FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.D.C. 20549

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
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2004
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

Commission file number 1-1657
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CRANE CO.
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(Exact
(Exact name of registrant as specified in its charter)

Delaware 13-1952290
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No)

100 First Stamford Place, Stamford, CT 06902
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(Address of principal executive offices) (Zip Code)

Registrant's
Delaware 13-1952290
(State or other jurisdiction of
incorporation or organization) (I.R.S. 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
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
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Common Stock, par value $1.00 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange

Title of each class
Name of each exchange on which registered
Common Stock, par value $1.00 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:

8 1/2% senior notes due March 2004
6 3/4% senior notes
6¾% Senior Notes due October 2006
(Title
5½% Senior Notes due September 2013
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes Xx No
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¨
Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant'sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( )

¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yesx No¨
Based on the average stocklast sale price of $19.41$31.22 on January 31, 2000June 30, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting stockcommon equity held by nonaffiliates of the registrant was $962,788,784.

$1,438,515,979.
The number of shares outstanding of the registrant'sregistrant’s common stock, $1.00 par value was 61,974,29159,551,874 at January 31, 2000.

February 28, 2005.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------

Portions of the annual report to shareholders for the year ended December 31, 19992004 and portions of the proxy statement for the annual shareholdersshareholders’ meeting to be held on April 10, 200025, 2005 are incorporated by reference into Parts I, II, III and IV of this Form10-K Annual Report.
Form 10-K.
PART I

Item 1. Business
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Item 1. Business
Crane Co. ("Crane"(“Crane” or the "Company"“Company”) is a diversified manufacturer of engineered industrial products. Founded in 1855, Cranethe Company employs over 9,00010,500 people in North America, South America, Europe, Asia and Australia.
STRATEGY
The company'sCompany’s strategy is to grow the earnings of niche businesses with high market share, acquire companies that offer strategic fits with existing businesses, aggressively pursue operational and strategic linkages among our businesses, build an aggressive and committed management team whose interests are directly aligned towith those of the shareholders,shareholders’ and maintain a focused, efficient corporate structure. Crane has built a stronger company using established operating themes of leveraging intellectual capital, improving customer focus, striving for operational excellence and strategically linking existing businesses with acquisitions.
ACQUISITIONS
In the past five years, the companyCompany has completed 1421 acquisitions.
During 2004, the Company completed two acquisitions at a total cost of $50 million. Goodwill for the 2004 acquisitions amounted to approximately $37 million. In October 1999,January 2004, the companyCompany acquired Stentorfield,P. L. Porter Co. (“Porter”) for a purchase price of $44 million. Porter is a leading manufacturer of motion control products for airline seating and is located in Woodland Hills, California. Porter holds leading positions in both electromechanical actuation and hydraulic/mechanical actuation for aircraft seating, selling directly to seat manufacturers and to the airlines. Electrically powered seat actuation systems provide power and control features required by premium class passengers on competitive international routes. Porter’s 2003 annual sales were approximately $32 million. The operations were integrated into the Company’s Aerospace & Electronics Segment. Also in January 2004, the Company acquired the Hattersley valve brand and business together with certain related intellectual property and assets from Hattersley Newman Hender, Ltd., based in Chippenham,
England,a subsidiary of Tomkins plc, for $33a purchase price of $6 million. Stentorfield is a premier designerHattersley branded products include an array of valves for commercial, industrial and manufacturer of
hot and cold beverage vending machines, serving the U.K. and European market
with a broad line of full size and tabletop products, for the hotel, restaurant,
office coffee service and vending industries. Stentorfield is known in the
industry to provide high quality, reliable and easily serviced products and
excellent customer service.institutional construction projects. This business washas been integrated with Crane's National
Vendors business,into Crane Ltd., which is part of the leading North American designer and manufacturer
of full line vending machines, for snack, food and beverage. The acquisition
providesFluid Handling Segment.
During 2003, the means for National Vendors to satisfy the growing U.K. and European
demand for a broader "one-stop" product offering, consisting of Stentorfield's
drinks machines and National Vendors' snack and food machines.

During 1998 the companyCompany completed four acquisitions at a total cost of $178$168.8 million. In May 2003, the companyCompany acquired EnvironmentalSignal Technology Corporation (“STC”) for a total purchase price of approximately $138 million (net of STC cash acquired). STC, with 2002 annual sales of approximately $87 million, is a leading manufacturer of highly engineered state-of-the-art power management products and electronic radio frequency (“RF”) and microwave frequency components and subsystems for the defense, space and military communications markets. STC supplies many U.S. Department of Defense prime contractors and foreign allied defense organizations with products designed into systems for missile, radar, aircraft, electronic warfare, intelligence and communication applications. The operations were integrated with the Company’s Aerospace & Electronics Segment. In June 2003, the Company purchased certain pipe coupling and fittings businesses from Etex Group S.A. (“Etex”), for a purchase price of approximately $29 million. The 2002 annual sales for these Etex businesses were approximately $60 million. These businesses provide pipe jointing and repair solutions to the water, gas and industrial markets worldwide. Products USA, Inc. This
business manufactures membrane-basedinclude grooved pipe systems, pipeline couplings and transition fittings and pipeline equipment. The businesses were integrated into the Company’s subsidiary, Crane Ltd., a leading provider of pipe fittings, valves and related products to the building services, heating, ventilating and air conditioning (“HVAC”) and industrial markets in the United Kingdom and Europe. The Company also acquired two other entities in 2003 at a total purchase price of $1.7 million. Goodwill for the 2003 acquisitions amounted to $118 million.
During 2002, the Company completed seven acquisitions at a total cost of $82.2 million. Goodwill for these acquisitions amounted to $56 million. In January 2002, the Company acquired the patents and other intellectual property of Trinity Airweighs, obtaining a system to measure aircraft weight and center of gravity.
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PART I
Item 1. Business (continued)
Also in January 2002, the Company acquired Kavey Water Products which enhanced Crane Environmental’s capability to provide water treatment systems for industrial,
commercial and institutional markets.systems. In August,May 2002, the companyCompany acquired Sequentia
Holdings,the Lasco Composites business from Tomkins Industries, Inc., Lasco Composites is a manufacturer of fiberglass-reinforcedfiberglass reinforced plastic (FRP) panels forthat further expands the construction andCompany’s Kemlite business in the transportation, building products markets. Sequentia complementsand recreational vehicle markets and provided an entry into the company's
Kemlite subsidiary,industrial market. In July 2002, the Company acquired Corva Corporation, a privately held distributor of valves and actuators. In November 2002, the Company acquired all of the outstanding shares of General Technology Corporation (“GTC”) from an employee stock ownership plan trust for a purchase price of $25 million in cash and assumed debt. GTC provides high-reliability, customized-contract manufacturing services and products focused on military and defense applications. GTC has been integrated with the Electronics Group in the Company’s Aerospace & Electronics Segment. Also in November 2002, the Company acquired Qualis Incorporated, a privately held provider of polyester film embossing services, which provides fiberglass-reinforced plastic panelshas been integrated into Kemlite. In November 2002, the Company entered into a joint venture in China furthering its low-cost pump manufacturing capabilities.
During 2001, the Company completed six acquisitions at a total cost of $191 million. Goodwill for these acquisitions amounted to $68 million. In February 2001, the Company acquired Ventech Controls, Inc., a valve repair business providing both shop repair and remanufacture of control valves and instruments. Also in February 2001, the Company acquired the fiberglass reinforced panel business of UK-based Laminated Profiles Ltd. as part of its strategic initiative to penetrate the European transportation and recreational vehicle markets. In September,April 2001, the companyCompany acquired Libertythe Industrial Flow Group of Alfa Laval Holding AB (renamed Crane Process Flow Technologies) which includes the Saunders brand of diaphragm valves manufactured in the UK and India and the DEPA brand of air operated diaphragm pumps manufactured in Germany. Crane Process Flow Technologies Inc. which develops, manufactures, marketsfocuses on the development, production and sells valve, motor, engine and compressor condition monitoring productsdistribution of valves, pumps and related services tocomponents in high value-added applications. In June 2001, the nuclear power generation and industrial process markets
worldwide. Liberty complementsCompany acquired the company's nuclearXomox valve business which
providesfrom Emerson Electric Co. for $145 million. Xomox supplies high-end, application-driven, sleeved-plug valves, valve diagnostic equipmentlined valves, high performance butterfly valves and related services to the nuclear
power industry, and its Dynalco Controls business, which provides sensors,
instrumentation, control products and automation systems for use in industrial
engine applications. Also in September, the company acquired the Plastic-Lined
Piping Products ("PLPP") division of The Dow Chemical Company. PLPP was
integrated with the company's Resistoflex division, which supplies lined pipe
and valvesactuators to the chemical, pharmaceutical and other process industries. During the third quarter of 2001, the Company acquired the aerospace hose product line of Teleflex Fluid Systems and industrial markets.

Resistoflex GmbH. Aerohose, based in Florida, is a leading supplier of Teflon^®-braided, high- pressure hose assemblies utilized in both commercial and military aircraft as well as ground support systems. Resistoflex GmbH, based in Germany, is a leading manufacturer of Teflon^®-lined, steel-piping products serving chemical and pharmaceutical markets in Europe.
During 1997,2000, the companyCompany completed fourtwo acquisitions at a total cost of $70
million, including assumed debt.$12 million. Goodwill for these two acquisitions amounted to $9 million. In March 2000, the companyCompany acquired the
transportation productsStreamware Corporation, a privately-held provider of business of Sequentia, Incorporated. This business,
which produces fiberglass-reinforced plastic panelsmanagement software and market analysis tools for the truck body, trailer
and container market, has been integrated with the company's Kemlite subsidiary.
Also in March, the company acquired Polyvend Inc., a manufacturer of snackvending and food vending machines. Polyvend was completely integrated into Crane's National
Vendors division significantly expanding its sales distribution channels. In
April, the company acquired the Nuclear Valve Business of ITI MOVATS from
Westinghouse. MOVATS is a leading supplier of valve diagnostic equipment and
valve services to the commercial nuclear powerservice industry. In December 2000, the companyCompany acquired certain operationsthe assets of the Valve Repair Division of Groth Corporation. With service centers located in Texas, the Valve Repair Division provides both shop and product linesfield testing and repair services for a broad range of Stockham Valves & Fittings,
Inc. The acquired product linesvalve types and related manufacturing operations have been
integrated into the company's engineeredis an authorized repair facility for many leading valve business and its commercial
bronze and iron valve business.

PART I

Item 1. Business (continued)
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During 1996, the company acquired two companies. In mid-October, the
company acquired Interpoint Corporation in a tax-free merger in which the
company issued 1,094,312 shares of Crane common stock and assumed $26 million in
debt. Interpoint is a leader in the design and manufacture of standard and
custom miniature DC-to-DC power converters with applications in aerospace and
medical technology industries. In late October the company acquired Grenson
Electronics Ltd. of Daventry, England. Grenson Electronics produces low voltage
power conversion electronics for aerospace, defense and industrial markets.

During 1995, the company completed three acquisitions at a total cost of
$9.4 million. In February the company, through its Barksdale Control Products
GmbH subsidiary, acquired Unimess GmbH, a German-based manufacturer of solid
state pressure switches and transducers, level switches and indicating systems,
and flow measurement and control components for specialized instrumentation. In
the fourth quarter, the company, through its Crane Pumps & Systems subsidiary,
acquired Process Systems, Inc. based in Michigan. Process Systems is a
manufacturer of vertical turbine pumps and accessories for industrial
applications. In November 1995, the company acquired Kessel PTE Ltd., a
fluoropolymer plastic lined pipe manufacturer with facilities in Singapore and
Thailand.

manufacturers.
DIVESTITURES
In the past five years, the companyCompany has divested sixseven businesses.
In April
1999,December 2004, the companyCompany sold Southwest Foundry,the Victaulic trademark and UK-based business assets for $15.3 million in an all cash transaction. The Company realized an after-tax gain of $6.5 million, or $.11 per share, on the sale. The Victaulic trademark and business assets were acquired as partin connection with the acquisition of certain valve and fittings product lines from Etex S.A. in June 2003. In March 2003, the Stockham
Valves and Fittings,Company sold the assets of its Chempump unit to Teikoku USA, Inc. transaction,Chempump manufactures canned motor pumps primarily for $.4use in the chemical processing industry. In September 2002, the Company sold its CorTec unit for approximately $3 million. In December 1999,September 2001, the Company sold Powers Process Controls for its carrying value. In October 2001, the Company sold the Crane Plumbing business in Canada recording an after-tax loss of approximately $8.5 million. Proceeds from the sale of these businesses in 2001 were approximately $20 million. During the
3
PART I
Item 1. Business (continued)
third quarter of 2001, the Company and Emerson Electric Co. announced the formation of a joint venture involving Emerson’s Commercial Cam unit and Crane’s Ferguson business unit. Crane and Emerson contributed their respective operations into a new company, Industrial Motion Control Holdings, LLC. Crane also contributed $12 million of cash into the venture. The Industrial Motion Control Holdings, LLC joint venture is being accounted for on the equity basis and the investment amounted to $27 million at year-end 2004 and is included in other assets in the consolidated balance sheet. In May 2000, the Company sold its Crane Defense Systems businessinterest in Powec AS, a Norwegian manufacturer of power supplies for $6.4 million in cash and a
$.8 million note.the telecommunications industry. In 1998,addition, the company sold two foundry operations acquired as
part of the Stockham Valves and Fittings Inc. transaction. Accu-Cast, Inc. in
Chattanooga, TN and the Aliceville Foundry in Aliceville, AL were sold for a
total of $4.3 million. In 1997, the companyCompany’s wholly-owned ELDEC Corporation subsidiary sold its Valve Systems and Controls
division for $7.5 million in cash and $1.5 million in preferred stock. In March
of 1996, the company sold Empire Foundry.

DISCONTINUED OPERATIONS

On December 6, 1999, the company's Board of Directors approved the spin-off of
its Huttig Building Products ("Huttig") subsidiary effective December 16, 1999,
to shareholders of record as of December 8, 1999. Huttig common shares were
distributed on a basis of one share of Huttig for every 4.5 shares of Crane Co.
common stock. Priorrelated telecommunications power supply product line to the spin-off, Huttig repaid an intercompany loansame purchaser. Total consideration for both transactions was $45.6 million.
FINANCING
In September 2003, the Company sold $200 million of $68
million to the company, which the company used to pay down debt. The Wholesale
segment was discontinued when Huttig was spun off.

LONG-TERM FINANCING5.50% notes that will mature on September 15, 2013. In September 1998, the companyCompany sold $100,000,000$100 million of 6 3/4%6.75% notes that will mature on October 1, 2006. During April 1992 the company sold $100,000,000 8
1/2% notes that will mature on March 15, 2004.

BUSINESS SEGMENTS
See pages 27 and 28page 60 of the Annual Report to Shareholders for the year ended December 31, 19992004, for sales, operating profit and assets employed ofby each business segment.

PART I

Item 1. Business (continued)
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ENGINEERED MATERIALS

AEROSPACE & ELECTRONICS
The Engineered Materials segment consists of five businesses: Kemlite,
CorTec, Resistoflex, PolyflonAerospace & Electronics Segment has two business groups: Aerospace and Crane Plumbing.

Kemlite manufactures fiberglass-reinforced plastic panels for use
principally by the transportation industry in refrigeration and dry van truck
trailers and recreational vehicles. KemliteElectronics. The Aerospace Group products are also sold tocurrently manufactured under the commercial construction industry for food processing, fast food restaurant and
supermarket applications, to institutions where fire rated materials with low
smoke generation and minimum toxicity are required and to residential
construction. Kemlite sells its products directly to the truck trailer and
recreational vehicle manufacturers. Sequentia manufactures fiberglass-reinforced
plastic panels for the construction and building products markets. Kemlite uses
distributors to serve its commercial construction market and some segments of
the recreational vehicle market. Sequentia's Grand Junction, Tennessee and
Houston, Texas plants were added to Kemlite's plants in Joliet, Illinois and
Jonesboro, Arkansas.

CorTec manufactures fiberglass-reinforced laminated panels serving the
truck and truck trailer segment of the transportation industry. CorTec markets
its products directly to the truck and truck trailer manufacturers.

Resistoflex is engaged in the design, manufacture and sale of corrosion-
resistant, plastic-lined steel pipes, fittings, tanks, valves, expansion joints
and hose used primarily by the pharmaceutical, chemical processing, pulp and
paper, ultra pure water and waste management industries. It also manufactures
high-performance, separable fittings for operating pressures to 8,000 PSI used
primarily in the aerospace industry. Resistoflex sells its industrial products
through distributors who provide stocking and fabrication services to industrial
users in the United States. Its aerospace products are sold directly to the
aerospace industry. Resistoflex also manufactures plastic-lined pipe products at
its Singapore plant serving the Asian chemical processing and the Asian
pharmaceutical industries.

Polyflon manufactures microwave laminates, high voltage RF capacitors,
radomes and circuit processing for the wireless communication, magnetic
resonance imaging, microwave and radar system manufacturers.

Crane Plumbing manufactures plumbing fixtures in Canada. Its products are
sold through distributors in Canada and it has a large share of the Canadian
plumbing fixtures market.

This group had assets of $250.0 million at December 31, 1999 and employed
1,700 people. Order backlog at year-end 1999 was $24.7 million.

PART I (continued)

Item 1. Business (continued)
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MERCHANDISING SYSTEMS

The Merchandising Systems segment has two operating units: National
Vendors, the industry leader in the design and manufacture of a complete line of
vending merchandisers for the food/service vending market; and NRI, which
manufactures electronic coin validators in Buxtehude, Germany for the automated
merchandising and gambling/amusement markets in Europe. National Vendors
products include electronic vending merchandisers for refrigerated and frozen
foods, hot and cold beverages, snack foods, single cup individually brewed hot
drinks and combination vendors/merchandisers, designed to vend both snack foods
and hot/cold drinks, or snacks and refrigerated/frozen foods in one machine.
National Vendors manufactures its products in a 463,000 sq. ft. state of the art
facility in Bridgeton, Missouri. National Vendors' products are marketed to
customers in the United States and Europe by company sales and marketing
personnel as well as distributors, and in other international markets through
independent distributors. In October 1999, the company acquired Stentorfield,
Ltd., based in Chippenham, England. Stentorfield is a premier designer and
manufacturer of hot and cold beverage vending machines, serving the U.K. and
European market with a broad line of full size and tabletop products, for the
hotel, restaurant, office coffee service and vending industries. Stentorfield is
known in the industry to provide high quality, reliable and easily serviced
products and excellent customer service. This business was integrated with
Crane's National Vendors business, which is the leading North American designer
and manufacturer of full line vending machines, for snack, food and beverage.
The acquisition provides the means for National Vendors to satisfy the growing
U.K. and European demand for a broader "one-stop" product offering, consisting
of Stentorfield's drinks machines and National Vendors' snack and food machines.

Merchandising Systems employs 1,350 people and had assets of $150.2 million
at year-end 1999. Order backlog totaled $18.3 million at December 31, 1999.

AEROSPACE

The Aerospace segment consists of ELDEC,brand names Eldec, Hydro-Aire, Lear Romec, P.L. Porter and Interpoint.

ELDECResistoflex-Aerospace. The Aerospace Group’s products are organized into the following solution sets: Landing Systems Solutions, Sensing and Controls Solutions, Fluid Management Solutions, Aircraft Electrical Power Solutions, and Cabin Solutions. The Electronics Group products are currently manufactured under the brand names Interpoint, General Technology, STC Microwave Systems, Keltec, Olektron, Eldec and Advanced Integrated Systems Division (“AISD”). The Electronic Group’s products are organized into the following solution sets: Power Solutions, Microwave Systems Solutions, Electronic Manufacturing Solution and Microelectronics Solutions/AISD.
Eldec designs, manufactures and markets custom position indication and control systems, proximity sensors, pressure sensors, true mass fuel flowmeters and power conversion systems for the commercial transport, business, regional, general aviation, military, repair and military aerospace
industries,overhaul and military marine and telecommunicationselectronics markets. These products are custom designed for specific aircraft to meet technically demanding requirements of the aerospace and telecommunication industry. ELDECEldec has two
international facilities one in Washington, England and one in France.

ELDEC also has a 45% equity investment in Powec A/S, a Norwegian
manufacturer of power conditioning products and systems for the commercial
wireless telecommunications market, whose products are complementary to the
products and complex power systems engineering capabilities at ELDEC.

Hydro-Aire designs, manufactures and sells aircraft brake control and anti-
skidanti-skid systems, including electro-hydraulic servo valves and manifolds, embedded software and rugged electronic controls, hydraulic control valves, landing gear sensors and fuel pumps as original equipment forto the commercial transport, business, and commuter, military, government andregional, general aviation, military and government aerospace, repair and overhaul markets. In addition, Hydro-Aire designs and manufactures systems similar to those above for the retrofit of aircraft with improved systems and manufactures replacement parts for systems installed as original equipment by the aircraft manufacturer.manufacturers. All of these products are largely proprietary to Hydro-Aire and, to some extent, are custom designed to the requirements and specifications of the aircraft manufacturer or program contractor. These systems and replacement parts are sold directly to aircraft manufacturers, airlines, governments, and aircraft maintenance and overhaul companies. 5

PART I (continued)

Item 1. Business (continued)
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Lear Romec designs, manufactures and sells lubrication and fuel pumps for aircraft aircraft engines and radar cooling systems for the commercial and military aerospace industries. Lear Romec has a leading share of the non-
captive market for turbine engine lube and scavenge oil pumps. Lear Romec also manufactures fuel boost and transfer pumps for commuter and business aircraft. Hydro-Aire has facilities in California and Kansas while Lear Romec has a facility in Ohio.
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PART I
Item 1. Business (continued)
Porter is a leading manufacturer of motion control products for airline seating and is located in Woodland Hills, California. Porter holds leading positions in both electromechanical actuation and hydraulic/mechanical actuation for aircraft seating, selling directly to seat manufacturers and to the airlines. The Porter facility is scheduled to be consolidated into the Hydro-Aire Burbank, California facility in 2005.
Resistoflex-Aerospace manufactures high-performance, separable fittings for operating pressures up to 8,000 pounds per square inch used primarily in the aerospace industry. Its products are sold directly to the aerospace industry. Resistoflex-Aerospace has a facility in Florida.
Interpoint designs, manufactures and sells standard and custom miniature (hybrid) DC-to-DC power converters and custom miniature (hybrid) electronic circuits for applications in commercial, space and military aerospace, industriesfiber optic and medical technology industries. Interpoint has facilities in the medical technology industry. Interpointstate of Washington domestically and Taiwan.
STC designs, manufactures and markets power management products and sophisticated electronic radio frequency (“ RF”) components and subsystems. Its products are used in broadband wireless equipment, digital cellular/PCS wireless infrastructure equipment and defense electronics. STC supplies many U.S. Department of Defense prime contractors and foreign allied defense organizations with products designed into systems for missile, radar, aircraft, electronic warfare, intelligence and communication applications. STC’s commercial customers integrate its products into wireless systems, which are then sold to wireless service providers globally and enable the transmission and reception of data signals in wireless systems worldwide. Applications for its commercial products include point-to-point transport, point-to-multipoint access, cellular backhaul and digital cellular/PCS base stations. STC has one internationalfacilities in Florida, Massachusetts, Arizona and Texas. The California facility was closed in December 2003.
GTC provides high-reliability, customized-contract manufacturing services and products focused on military and defense applications. GTC services include the assembly and testing of printed circuit boards, electromechanical devices, customized integrated systems, cables and wire harnesses. GTC has a facility in Taiwan.

New Mexico.
The groupAerospace & Electronic Segment employs 2,1002,850 people and had assets of $269.2$480.3 million at year-
end.December 31, 2004. The order backlog totaled $232.6$341.5 million and $277.2 million at December 31, 1999.

2004 and 2003, respectively.
ENGINEERED MATERIALS
The Engineered Materials Segment consists of Kemlite and Polyflon.
Kemlite manufactures FRP panels for the transportation industry, in refrigerated and dry-van truck trailers, recreational vehicles, industrial markets and the commercial construction industry for food processing, fast-food restaurants and supermarket applications, as well as institutions where fire-rated materials with low-smoke generation and minimum toxicity are required, and for residential construction. Kemlite sells its products directly to truck trailer and recreational vehicle manufacturers and uses distributors to serve the commercial construction market and some segments of the recreational vehicle market. Kemlite’s manufacturing facilities are located in Illinois, Arkansas, Tennessee, Texas, Kentucky and the United Kingdom.
Polyflon is a manufacturer of small specialty components, primarily substitute materials for antennas. Polyflon is located in Connecticut.
The Engineered Materials Segment employs 868 people and had assets of $188.2 million at December 31, 2004. The order backlog totaled $16.4 million and $11.8 million at December 31, 2004 and 2003, respectively.
5
PART I
Item 1. Business (continued)
MERCHANDISING SYSTEMS
The Merchandising Systems Segment consists of Crane Merchandising Systems (“CMS”) and National Rejectors, Inc. GmbH (“NRI”).
CMS products include electronic vending merchandisers for refrigerated and frozen foods, hot and cold beverages, snack foods, single cup individually brewed hot drinks and combination vendors/merchandisers designed to vend both snack foods and hot/cold drinks or snacks and refrigerated/frozen foods in one machine. CMS products are marketed to customers in the United States and Europe by Company sales and marketing personnel as well as distributors and, in other international markets, through independent distributors. CMS launched new features, new products and updated technology in 2002, including its new guaranteed delivery system called SureVend. CMS also includes Streamware Corporation, a leading provider of business management software and market analysis tools for the vending and food service industry. Streamware’s VendMAX is a fully-integrated software/hardware solution that offers operators cash accountability, inventory control and improved merchandising capabilities. CMS has manufacturing facilities in the state of Missouri domestically and England.
NRI manufactures electronic coin validators for the automated merchandising and gambling/amusement markets in Europe. NRI is among the relatively few makers of coin validators that supply European countries with validators programmed for the new euro coins that went into circulation at the start of 2002. NRI has facilities in Germany, Spain and France.
The Merchandising Systems Segment employs 911 people and had assets of $121.7 million at December 31, 2004. Order backlog totaled $12.0 million and $10.3 million at December 31, 2004 and 2003, respectively.
FLUID HANDLING
The Fluid Handling segmentSegment consists of Engineered Valves, Commercial
Valves,the Valve Services,Group, Crane Ltd., Resistoflex-Industrial, Crane Pumps & Systems, Crane Supply and pump and water treatment businesses.Crane Environmental. The Crane Engineered and Commercial valve businesses,Valve Group, with four manufacturing facilities in North America,the United States as well as operations in, the United Kingdom,Canada, England, France, Ireland, Germany, Australia, Norway, India, Hungary, China, Indonesia, Mexico, Japan, Belgium, Korea, Taiwan, Finland, the Netherlands and Indonesia, sellSwitzerland, sells a wide variety of commodity and special purpose valves and fluid control products for the chemical and hydrocarbon processing, petrochemical, pharmaceutical, power generation, marine, general industrial and commercial construction industries. Products are sold under the trade names Crane, Saunders, Jenkins, Pacific, Xomox, DEPA, ELRO, REVO, Westad, Flowseal, Center Line,Centerline, Stockham Triangle and Duo-Check brands.
The company's Valve Service business, with two manufacturingDuo-Chek.
Crane Ltd. manufactures pipe fittings, gate, globe and check valves, ball and butterfly valves and static and automatic balancing valves. Crane Ltd. has facilities in North
America, providesthe United Kingdom and China.
Resistoflex-Industrial is engaged in the design, manufacture and sale of corrosion-resistant, plastic-lined steel pipes, fittings, tanks, valves, valve diagnostic equipmentexpansion joints and relatedhose used primarily by the pharmaceutical, chemical processing, pulp and paper, ultra pure water and waste management industries. Resistoflex-Industrial sells its industrial products through distributors who provide stocking and fabrication services to industrial users in the nuclear power, hydrocarbon,United States. Resistoflex-Industrial Products also manufactures plastic-lined pipe products at its Singapore plant serving the Asian chemical processing and power generationpharmaceutical industries. Resistoflex-Industrial has facilities in the state of North Carolina domestically, Singapore, Germany and China.
Crane Pumps & Systems has eightseven manufacturing facilities, five of which are in the United States. Pumps are manufactured under the trade names Deming, Weinman, Chempump, Burks, Chem/Meter, Barnes, Sellers and Process Systems brand names.Systems. Pumps are sold to a broad customer base whichthat includes chemical and hydrocarbon process industries,processing, automotive, municipal, industrial and commercial wastewater, power generation, commercial heating, ventilation and air-conditioning industries and original equipment manufacturers. The water treatment businessCrane Pumps & Systems has manufacturing facilities in PennsylvaniaOhio, Michigan, Indiana, Canada and Florida and serves the water and wastewater treatment market.
Its products are sold under the Cochrane and Environmental Products names. China.
Crane Supply, a distributor of plumbing supplies, valves and piping in Canada, maintains thirty-five branches34 distribution facilities throughout CanadaCanada.
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PART I
Item 1. Business (continued)
Crane Environmental is a leading supplier of specialized water purification solutions for the world’s industrial and distributescommercial markets. Crane manufacturedEnvironmental’s worldwide applications include government, pulp and paper, steel, oil, gas, petrochemical, power generation, wastewater treatment, carwash, bottling, beverage and agriculture. Its products are sold under the trade names Cochrane and Environmental Products. Crane Environmental has facilities in that country. Crane Supply also distributes products
that are both complementary toFlorida and competitive with Crane's own manufactured
products.

This groupPennsylvania.
The Fluid Handling Segment employs over 3,0005,373 people and had assets of $330.5$734.9 million at December 31, 1999. Fluid Handling order2004. Order backlog totaled $79.5 million.

Products in this group are sold directly to end users through Crane's sales
organization$183.2 million and through independent distributors$140.2 million at December 31, 2004 and manufacturers
representatives.

PART I (continued)

Item 1. Business (continued)
--------

CRANE 2003, respectively.
CONTROLS

This segment includes five businesses:
The Controls Segment consists of Barksdale Powers Process Controls,
Dynalco Controls, Azonix, and Ferguson. TheAzonix/Dynalco. These companies in this segment design, manufacture and market industrial and commercial products that control flows and processes in various industries including thetransportation, petroleum, chemical, construction, food and beverage and power generation industries and transportation.

generation.
Barksdale manufactures solid state and electromechanical pressure switches and transducers, level switches and continuous level indicators, temperature switches and directional control valves that serve a broad range of commercial and industrial applications. It has manufacturing and marketing facilities in the United Statesstate of California domestically and Germany.

Powers Process Controls designs, manufactures and markets water mixing and
thermal shock protection shower systems, commercial and residential plumbing
brass, correctional water controllers, process controllers and instrumentation,
process control valves and temperature regulators for industrial applications
and the commercial and institutional construction industry.

Azonix/Dynalco Controls designs and manufactures rotational speed sensors, temperature and pressure instruments and monitors for rugged environments, microprocessor basedand microprocessor-based engine and mechanism controls. Dynalco'sAzonix/Dynalco’s products are used worldwide by industries in a variety of applications for various industries including stationary
natural gas engines,transportation, power generation, oil, gas, petrochemical, chemical, pharmaceutical, agriculture and gas production and transmissions,
and agriculture equipment.

Azonixmetal processing. It also manufactures operator interfaces and measurement and control systems for hazardous and harsh applications, intelligent data acquisition products, high-precision thermometers and calibrators for the oilcalibrators. Azonix/Dynalco has manufacturing facilities in Massachusetts, Florida and gas, petrochemical,
chemical, pharmaceutical and metal processing industries.

Ferguson designs and manufactures in the United States and through Ferguson
Machine Co. S.A. in Europe, precision index and transfer systems for use on and
with machines that perform automatic forming, assembly, metal cutting, testing
and inspection operations. Products include mechanical and electronic index
drives, pick-and-place robots, in line transfer machines, rotary tables, press
feeds and custom cams.

Texas.
The products in this segment are sold directly to end users and engineering contractors through the company'sCompany’s own sales forcesforce and cooperatively with sales representatives, stocking specialists and industrial distributors.

Crane
The Controls Segment employs 422 people and had assets of $129.2$49.9 million at December 31, 1999,2004. Order backlog totaled $13.7 million and employs 900 people. On$12.2 million at December 31, 1999, Crane Controls had a backlog of $28.3
million.

PART I (continued)

Item 1. Business (continued)
--------

2004 and 2003, respectively.
COMPETITIVE CONDITIONS
The company'sCompany’s lines of business are conducted under activelyhighly competitive conditions in each of the geographic and product areas they serve. Because of the diversity of the classes of products manufactured and sold, they do not compete with the same companies in all geographic or product areas. Accordingly, it is not possible to estimate the precise number of competitors or to identify the principal methods of competition. Although reliable statistics are not
available,Company’s competitive position, although the companyCompany believes that it is an important supplier to a numberprincipal competitor in most of market nichesits markets. The Company’s principal method of competition is production of quality products at competitive prices in a timely and geographic areas.

efficient manner.
The company'sCompany’s products have primary application in the industrial,
construction, aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation,recreational vehicle and fluid
handlingtransportation industries. As such, they are dependent upon numerous unpredictable factors, including changes in market demand, general economic conditions residential and commercial building starts, and capital spending. Because these products are also sold in a wide variety of markets and applications, the companyCompany does not believe it can reliably quantify or predict the possible effects upon its business resulting from such changes.

Seasonality is a factor in the Canadian operations. Net sales in Canada and
assets related to Canadian operations were 13.19% and 7.85% of the respective
1999 consolidated amounts.

7
PART I
Item 1. Business (continued)
The company'sCompany’s engineering and product development activities are directed primarily toward improvement of existing products and adaptation of existing products to particular customer requirements.requirements as well as the development of new products. While the companyCompany owns numerous patents and licenses, none are of such importance that termination would materially affect its business. ProductResearch and development and engineering costs totaledare expensed when incurred. These costs were approximately $58.9$52.4 million in 1999, $70.92004, $46.8 million in 1998,2003, and $56.3million$46.0 million in 1997. Included in these amounts2002, incurred mostly by the Aerospace & Electronics Segment. Funds received from customer-sponsored research and development projects were approximately $7.4$6.2 million, $15.8$3.1 million, and $9.6$5.1 million received by the company in 1999, 19982004, 2003 and 1997,2002, respectively, for customer sponsored research and development.

were recorded in net sales.
The companyCompany is not dependent on any single customer nor are there any issues at this time regarding available raw materials for inventory.

inventory that would be material to its operations.
Costs of compliance with federal, state and local laws and regulations involving the discharge of materials into the environment or otherwise relating to the protection of the environment are not expected to have a material effect upon the company'sCompany’s capital expenditures, earnings or competitive position.

PART I (continued)

Item 1. Business (continued)
--------

AVAILABLE INFORMATION
Copies of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, are available free of charge on the Company’s website at www.craneco.com as soon as reasonably practicable after such reports are filed with the Securities and Exchange Commission.
FORWARD LOOKING STATEMENTS
--------------------------

Throughout this Annual Report on Form 10-K and the Annual Report to Shareholders, particularly in the Letter to Shareholders and Management'sManagement’s Discussion and Analysis of Operations, the companyCompany makes numerous statements about expectations of future performance and market trends and statements about plans and objectives and other matters which because they are not historical fact, may constitute "forward-looking statements"“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
In addition, the companyCompany and its representatives may, from time to time, make written or oral forward-looking statements including statements contained in the company'sCompany’s filings with the Securities and Exchange Commission and in its reports to shareholders which can be identified by the use of forward-looking terminology such as "believes"“believes”, "contemplates"“contemplates”, "expects"“expects”, "may"“may”, "will"“will”, "could"“could”, "should"“should”, "would"“would” or "anticipates"“anticipates” or the negative thereof or comparable terminology.
All forward-looking statements speak only as of the date on which such statements are made and involve risk and uncertainties that exist in the company'sCompany’s operations and business environment and are not guarantees of future performance. The companyCompany assumes no obligation to update any of these forward-
lookingforward-looking statements, whether as a result of new information or future events. As
a responsibility to our investors, the company will make reasonable efforts at
timely disclosure of future facts and circumstances which may affect such
statements.

Because the companyCompany wishes to take advantage of the "safe harbor"“safe harbor” provision of the Private Securities Litigation Reform Act of 1995, readers are cautioned to consider the following important risk factors that could affect the company'sCompany’s businesses and cause actual results to differ materially from those projected.
General
A substantial portion of the sales of the company'sCompany’s business segments are concentrated in industries which are cyclical in nature. Because of the cyclical nature of these businesses, their results are subject to fluctuations in domestic and international economies as well as to currency fluctuations and unforeseen inflationary pressures. Reductions in the business levels of these industries would impact negatively onimpact the sales and profitability of the affected business segments.
8
PART I
Forward Looking Statements (continued)
While the companyCompany is a principal competitor in most of its markets, all of its markets are highly competitive. The company'sCompany’s competitors in many of its business segments can be expected in the future to improve technologies, reduce costs and develop and introduce new products, and the ability of the company'sCompany’s business segments to achieve similar advances will be important to their competitive positions. Competitive pressures, including those discussed above, could cause one or more of the company'sCompany’s business segments to lose market share or could result in significant price erosion, either of which wouldcould have an adverse effect on the company'sCompany’s results of operations.
The company'sCompany’s acquisition program entails the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities and potential profitability of acquisition candidates and in integrating the operations of acquired companies. There can be no assurance that suitable acquisition opportunities will be available in the future, that the companyCompany will continue to acquire businesses or that any business acquired will be integrated successfully or prove profitable.

PART I (continued)

Item 1. Business (continued)
--------

Forward Looking Statements (continued)
- --------------------------

Net sales and assets related to operations outside the United States were 34.8%46.4% and 21.9%27.7% in 2004, 44.4% and 29.6% in 2003, and 42.7% and 30.6% in 2002, respectively, of the respective 1999Company’s consolidated amount.amounts. Such operations and transactions entail the risks associated with conducting business internationally, including the risk of currency fluctuations, slower payment of invoices, adverse trade regulations and possible social, economic and economicpolitical instability. While the full impact of this economic instability cannot be predicted, it could have a material adverse effect on the company's revenuesCompany’s revenue and profitability.
Certain of the company'sCompany’s business segments are dependent upon highly qualified personnel, and the companyCompany generally is dependent upon the continued efforts of key management employees. Particularly in light of the current tight
labor market, the company's prospects would be adversely affected by an
inability to retain its key personnel.

New factors emerge from time to time, and it is not possible for management to predict all of such factors. Further, management cannot assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Asbestos Litigation
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 "Year 2000" issue concernedCompany cautions that its estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on recent experience during the potential exposures relatedlast few years that may not prove reliable as predictors. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would any substantial adverse verdict at trial. A legislative solution or a revised structured settlement transaction could also change the estimated liability. 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 escalation in the number of claims and settlement and defense costs continues or if legislation or another alternative solution is implemented; however, the Company is currently unable to estimate such future changes. Although the resolution of these claims may take many years, the effect on results of operations, cash flow and financial position in any given period from a revision to these estimates could be material.
For more information with respect to the automated generation of business and financial misinformation resulting from the
application of computer programs which have been written using two digits,
rather than four, to define the applicable year of business transactions.
Suppliers, customers and creditors of the company also faced Year 2000 issues.
The discussion of the Impact of the Year 2000 contained on Page 34 of the
company's 1999 Annual Report under Management's Discussion and Analysis of
Operations is incorporated herein by reference.

Engineered Materials

In the Engineered Materials segment, sales and profits could fall if there
were a decline in demand for truck trailers, recreational vehicles or building
products, for which Crane companies produce fiberglass-reinforced panels.
Profits could be squeezed as well by unanticipated increases in resin and
fiberglass material costs, by unforeseen fluctuations in the Canadian dollar,
and by any inability on the part of Crane's companies to maintain their position
in product cost and functionality against competing materials.

Merchandising Systems

Results at Crane's U.S.-based vending machine business could be reduced by
delays in launching or supplying new products or an inability to achieve new
product sales objectives. Results at Crane's Germany-based coin validation
machine business could be affected by changes in demand stemming from the advent
of the Euro, the planned new European currency, as well as by unforeseen
fluctuations in the value of the Deutschemark versus the U.S. dollar.

PART I (continued)Company’s risks associated with its asbestos liability, see Item 1. Business (continued)
--------

Forward Looking Statements (continued)
- --------------------------

3 Legal Proceedings.
Aerospace & Electronics
A significant fall-offfall off in demand for air travel or a decline in airline profitability generally could result in reduced aircraft orders and could also cause the airlines to scale back on more of their purchases of
9
PART I
Forward Looking Statements (continued)
repair parts from Crane
companies.the Company’s businesses. The companiesbusinesses could also be impacted if major aircraft manufacturers, such as Boeing (which represented approximately 10% and 11% of the segment’s revenue in 2004 and 2003, respectively) encountered production problems, or if pricing pressure from aircraft customers caused the manufacturers to press their suppliers to lower prices. Sales and profits could face erosion if pricing pressure from competitors increased, if planned new products were delayed, if finding new aerospace-qualified suppliers grew more difficult, or if required technical personnel became harder to hire and retain. The Aerospace & Electronics segment results could be below expectations if Asia's
economic problems leadrecovery begins to slow down or reverse, which could cause the U.S. customers to delay or cancel spare parts or aircraft orders.
With the addition of STC in 2003, a furtherportion of this segment’s business is conducted under United States government contracts and subcontracts. These contracts are either competitively bid or sole source contracts. Competitively bid contracts are awarded after a formal bid and proposal competition among suppliers. Sole source contracts are awarded when a single contractor is deemed to have an expertise or technology that is superior to that of competing contractors. A reduction in Congressional appropriations that affect defense spending or the ability of the United States government to terminate its contracts could impact the performance of this business.
During the third quarter of 2002, the Company’s Hydro-Aire unit identified a wire chafing situation relating to fuel pumps used on certain Boeing aircraft, and the Company recorded a $4 million charge for estimated costs of inspecting and repairing such pumps. Several additional pumps, from this same set of 35,000 pumps, were returned with a mechanical overheating issue, which was subsequently determined by Boeing and the Federal Aviation Administration (“FAA”) to require an aircraft systems level solution not chargeable to Hydro-Aire. In connection with these issues, the FAA issued an Emergency Airworthiness Directive to instruct airline carriers to comply with a precautionary step of carrying additional jet fuel to keep fuel pumps submerged at all times, until the pumps were inspected, to mitigate ignition risk and to ensure air safety. Inspections have been completed on all affected pumps. Several airline carriers petitioned Hydro-Aire for reimbursement for additional costs, such as the cost of carrying additional jet fuel. The Company has disclaimed responsibility for these costs under applicable contract terms.
Engineered Materials
In the Engineered Materials Segment, sales and profits could fall if there were a decline in aircraft orders, particularly
sincedemand for truck trailers, recreational vehicles, industrial or building products for which the Company’s businesses produce fiberglass-reinforced panels. Profits could be adversely affected as well by unanticipated increases in resin and fiberglass material costs or the loss of a principal supplier and by any inability on the part of the businesses to maintain their position in product cost and functionality against competing materials.
Merchandising Systems
Results at the Company’s U.S.-based vending machine business could be reduced by delays in launching or supplying new products or an inability to achieve new product sales objectives. Results at the Company’s German-based coin validation machine business have been and will continue to be affected by changes in demand stemming from the advent of the euro, the new long-range Boeing aircraft favored for many Asian routes contain
a higherEuropean currency, as well as by unforeseen fluctuations in the value of Crane-supplied equipment thanthe euro or other aircraft from Boeing and
other manufacturers.

European currencies versus the U.S. dollar.
Fluid Handling

Crane's companies
The Company’s businesses could face increased price competition from larger competitors. FurtherSlowing or reversal of the U.S. economic turmoil in Asiarecovery could reduce sales and profits, particularly if projects for which Crane companiesthese businesses are suppliers or bidders are cancelled or delayed, or ifdelayed. Furthermore, as the companies' abilityCompany continues to source productoutsource from international sources, is impeded.particularly low-cost countries, the risk of supply chain issues increases. At Crane's Canadian distribution operation,the Company’s foreign operations, reported results in U.S. dollar terms could be eroded by an unanticipated weakening of Canada's currency.

currency of the respective operations.
10
PART I
Forward Looking Statements (continued)
Controls
A number of factors could affect the Controls segment'sSegment’s results. Lower sales and earnings could result if Crane's companies can notthe Company’s businesses cannot maintain their cost competitiveness, encounter delays in introducing new products or fail to achieve their new product sales objectives. Results could decline because of an unanticipated decline in demand for Cranethe businesses’ products from the industrial machinery, oil and gas andor heavy equipment industries, or from unforeseen product obsolescence.

PART I (continued)

Item 2. Properties
----------

TOTAL MANUFACTURING FACILITIES NUMBER AREA
------------------------------ ------ ----
Fluid Handling
Item 2. Properties
Total Manufacturing Facilities
Number
Area (sq. ft.)
Aerospace & Electronics
United States 12 1,095,000
International 3 74,000
Engineered Materials
United States 8 558,000
International 1 31,000
Merchandising Systems
United States 1 463,000
International 2 138,000
Fluid Handling
United States 15 1,625,000
International 24 3,168,000
Controls
United States 4 181,000
International 1 27,000
Leased Manufacturing Facilities
Leases Expiring Through
Number
Area (sq. ft.)
United States 2009 13 523,000
Other International 2016 10 771,000
Other Facilities
Aerospace & Electronics operates one service center in the United States, 16 1,401,000 sq. ft.
Canada 2 140,000 sq. ft.
International 9 1,251,000 sq. ft.

Aerospace
United States 6 634,000 sq. ft.
International 3 40,000 sq. ft.

Engineered Materials
United States 10 1,235,000 sq. ft.
Canada 3 636,000 sq. ft.
International 1 10,000 sq. ft.

Crane Controls
United States 6 407,000 sq. ft.
International 2 63,000 sq. ft.

Merchandising Systems
United States 1 463,000 sq. ft.
Other International 2 109,000 sq. ft.

Leased Leases
Manufacturing Expiring
Facilities Through Number Area
---------- ---------- ------ ----

United States 2009 11 536,000 sq. ft.
Canada 2000 1 13,000 sq. ft.
Other International 2007 6 139,000 sq. ft.

Other Facilities
----------------
which is leased.
Fluid Handling operates six valvenine service centers in the United States, of which threeseven are owned,leased, and three30 service centers outside the United States, of which 25 are leased. This segment operates 44 distribution centers of which two are in the United States. This
segment operates internationally thirty-nine distributionStates and three service
centers.

Crane Controls operates one distribution center internationally.

29 are leased.
Merchandising Systems operates eightsix distribution centers in the United States and seven internationally.

six internationally, of which 11 are leased. This segment operates two service centers, one of which is in the United States and is leased.
Engineered Materials operates eightseven distribution centers in the United States and four outside the United States, of which ten are leased. This segment operates one service center that is owned,outside the United States and two internationally.

is leased.
In the opinion of management, these properties have been well maintained, are in sound operating condition and contain all necessary equipment and facilities for their intended purposes.

12
11
PART I (continued)

Item 3. Legal Proceedings

Neither
Item 3. Legal Proceedings
The Company becomes involved from time to time in various lawsuits, claims and proceedings relating to the company, nor anyconduct of its business, including those pertaining to environmental, government contracting, product liability, patent infringement, commercial, employment, employee benefits, and shareholder matters.
Asbestos Liability
Status of Comprehensive Asbestos Settlement
On October 21, 2004 the Company reached an agreement in principle with attorneys representing a majority of persons with current asbestos-related personal injury claims against the Company (the “Current Claimants”) and an independent representative (the “FCR”) of potential future claimants with potential asbestos-related personal injury claims against the Company (the “Future Claimants”) to resolve all current and future asbestos-related personal injury claims against the Company. The comprehensive asbestos settlement had two components: first, a $280 million trust to pay settlements of asbestos claims by Current Claimants; and second, a $230 million trust to pay settlements of claims by Future Claimants, to be structured and implemented pursuant to Section 524(g) of the U.S. Bankruptcy Code. On that date, MCC Holdings, Inc., an indirect wholly-owned subsidiary of the company has becomeCompany formerly known as Mark Controls Corporation (“MCC”), entered into a partyMaster Settlement Agreement (the “MSA”) with representatives of a majority of Current Claimants who were diagnosed with asbestos-related personal injuries prior to nor hasJune 9, 2004. At the same time, MCC and the representatives of Current Claimants entered into an MCC Settlement Trust Agreement, which provides for a $280 million trust (the “MCC Settlement Trust”) to be funded and administered to pay asbestos-related personal injury claims settled under the MSA. Through November 20, 2004 (the deadline for Current Claimants to indicate their desire to participate in the MCC Settlement Trust), a total of 109 law firms executed MSAs, directly or through Adoption Agreements, together with lists naming a total of approximately 196,000 participating claimants. Through December 20, 2004 (the deadline for Current Claimants to submit the required claim documentation to the independent claims reviewer), a total of approximately 171,000 claim packages were received subject to review for compliance with the terms of the MSA. While the number of claimants submitting claims under the MSA exceeds the number of filed claims against the Company in the tort system (approximately 85,000 at December 31, 2004), the Company cannot predict whether, or when, any of such additional claims will be filed against the Company in the tort system.
On December 2, 2004, the United States Court of Appeals for the Third Circuit issued its opinion and ruling in theCombustionEngineering case in which the Court reversed the District Court’s order approving Combustion Engineering’s bankruptcy Plan of Reorganization and made a number of holdings regarding the scope of Section 524(g) and the appropriate structure of transactions to confer relief for asbestos defendant companies under Section 524(g). The Court’s opinion, in the Company’s view, constituted a material change in the case law regarding Section 524(g) transactions, and accordingly, on January 24, 2005, the Company exercised its right to terminate the MSA. As a consequence of the Company’s notice of termination, the trustee of the MCC Settlement Trust has returned to the Company (i) the Company’s demand note in the principal amount of $270 million and (ii) the $10 million in cash that was paid on October 21, 2004 less certain fees and expenses of the trustee.
The termination of the MSA places the Company and asbestos claimants back into the tort system for resolution of claims, in the absence of a modified comprehensive settlement transaction agreed to by the parties or a federal legislative solution. Although the Company may continue its discussions with representatives of the asbestos claimants, there can be no assurance that the issues presented by theCombustionEngineering opinion can be resolved such that agreement on a modified 524(g) transaction for the Company will be feasible. It is expected that a new bill will be introduced in the United States Senate early in 2005 that would, if enacted into law, establish a trust fund to compensate asbestos
12
PART I
Item 3. Legal Proceedings (continued)
claimants. While the Company believes that such federal legislation is the most appropriate solution to the asbestos litigation problem, there is substantial uncertainty regarding whether this will occur and, if so, when and on what terms. The Company remains committed to exploring all feasible alternatives available to resolve its asbestos liability in a manner consistent with the best interests of the Company’s shareholders.
Information Regarding Claims and Costs in the Tort System
As of December 31, 2004, the Company was a defendant in cases filed in various state and federal courts alleging injury or death as a result of exposure to asbestos. Activity related to asbestos claims during the periods indicated was as follows:
Year Ended December 31,
2004
2003
2002
Beginning claims 68,606 54,038 16,180
New claims 18,932 19,115 49,429
Settlements (1,038 ) (3,883 ) (11,299 )
Dismissals (1,523 ) (664 ) (272 )
Ending claims * 84,977 68,606 54,038
* Does not include 35,350 maritime actions that were filed in the United States District Court for the Northern District of Ohio and transferred to the Eastern District of Pennsylvania pursuant to an order by the Federal Judicial Panel on Multi-District Litigation (“MDL”). These claims have been placed on the inactive docket of cases that are administratively dismissed without prejudice in the MDL.
Of the 84,977 pending claims as of December 31, 2004, approximately 25,000 claims were pending in New York, approximately 33,000 claims were pending in Mississippi and approximately 3,000 claims were pending in Ohio, jurisdictions in which recent legislation or judicial orders restrict the types of claims that can proceed to trial on the merits.
The gross settlement and defense costs in the tort system (before insurance recoveries and tax effects) for the Company in the years ended December 31, 2004 and 2003 totaled $40.9 million and $21.1 million, respectively. The Company’s total pre-tax cash payments for such settlement and defense costs net of the Company’s cost sharing arrangement with insurers in the years ended December 31, 2004 and 2003 amounted to $20.2 million and $7.9 million, respectively. Detailed below are the comparable amounts for the periods indicated.
Year Ended
December 31,
Cumulative to
date through
December 31, 2004
(In millions)
2004
2003
2002
Settlement costs (1) $ 17.2 $ 11.9 $ 7.3 $ 38.8
Defense costs (1) 23.7 9.2 4.8 46.0
Total costs 40.9 21.1 12.1 84.8
Pre-tax cash payments(2) 20.2 7.9 2.4 31.8
(1) Before insurance recoveries and tax effects.
(2) Net of cost sharing arrangements with insurers. Amounts include advance payments to third parties that are reimbursable by insurers.
The foregoing amounts do not include costs incurred by the Company relating to the comprehensive asbestos settlement announced on October 21, 2004. During the year ended December 31, 2004, the Company incurred costs of $11.5 million (before tax effects) for fees and expenses of attorneys, financial advisors and other special advisors for services relating to the comprehensive asbestos settlement. Total pre-tax cash payments for such fees and expenses through December 31, 2004
13
PART I
Item 3. Legal Proceedings (continued)
amounted to $7.9 million. In addition, the Company paid $10 million into the settlement trust for current asbestos claimants, which has been returned to the Company as described above, net of certain expenses of the trustee. Cash payments related to asbestos settlement and defense costs, and certain related fees and expenses are estimated to be in the range of $50 million to $70 million during 2005, which will be offset to some degree by reimbursements from insurers and tax benefits.
The amounts shown for settlement and defense costs are not necessarily indicative of future period amounts, which may be higher or lower than those reported. 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 many years. Payment uncertainty results from the significant proportion of future claims included in the estimated asbestos liability discussed below as well as variability of timing and terms of settlements and insurance reimbursement. In addition, there will be periods during which net cash flows increase because the Company’s insurance coverage for asbestos claims involves multiple insurers, with different policy terms and certain gaps in coverage, and, consequently, the timing and amount of insurance reimbursement will vary.
Effects on the Consolidated Financial Statements
The Company has retained the firm of Hamilton, Rabinovitz & Alschuler, Inc. (“HR&A”), a nationally recognized expert in the field, to assist management in estimating the Company’s asbestos liability in the tort system and in view of the termination of the Master Settlement Agreement. HR&A reviewed 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 was based largely on the Company’s experience during the past two years for claims filed, settled and dismissed. The Company’s experience was compared to the results of previously conducted epidemiological studies estimating the number of people 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 estimated the number of future claims that would be filed, as well as the related settlement or indemnity costs that would be incurred to resolve those claims. This methodology has been accepted by numerous courts and is the same methodology that is utilized by the expert who is routinely retained by the asbestos claimants committee in asbestos-related bankruptcies. After discussions with the Company, HR&A assumed that costs of defending asbestos claims in the tort system would increase to $35 million in 2005 and remain at that level (with increases of 4% per year for inflation) indexed to the number of estimated pending claims in future years. Based on this information, HR&A compiled an estimate of the Company’s asbestos liability for pending and future claims, based on claim experience over the past two years and covering claims expected to be filed through the year 2011. Although the methodology used by HR&A will also show claims and costs for periods subsequent to 2011 (up to and including the endpoint of the asbestos studies referred to above), management believes that the level of uncertainty 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 2011, particularly given the possibility of federal legislation within that time frame. While it is reasonably possible 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 2011. Accordingly, no accrual has been recorded for any costs which may be incurred beyond 2011.
With the termination of the MSA and the return to the tort system for resolution of asbestos claims, management has made its best estimate of the costs through 2011 based on the analysis by HR&A. In making this estimate, the Company has adjusted the assumed rate of insurance recoveries from 30% in the context of the proposed comprehensive asbestos settlement back to 40% of the estimated liability
14
PART I
Item 3. Legal Proceedings (continued)
payable over time in the tort system. A liability of $649.7 million has been recorded to cover the estimated cost of asbestos claims now pending or subsequently asserted through 2011, of which approximately 60% is attributable to settlement and defense costs for future claims projected to be filed through 2011. An asset of $257.2 million has been recorded representing the probable insurance reimbursement for such claims. Under the tort system, the Company incurs not only settlement costs but substantial legal defense costs, and the Company’s best estimate of settlement and defense costs for both pending and future claims through 2011 (including certain related fees and expenses) amounted to $649.7 million at December 31, 2004. This compares to the MSA-based liability estimate of $565.9 million ($578 million at September 30, 2004) which represents the cost of the one-time settlement of all asbestos claims against the Company. The $83.8 million higher liability estimate under the tort system includes the added cost to defend claims against the Company. However, the higher insurance recovery rate in the tort system (40%), as compared with the MSA (30%), is expected to provide the Company with greater insurance recoveries of approximately $97.8 million. Thus, the net estimated cost after anticipated insurance recoveries was reduced by $14 million, which increased net income by $9.1 million, or $0.15 per share, in the fourth quarter of 2004. The principal factors affecting the liability estimates under the tort system versus the MSA are (i) the tort system estimate includes defense costs while the MSA estimate did not, (ii) under generally accepted accounting principles, the tort system estimate is presented in nominal dollars while the MSA estimate is discounted to present value, (iii) insurance recoveries under the tort system are estimated at 40% of settlement and defense costs, while the MSA estimate reduced anticipated insurance recoveries to 30% in the context of the proposed comprehensive asbestos settlement, and (iv) the tort system estimate covers the period through 2011, while the MSA estimate was a full and final settlement of the liability.
A significant portion of the Company’s settlement and defense costs have been paid by its primary insurers and one umbrella insurer up to the agreed available limits of the applicable policies. The Company has substantial excess coverage policies that are also expected to respond to asbestos claims as settlements and other payments exhaust the underlying policies, but there is no cost sharing or allocation agreement yet in place with the excess insurers. The same factors that affect developing estimates of probable settlement and defense costs for asbestos-related liabilities also affect estimates of the probable insurance payment, as do a number of additional factors. These additional factors include the financial viability of the insurance companies, the method in 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 property becomeinterrelationships. 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. After considering the foregoing factors and consulting with legal counsel and such insurance consultants, the Company determined its probable insurance reimbursement rate to be 40% under the tort system, as contrasted with 30% under the MSA. This insurance receivable is included in other assets.
On January 21, 2005, five of the Company’s insurers within two corporate insurer groups filed suit in Connecticut state court seeking injunctive relief against the Company and declaratory relief against the Company and dozens of the Company’s other insurers. The suit sought declaratory relief that (i) the plaintiff insurers are not obligated to pay any portion of the Company’s proposed global settlement or, at a minimum, that the plaintiff insurers are not obligated to pay any portion thereof that is unreasonable or alternatively (ii) the proposed global settlement is unreasonable in amount and therefore an improper basis on which to determine the coverage obligations that they may have to the Company. The suit also sought temporary and permanent injunctive relief restraining the Company from participating in any further settlement discussions with representatives of asbestos plaintiffs or agreeing to any settlement unless the Company permits the plaintiff insurers to both participate in such discussions and have a meaningful opportunity to consider whether to consent to any proposed settlement, or unless the Company elected to waive coverage under the insurers’ policies. The suit
15
PART I
Item 3. Legal Proceedings (continued)
sought additional declaratory relief on a number of issues relating to the Company’s rights under the insurance policies issued by the plaintiff insurers and the allocation of damages among the policies issued by the plaintiff and defendant insurers. The plaintiffs also sought expedited discovery on, among other things, the Company’s proposed global settlement. At a hearing on February 22, 2005, the Company (i) contested the application for temporary injunctive relief and expedited discovery, (ii) moved to dismiss the count of the complaint seeking permanent injunctive relief on the grounds that the count was moot insofar as it addressed the proposed global settlement terminated on January 24, 2005 and not appropriate for determination insofar as it sought relief regarding any future negotiations with representatives of asbestos claimants and (iii) moved to dismiss counts of the complaint seeking declaratory relief with respect to the proposed global settlement as moot. At the hearing, the court denied the plaintiff insurers’ application for temporary injunctive relief and expedited discovery. In denying temporary injunctive relief, the court stated that the plaintiffs could not show irreparable injury and that the plaintiff insurers would have an adequate remedy at law. In light of the court’s ruling and the Company’s motions to dismiss, the insurer plaintiffs sought and received leave to amend their complaint within 30-45 days from the date of the hearing to remove certain declaratory relief counts and to remove or restate the remaining allegations.
Estimation of the Company’s ultimate exposure for asbestos-related claims is subject to significant uncertainties, as there are multiple variables that can affect the timing, severity and quantity of claims. The Company cautions that its estimated liability is based on assumptions with respect to future claims, settlement and defense costs based on recent experience during the last few years that may not prove reliable as predictors. A significant upward or downward trend in the number of claims filed, depending on the nature of the alleged injury, the jurisdiction where filed and the quality of the product identification, or a significant upward or downward trend in the costs of defending claims, could change the estimated liability, as would any substantial adverse verdict at trial. A legislative solution or a revised structured settlement transaction could also change the estimated liability.
Since many uncertainties exist surrounding asbestos litigation, 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 escalation in the number of claims and settlement and defense costs continues or if legislation or another alternative solution is implemented; however, the Company is currently unable to estimate such future changes. Although the resolution of these claims may take many years, the effect on results of operations, cash flow and financial position in any given period from a revision to these estimates could be material.
Other Contingencies
For environmental matters, the Company records a liability for estimated remediation costs when it is probable that the Company will be responsible for such costs and they can be reasonably estimated. Generally, third party specialists assist in the estimation of remediation costs. The environmental remediation liability at December 31, 2004 is primarily for the former manufacturing site in Goodyear, Arizona (the “Site”) discussed below.
The Site was operated by UniDynamics/Phoenix, Inc. (“UPI”), which became an indirect subsidiary of the Company in 1985 when the Company acquired UPI’s parent company UniDynamics Corporation. UPI manufactured explosive and pyrotechnic compounds, including components for critical military programs, for the U.S. government at the Site from 1962 to 1993, under contracts with the Department of Defense and other government agencies and certain of their prime contractors. No manufacturing operations have been conducted at the Site since 1994. The Site was placed on the National Priorities List in 1983, and is now part of the Phoenix-Goodyear Airport North Superfund site. In 1990 the Environmental Protection Agency (“EPA”) issued administrative orders requiring UPI to design and
16
PART I
Item 3. Legal Proceedings (continued)
carry out certain remedial actions, which UPI has done. Groundwater extraction and treatment systems have been in operation at the Site since 1994. A soil vapor extraction system was in operation from 1994 to 1998, was restarted in 2004, and is currently in operation. Since 1994 the on-site groundwater treatment facility and soil vapor extraction system have removed approximately 36,000 pounds of trichloroethylene (“TCE”) from the soil and groundwater at the Site.
In September 2004, after extensive negotiations regarding the scope of work to be undertaken at the Site after discovery of additional TCE contamination and the detection of perchlorate during routine testing, the Company reached an agreement in principle with the EPA on a work plan for further investigation and remediation activities at the Site. This agreement is expected to be incorporated into a consent decree between the Company and the EPA in the near future. The Company recorded a before-tax charge of $40 million in the third quarter 2004 for the estimated costs through 2014 of further environmental investigation and remediation at the Site, based on this agreement in principle with the EPA.
The investigation, monitoring and remediation activities undertaken by the Company at the Site have cost over $25 million since 1985. In November 2003, the Company and UPI brought suit under Section 113 of the Comprehensive Environmental Response, Compensation and Liability Act against the federal government and several of its agencies for contribution and indemnification for these costs. As investigation and clean-up activities at the Site are expected to continue for a number of years, the Company’s action against the government also seeks contribution with respect to future costs. Although the Company has been in discussions with the government concerning these claims, the government to date has not agreed to commit to paying any contribution to clean-up costs at the Site. In 2003, the EPA submitted to the Company a claim for approximately $2.8 million in past costs allegedly incurred at the Site, and the Company has requested and is reviewing the EPA’s supporting documentation of these costs. In January 2005, the EPA advised the Company that a formal demand for an additional $4.1 million in EPA past costs should be expected by the Company.
On July 8, 2004, the Environment & Natural Resources Division of the U.S. Department of Justice filed a lawsuit against the Company and UPI seeking reimbursement of the $2.8 million in alleged costs. The government’s action also seeks an injunction requiring UPI to comply with the terms of two earlier administrative orders; entry of a declaratory judgment regarding the Company’s and UPI’s liabilities; and both civil penalties and punitive damages. On February 22, 2005 the Company’s action and the government’s action were consolidated into one case in U.S. District Court in Phoenix, Arizona. The Company has instructed its attorneys to continue to vigorously pursue the Company’s claim against the government, and to defend the counter-suit by the Department of Justice, with the objective of reaching a fair and reasonable allocation of liability for past and future costs in the context of a prudent and scientifically sound plan for the further investigation and clean-up of the Site. The Company does not believe that the ultimate liability for costs to be incurred in connection with the Site will have a material effect on the Company’s financial condition or cash flows; however, there can be no assurance that such costs will not have a material adverse effect on the Company’s results of operations in any given period.
A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters. While the outcome of litigation cannot be predicted with certainty, and some of these other lawsuits, claims or proceedings may be determined adversely to the Company, the Company does not believe that the disposition of any such other pending matters is likely to have a material legal
proceedings, other than ordinary routine litigation incidental to their
businesses.

Item 4. Submissionadverse effect on its financial condition or liquidity, although the resolution in any reporting period of Matters toone or more of these matters could have a Votematerial adverse effect on the Company’s results of Security Holders

operations for that period.
17
PART I
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth quarter of 1999.

PART I (continued)

2004.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name
Position
Business Experience During
Past Five Years
Age
Officer
Since
Eric C. Fast President, Chief Executive Officer and Acting Chief Financial Officer President and Chief Executive
Officer of the Company since April 2001, Acting Chief Financial Officer since February 2004. President and Chief Operating Officer from September 1999 to April 2001. 55 1999
Gil A. Dickoff Treasurer Treasurer of the Company since 1992. 43 1992
Augustus I. duPont Vice President,
General Counsel Vice President, General Counsel and Secretary of the Company since 1996. 53 1996
Elise M. Kopczick Vice President,
Human Resources Vice President, Human Resources of the Company since January 2001. Previously, President of the Company’s Lear Romec division from August 1999 to January 2001. 51 2001
Max H. Mitchell Vice President, Operational Excellence Vice President, Operational Excellence of the Company since March 2004. Previously, Senior Vice President of Global Operations for the Pentair Tool Group from 2001 to 2004 and various operations positions at Danaher Corporation from 1996-2001 (Vice President of Operations and General Manager – Veeder Root, 2001; Director of Operations – Matco Tools, 1998-2001; Manager DBS, 1997-1998; and Vice President Operations – Joslyn Hi-Voltage, 1996). 41 2004
Joan Atkinson Nano Vice President and
Controller Vice President and Controller of the Company since November 2001. Previously, Director of New Controllership Initiatives at GE Capital Corporation (financial services) from 2000 to 2001 and Director, Worldwide Planning and Analysis of Pitney Bowes Corporation (business machines and services) from 1994 to 1999 and as Assistant Corporate Controller from 1988 to 1994. 49 2001
18
EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the registrant are as follows:

(Continued)
Name
Position
Business Experience During
Past Five Years
Age
Officer
Since
Thomas M. Noonan Vice President, Taxes Vice President, Taxes of the Company since November 2001. Vice President, Controller and Chief Tax Officer of the Company from April 2000 to November 2001, Vice President, Taxes of the Company from September 1999 to April 2000. 50 1999
Anthony D. Pantaleoni Vice President, Environment Health and Safety Vice President, Environment Health and Safety of the Company since 1989. 50 1989
PART II

Officer
Name Position Business Experience Age Since
- ------------------------ -------- ------------------- --- -------

Robert S. Evans ChairmanItem 5. Market for the Registrant’s Common Equity and Chief Chairman and Chief 55 1974
Executive Officer Executive Officer of the company
since 1984 and previously
President of the company

Eric C. Fast President and President and Chief Operating 50 1999
Chief Operating Officer, previously Co-head of Global
Officer Investment Banking of Salomon Smith
Barney and a Managing Director of that
firm

Augustus I. duPont Vice President, Vice President and General 48 1996
General Counsel Counsel and Secretary of
and Secretary the company, previously Vice
President, General Counsel and
Secretary of Reeves Industries, Inc.,*
a manufacturer of apparel textiles
and industrial coated fabrics, from
May 1994 to December 1995

Bradley L. Ellis Vice President- Vice President - Chief 31 1997
Chief Information Information Officer of the
Officer company since July 1997, previously
with the Business Systems consulting
group of Arthur Andersen LLP, an
international provider of auditing and
business consulting services

John R. Packard Vice President- Vice President- Human 45 1999
Human Resources Resources of the company since
January 1999, previously Human
Resources Director for Fortune
Brands, Inc., a diversified consumer
products company

Anthony D. Pantaleoni Vice President- Vice President - Environment, 45 1989
Environment, Health & Safety of the company
Health & Safety

Michael L. Raithel (1) Vice President- Vice President - Finance 52 1985
Finance and Chief and Chief Financial Officer
Financial Officer and Controller of the company,
previously Vice President - Controller
of the company

(1) Effective February 18, 2000
Related Stockholder Matters

PART I (continued)
EXECUTIVE OFFICERS OF THE REGISTRANT(continued)

Officer
Name Position Business Experience Age Since
- ------------------------ -------- ------------------- --- -------

Thomas M. Noonan Vice President- Vice President - Taxes since 45 1999
Taxes September 1999, previously Director
of Taxes of the company from March
1996 to September 1999, previously
Director of Taxes and Tax Counsel,
Loctite Corporation, a manufacturer of
sealants, adhesives and coatings

Gil A. Dickoff Treasurer Treasurer of the company, 38 1992
previously Assistant Treasurer
of the company

Certain Proceedings
- -------------------
* Reeves Industries, Inc., a corporation which Mr.duPont served as Vice
President, General Counsel and Secretary from May 1994 to December 1995,
filed a petition and Plan of Reorganization for a consensual debt
restructuring under Chapter 11 of the United States Bankruptcy Code on
November 21, 1997.

PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.

The information required by Item 55(a) and 5(b) is hereby incorporated by reference to Pages 35 through 37pages 72 and 75 of the 19992004 Annual Report to Shareholders. The information required by Item 6. Selected Financial Data.
5(c) is not applicable as the Company did not repurchase any shares during the fourth quarter of 2004.
Item 6. Selected Financial Data.
The information required by Item 6 is hereby incorporated by reference to Pages 35page 72 of the 19992004 Annual Report to Shareholders.

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information required by Item 7 is hereby incorporated by reference to Pages 6pages 22 through 1441 and pages 64 through 69 of the 19992004 Annual Report to Shareholders.

Item 7A. Quantitative and Qualitative Disclosures about Market Risks.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
The information required by Item 7A is hereby incorporated by reference to Page 34page 41 of the 19992004 Annual Report to Shareholders.

Item 8. Financial Statements and Supplementary Data.

Item 8. Financial Statements and Supplementary Data.
The information required by Item 8 is hereby incorporated by reference to Pages 15pages 42 through 3560 and page 72 of the 19992004 Annual Report to Shareholders.

Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None
19
PART II (Continued)
Item 9A. Controls and Procedures
Evaluation of disclosure controls and Disagreements with Accountants on Accounting andprocedures. The Company’s Chief Executive Officer (who currently serves as Acting Chief Financial Disclosure
None

PART III

Item 10. Directors and Executive OfficersOfficer) evaluated the effectiveness of the Registrant

design and operation of its disclosure controls and procedures as of the end of the year covered by this annual report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based on this evaluation, the Company’s Chief Executive Officer has concluded that these controls are effective as of the end of the year covered by this annual report.
As previously disclosed, the Company’s Chief Executive Officer, Eric C. Fast, served as Acting Chief Financial Officer during the medical leave of absence of George S. Scimone, Vice President, Finance and Chief Financial Officer. Mr. Scimone passed away on February 22, 2005 and the Company plans to hire a new chief financial officer.
Change in Internal Controls.During the fiscal quarter ended December 31, 2004, there have been no changes in the Company’s internal control over financial reporting, identified in connection with our evaluation thereof, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The remaining information required by Item 9A is hereby incorporated by reference to pages 62 and 63 of the 2004 Annual Report to Shareholders.
Item 9B. Other Information
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10 is incorporated by reference to the definitive proxy statement dated February 28, 2000,March 11, 2005, which the companyCompany has filed with the Commission pursuant to Regulation l4A except that such information with respect to Executive Officers of the Registrant is included, pursuant to Instruction 3, paragraph (b) of Item 401 of Regulation S-K, under Part I.

PART III (continued)

Item 11. Executive
The Company’s Corporate Governance Guidelines, its charters for its Management Organization and Compensation Committee, its Nominating and Governance Committee and its Audit Committee and its Code of Ethics are available at www.craneco.com/investors/corporate_governance.cfm.
Item 11. Executive Compensation
The information required by Item 11 is incorporated by reference to the definitive proxy statement dated February 28, 2000,March 11, 2005, which the companyCompany has filed with the Commission pursuant to Regulation l4A.

Item 12. 14A.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Except the information required by Section 201(d) of Certain Beneficial Owners and Management

TheRegulation S-K which is set forth below, the information required by Item 12 is incorporated by reference to the definitive proxy statement dated February 28, 2000,March 11, 2005, which the companyCompany has filed with the Commission pursuant to Regulation 14A.

Item 13. Certain Relationships and Related Transactions

20
PART III (Continued)
Equity Compensation Plan Information
Number of securities
to be issued upon
exercise of
outstanding options
Weighted average
exercise price of
outstanding options
Number of securities
remaining available
for future issuance
under equity
compensation plans
Equity compensation plans approved by security holders
2004 Stock Incentive Plan 6,133,267 $ 25.52 3,680,023
2000 Non-employee Director Stock Compensation Plan 179,500 24.80 194,323
Equity compensation plans not approved by security holders — — —
Total 6,312,767 $ 25.50 3,874,346
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is incorporated by reference to the definitive proxy statement dated February 28, 2000,March 11, 2005, which the companyCompany has filed with the Commission pursuant to Regulation 14A.
Item 14. Principal Accountant Fees and Services
The information required by Item 14 is incorporated by reference to the definitive proxy statement dated March 11, 2005, which the Company has filed with the Commission pursuant to Regulation 14A.
PART IV

Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K

(a)(1) The consolidated balance sheets of Crane Co. and subsidiaries as of
December 31, 1999 and 1998 and the related consolidated statements of
income, changes in common shareholders' equity and cash flows for the
years ended December 31, 1999, 1998 and 1997 and the report
Item 15. Exhibits and Financial Statement Schedules
(a) (1) The consolidated balance sheets of Crane Co. and subsidiaries as of December 31, 2004 and 2003 and the related consolidated statements of operations, changes in common shareholders’ equity and cash flows for the years ended December 31, 2004, 2003 and 2002 appearing on pages 42 through 60 and the reports thereon of Deloitte & Touche LLP dated February 18, 2005 appearing on pages 62 and 63 of Crane Co.’s 2004 Annual Report to Shareholders which will be furnished with the definitive proxy statement as required by Regulation 14A, Rule 14a-3(c), are incorporated herein by reference.
(2) The following report and schedule should be read in connection with Crane Co.’s consolidated financial statements in the 2004 Annual Report to Shareholders:
Report of Deloitte & Touche LLP dated January 20, 2000 appearingFebruary 18, 2005 on Pages 15
through 29 of Crane Co.'s 1999 Annual Report to Shareholders which will
be furnished with the company's proxy’s financial statement schedule filed as required by Regulation
14A, Rule 14a-3(c), are incorporated herein by reference

(2) Financial statement schedules for which provision is made in the
applicable regulation of the Securitiespart hereof.
Schedule II – Valuation and Exchange Commission have been
omitted because they are not required under related instructions or are
inapplicable, or the information is shown in the financial statements and
related notes.

(3) Exhibits: Exhibit 3A Certificate of Incorporation, as amended on May
25, 1999.
Exhibit 3B By-laws, as amended on January 24, 2000.
Exhibit 11 Computation of net income per share.
Exhibit 13 Annual Report to shareholders for the year ended
December 31, 1999.
Exhibit Qualifying Accounts
21 Subsidiaries of the Registrant.
Exhibit 23 Independent auditors' consent.
(b) Reports on Form 8-K:
Filed 10/21/1999 The Company filed a Current Report on Form 8-K,
reporting on Item 5 thereof, the unaudited pro forma consolidated
balance sheet of the Registrant as of June 30, 1999 and the
unaudited pro forma consolidated statements of income for the
six-month period ended June 30, 1999 and for the year ended December
31, 1998. These pro forma financial statements reflect the pro
forma impact of the Huttig Building Products, Inc. spin-off.

Filed 12/23/1999 The Company filed a Current Report on Form 8-K,
reporting on Item 2 thereof, that on November 17, 1999, Crane
received a tax ruling from the IRS that the spin-off of Huttig would
be tax-free to Crane and its shareholders. On December 16, 1999,
Crane distributed all of the outstanding common stock of Huttig to
its shareholders of record as of the close of business on December
8, 1999.

16
PART IV (continued)

Item 14.
Item 15. Exhibits and Financial Statement Schedules (Continued)
(3)Exhibits Financial Statement Schedules, and Reports on Form 8-K
(continued)

(c) Exhibits to Form 10-K:
(3) (a) The company's Certificate of Incorporation, as amended on May
25, 1999 (filed herewith as Exhibit 3A).
(b The company's By-Laws, as amended on January 24, 2000 (filed
herewith as Exhibit 3B).

(4) Instruments Defining the Rights of Security Holders, including
Indentures:
(a)
Exhibit No.
Description
Exhibit 10.1 Crane Co. Retirement Plan for Non-Employee Directors
Exhibit 10.2 Time Sharing Agreement
Exhibit 11 Computation of net income per share
Exhibit 13 Selected portions of the Annual Report to Shareholders for the year ended December 31, 2004
Exhibit 21 Subsidiaries of the Registrant
Exhibit 23 Consent of Independent Registered Public Accounting Firm
Exhibit 31.1 Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
(b) Exhibits to Form 10-K
There is incorporated by reference herein:
(1) Preferred Share Purchase Rights Agreement contained in
Exhibit 1 to the company's Report on Form 8-K filed with
the Commission on July 6, 1998.
(b)
(3) (a) The Company’s Certificate of Incorporation, as amended on May 25, 1999 contained in Exhibit 3A to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
(b) The Company’s By-Laws, as amended on January 24, 2000 contained in Exhibit 3B to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
(4) Instruments Defining the Rights of Security Holders, including
Indentures:
(a) There is incorporated by reference herein:
(1) Preferred Share Purchase Rights Agreement contained in Exhibit 1 to the Company’s Report on Form 8-K filed with the Commission on July 6, 1998.
(b) There is incorporated by reference herein:
1) Indenture dated as of April 1,1991 between the Registrant and the Bank of New York contained in Exhibit 4.1 to the Company’s report on Form 8-K filed with the Commission on September 16, 1998.
2) Note dated September 8, 2003 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on September 8, 2003).
3) Credit Agreement dated as of July 22, 2003, among Crane Co., the Borrowing Subsidiaries party hereto, the Lenders party thereto, and JP Morgan Chase Bank, as Administrative Agent (incorporated by reference to the Company’s Current Report on Form 8-K filed August 29, 2003).
22
PART IV
Item 15. Exhibits and Financial Statement Schedules (Continued)
4) Credit Agreement dated as of January 21, 2005 among Crane Co., the Borrowing Subsidiaries party hereto, the Lenders party thereto, and JP Morgan Chase Bank, N.A. as Administrative Agent (incorporated by reference to the Company’s Current Report on Form 8-K filed January 24, 2005).
(10) Material Contracts:
(iii) Compensatory Plans
There is incorporated by reference herein:
1) Indenture dated as of April 1,1991 between the Registrant
and the Bank of New York contained in Exhibit 4.1 to the
company's report on Form 8-K filed with the Commission on
September 16, 1998.

(10)Material Contracts:
(iii)Compensatory Plans
There is incorporated by reference herein:
(a) The forms of Employment/Severance Agreement between the company
and certain executive officers (form I) and (form II) which
provide for the continuation of certain employee benefits upon
a change of control as contained in Exhibit C of the company's
annual report on Form 10-K for the fiscal year ended December
31, 1994.
(b) The E.V.A. incentive compensation plan contained in Exhibit B
to the company's annual report on Form 10-K for the fiscal year
December 31, 1994.
(c) The indemnification agreements entered into with each director
and executive officer of the company, the form of which is
contained in Exhibit C to the company's definitive proxy
statement filed with the Commission in connection with the
company's April 27, 1987 Annual Meeting.
(d) The Crane Co. Retirement Plan for Non-Employee Directors
contained in Exhibit E to the company's Annual Report on Form
10-K for the fiscal year ended December 31, 1988.
(e) The Crane Co. 1998 Stock Option Plan contained in Exhibit 4.1
to the company's Registration Statement No. 333-50489 on Form
S-8 filed with the Commission on April 20, 1998.
(f) The Crane Co. 1998 Restricted Stock Award Plan contained in
Exhibit 4.1 to the company's Registration Statement No. 333-
50487 on Form S-8 filed with the Commission on April 20, 1998.
(g) The Crane Co. 1998 Non-Employee Director Restricted Stock Award
Plan contained in Exhibit 4.1 to the company's Registration
Statement No. 333-50495 on Form S-8 filed with the Commission
on April 20, 1998.

(a) The forms of Employment/Severance Agreement between the Company and certain executive officers (Form I) and (Form II) which provide for the continuation of certain employee benefits upon a change of control as contained in Exhibit C of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994.
(b) The indemnification agreements entered into with each director and executive officer of the Company, the form of which is contained in Exhibit C to the Company’s definitive proxy statement filed with the Commission in connection with the Company’s April 27, 1987 Annual Meeting.
(c) The Crane Co. Retirement Plan for Non-Employee Directors contained in Exhibit E to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1988. Amended in December 2004 and filed as Exhibit 10.1 of this Form 10-K.
(d) The Crane Co. 1998 Stock Option Plan contained in Exhibit 4.1 to the Company’s Registration Statement No. 333-50489 on Form S-8 filed with the Commission on April 20, 1998.
(e) The Crane Co. 1998 Restricted Stock Award Plan contained in Exhibit 4.1 to the Company’s Registration Statement No. 333-50487 on Form S-8 filed with the Commission on April 20, 1998.
(f) The Crane Co. 1998 Non-Employee Director Restricted Stock Award Plan contained in Exhibit 4.1 to the Company’s Registration Statement No. 333-50495 on Form S-8 filed with the Commission on April 20, 1998.
(g) The Crane Co. 2000 Non-Employee Director Stock Compensation Plan contained in Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
(h) The employment agreement with Eric C. Fast contained in Exhibit 10(j) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000.
(i) The Crane Co. 2001 Stock Incentive Plan contained in Exhibit 10(b) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.
(j) The employment agreement with Robert S. Evans contained in Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, as Amended in Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
23
PART IV
Item 15. Exhibits and Financial Statement Schedules (Continued)
(k) The Crane Co. 2004 Stock Incentive Plan contained in Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
(l) The Crane Co. Corporate EVA Incentive Compensation Plan contained in Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.
All other exhibits are omitted because they are not applicable or the required information is shown elsewhere in this Annual Report on Form 10-K.

17
24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Crane Co.
We have audited the consolidated financial statements of Crane Co. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, and have issued our reports thereon dated February 18, 2005 (which report includes an explanatory paragraph regarding the adoption of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”); such consolidated financial statements and reports are included in your 2004 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Stamford, CT
February 18, 2005
25
CRANE CO. AND SUBSIDIARIES
Annual Report for the Year Ended December 31, 2004
Schedule II - Schedule of Valuation and Qualifying Accounts
(in thousands)
Additions
Description
Balance at
1/1/2004
Amounts
charged to
expense
Amounts
charged to
other
accounts
Deductions
Balance at
12/31/2004
Accounts Receivable $ 7,209 $ 10,643 — $ 10,116 $ 7,736
Non-U.S. and state deferred assets, excluding NOL (s) and credits $ 3,072 $ 16,529 — — $ 19,601
Federal, state and foreign NOL(s) and credits 23,944 1,934 — — 25,878
Total * $ 27,016 $ 18,463 — — $ 45,479
* The above-mentioned valuation allowances are principally an offset to long term deferred tax assets on the consolidated balance sheet.
26
SIGNATURES
Pursuant to the requirements of Section l313 or l515 (d) of the Securities Exchange Act of l934,1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CRANE CO.
-------------------
(Registrant)

By /s/ M. L. Raithel
---------------------------
M. L. Raithel
Vice President-Finance and
Chief Financial Officer and Controller
Date 2/28/00
-------

CRANE CO.
(Registrant)
By /s/ E.C. Fast
E.C. Fast
President, Chief Executive
Officer and Acting Chief
Financial Officer
Date 3/8/05
Pursuant to the requirements of the Securities Exchange Act of l934,1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
OFFICERS

/s/ R. S. Evans
------------------------
R. S. Evans
Chairman and Chief Executive Officer and a Director
Date 2/28/00
-------

/s/ E. C. Fast /s/ M. L. Raithel
----------------------------- ---------------------------
E. C. Fast M. L. Raithel
President and Chief Vice President-Finance and
Operating Officer and a Director Chief Financial Officer and Controller
(Principal Financial Officer and
Principal Accounting Officer)
Date 2/28/00 Date 2/28/00
------- -------

By /s/ E.C. Fast By /s/ J.A. Nano
E.C. Fast J.A. Nano
President, Chief Executive Officer, Vice President, Controller
Acting Chief Financial Officer and a (Principal Accounting Officer)
Director (Principal Executive Officer Date 3/8/05
and Financial Officer)
Date 3/8/05
DIRECTORS

/s/ E. T. Bigelow, Jr. /s/ R. S. Forte
----------------------- ----------------------
E. T. Bigelow, Jr. R. S. Forte
Date 2/28/00 Date 2/28/00
------- -------

/s/ D.R. Gardner /s/ J. J. Lee /s/
- ----------------------- ----------------------- ----------------------
D.R. Gardner J. J. Lee W. E. Lipner
Date 2/28/00 Date 2/28/00 Date 2/28/00
------- ------- -------

/s/ D. C. Minton /s/ C. J. Queenan, Jr. /s/
- ----------------------- ----------------------- ----------------------
D. C. Minton C. J. Queenan, Jr. J. L. L. Tullis
Date 2/28/00 Date 2/28/00 Date 2/28/00
------- ------- -------

Officer Name Position Business Experience Age Since - ------------------------ -------- ------------------- --- ------- ~~Robert S. Evans Chairman~~
Item 5.	Market for the Registrant’s Common Equity and Chief Chairman and Chief 55 1974 Executive Officer Executive Officer of the company since 1984 and previously President of the company Eric C. Fast President and President and Chief Operating 50 1999 Chief Operating Officer, previously Co-head of Global Officer Investment Banking of Salomon Smith Barney and a Managing Director of that firm Augustus I. duPont Vice President, Vice President and General 48 1996 General Counsel Counsel and Secretary of and Secretary the company, previously Vice President, General Counsel and Secretary of Reeves Industries, Inc.,* a manufacturer of apparel textiles and industrial coated fabrics, from May 1994 to December 1995 Bradley L. Ellis Vice President- Vice President - Chief 31 1997 Chief Information Information Officer of the Officer company since July 1997, previously with the Business Systems consulting group of Arthur Andersen LLP, an international provider of auditing and business consulting services John R. Packard Vice President- Vice President- Human 45 1999 Human Resources Resources of the company since January 1999, previously Human Resources Director for Fortune Brands, Inc., a diversified consumer products company Anthony D. Pantaleoni Vice President- Vice President - Environment, 45 1989 Environment, Health & Safety of the company Health & Safety Michael L. Raithel (1) Vice President- Vice President - Finance 52 1985 Finance and Chief and Chief Financial Officer Financial Officer and Controller of the company, previously Vice President - Controller of the company (1) Effective February 18, 2000 Related Stockholder Matters

/s/ R.S. Evans

/s/ E.T. Bigelow, Jr.

/s/ K.E. Dykstra

R.S. Evans

E.T. Bigelow, Jr.

K. E. Dykstra

Date

2/28/05

Date

2/28/05

Date

2/28/05

/s/ R.S. Forté

/s/ D.R. Gardner

/s/ J. Gaulin

R.S. Forté

D.R. Gardner

J. Gaulin

Date

2/28/05

Date

2/28/05

Date

2/28/05

/s/ W.E. Lipner

/s/ C.J. Queenan, Jr.

W.E. Lipner

D.C. Minton

C.J. Queenan, Jr.

Date

2/28/05

Date

2/28/05

Date

2/28/05

/s/ J.L.L. Tullis

J.L.L. Tullis

Date

2/28/05

Exhibit Index


Exhibit No.		Description

Exhibit 10.1		Crane Co. Retirement Plan for Non-Employee Directors

Exhibit 10.2		Time Sharing Agreement

Exhibit 11		Computation of net income per share

Exhibit 13		Selected portions of the Annual Report to Shareholders for the year ended December 31, 2004

Exhibit 21		Subsidiaries of the Registrant

Exhibit 23		Consent of Independent Registered Public Accounting Firm

Exhibit 31.1		Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to Rule 13a-14(a) and 15d- 14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1		Certification of Chief Executive Officer and Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002


100 First Stamford Place, Stamford, CT		06902
(Address of principal executive offices)		(Zip Code)


Title of each class		Name of each exchange on which registered
Common Stock, par value $1.00		New York Stock Exchange
Preferred Share Purchase Rights		New York Stock Exchange


Total Manufacturing Facilities	Number	Area (sq. ft.)
Aerospace & Electronics
United States	12	1,095,000
International	3	74,000
Engineered Materials
United States	8	558,000
International	1	31,000
Merchandising Systems
United States	1	463,000
International	2	138,000
Fluid Handling
United States	15	1,625,000
International	24	3,168,000
Controls
United States	4	181,000
International	1	27,000


Leased Manufacturing Facilities	Leases Expiring Through	Number	Area (sq. ft.)
United States	2009	13	523,000
Other International	2016	10	771,000


	Year Ended December 31,
	2004		2003		2002
Beginning claims	68,606		54,038		16,180
New claims	18,932		19,115		49,429
Settlements	(1,038	)	(3,883	)	(11,299	)
Dismissals	(1,523	)	(664	)	(272	)

Ending claims *	84,977		68,606		54,038


	Year Ended December 31,						Cumulative to date through December 31, 2004
(In millions)	2004		2003		2002		Cumulative to date through December 31, 2004
Settlement costs (1)	$	17.2	$	11.9	$	7.3	$	38.8
Defense costs (1)		23.7		9.2		4.8		46.0

Total costs		40.9		21.1		12.1		84.8
Pre-tax cash payments(2)		20.2		7.9		2.4		31.8


Name	Position	Business Experience During Past Five Years	Age	Officer Since
Eric C. Fast	President, Chief Executive Officer and Acting Chief Financial Officer	President and Chief Executive Officer of the Company since April 2001, Acting Chief Financial Officer since February 2004. President and Chief Operating Officer from September 1999 to April 2001.	55	1999

Gil A. Dickoff	Treasurer	Treasurer of the Company since 1992.	43	1992

Augustus I. duPont	Vice President, General Counsel	Vice President, General Counsel and Secretary of the Company since 1996.	53	1996

Elise M. Kopczick	Vice President, Human Resources	Vice President, Human Resources of the Company since January 2001. Previously, President of the Company’s Lear Romec division from August 1999 to January 2001.	51	2001

Max H. Mitchell	Vice President, Operational Excellence	Vice President, Operational Excellence of the Company since March 2004. Previously, Senior Vice President of Global Operations for the Pentair Tool Group from 2001 to 2004 and various operations positions at Danaher Corporation from 1996-2001 (Vice President of Operations and General Manager – Veeder Root, 2001; Director of Operations – Matco Tools, 1998-2001; Manager DBS, 1997-1998; and Vice President Operations – Joslyn Hi-Voltage, 1996).	41	2004

Joan Atkinson Nano	Vice President and Controller	Vice President and Controller of the Company since November 2001. Previously, Director of New Controllership Initiatives at GE Capital Corporation (financial services) from 2000 to 2001 and Director, Worldwide Planning and Analysis of Pitney Bowes Corporation (business machines and services) from 1994 to 1999 and as Assistant Corporate Controller from 1988 to 1994.	49	2001


	Number of securities to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders
2004 Stock Incentive Plan	6,133,267	$	25.52	3,680,023
2000 Non-employee Director Stock Compensation Plan	179,500		24.80	194,323
Equity compensation plans not approved by security holders	—		—	—

Total	6,312,767	$	25.50	3,874,346


			Additions
Description	Balance at 1/1/2004		Amounts charged to expense		Amounts charged to other accounts	Deductions		Balance at 12/31/2004
Accounts Receivable	$	7,209	$	10,643	—	$	10,116	$	7,736

Non-U.S. and state deferred assets, excluding NOL (s) and credits	$	3,072	$	16,529	—		—	$	19,601
Federal, state and foreign NOL(s) and credits		23,944		1,934	—		—		25,878

Total *	$	27,016	$	18,463	—		—	$	45,479


		CRANE CO.
		(Registrant)

By		/s/ E.C. Fast
		E.C. Fast
		President, Chief Executive Officer and Acting Chief Financial Officer Date 3/8/05



By	/s/ E.C. Fast	By	/s/ J.A. Nano
	E.C. Fast		J.A. Nano
	President, Chief Executive Officer,		Vice President, Controller
	Acting Chief Financial Officer and a		(Principal Accounting Officer)
	Director (Principal Executive Officer		Date 3/8/05
	and Financial Officer)
	Date 3/8/05