations, and staff reduction actions.

(b) In June 2012, the Company divested of a business within the Fluid Handling segment (Houston Service Center) and a business within the Controls segment (Azonix Corporation). The associated gains were included in the “Gain from Sale of Discontinued Operations attributable to common shareholders, net of tax" section on the accompanying Income Statement Data. In September 2012, the Company recorded a favorable price adjustment associated with the Azonix Corporation divestiture.

(c) For the three months ended September 30, 2011, the $0.89 of earnings per diluted share included $0.87 of earnings per diluted share from continuing operations and $0.02 of earnings per diluted share from discontinued operations. Therefore, the $0.99 of earnings per diluted shares before Special Items for the three months ended September 30, 2012 represents a 14% increase when compared to the $0.87 of earnings per diluted share from continuing operations for the three months ended September 30, 2011.

6

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
CASH FLOW ITEMS
Cash Provided from Operating Activities
before Asbestos - Related Payments	$	83,985		$	73,403		$	139,304		$	124,227
Asbestos Related Payments, Net of Insurance Recoveries	(20,834		)	(23,612		)	(60,051		)	(59,233		)
Cash Provided from Operating Activities	63,151			49,791			79,253			64,994
Less: Capital Expenditures	(6,164		)	(9,421		)	(19,944		)	(27,703		)
Free Cash Flow	$	56,987		$	40,370		$	59,309		$	37,291

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.

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