1

Crane Co.Crane Co.

Gabelli Asset ManagementGabelli Asset Management12th Annual Aircraft Supplier Conference12th Annual Aircraft Supplier Conference

September 7, 2006September 7, 2006

J. Robert Vipond

Vice President & CFO

Crane Co.

2

Forward-Looking Statements Forward-Looking Statements DisclaimerDisclaimer

This presentation includes forward-looking statements that are by

their very nature uncertain. There can be no guarantee that any

forward-looking statement will be fulfilled. The Company assumes no

obligation to update forward-looking statements to reflect actual

results or changes in or additions to the factors affecting such

forward-looking statements. Reference is made to the Company’s

Annual Report on Form 10-K and subsequent reports filed with the

Securities and Exchange Commission for additional information

involving known and unknown risks, uncertainties and other factors.

Please also refer to the full forward-looking statements disclaimer

contained in the Company’s Form 10-K and subsequent reports filed

with the Securities and Exchange Commission.

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Overview Overview

Diversified manufacturer of highly engineered products- Focused niche markets which we dominate- Businesses high returns and cash flow- Acquisitions to strengthen existing businesses

Above all conduct business with integrity and honest dealings

Transitioning from Holding Co. to Operating Co. to

accelerate EVA Growth

Our Goal is to build shareholder wealth

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Strategy for Profitable GrowthStrategy for Profitable Growth

Materially Improving Operations• Leveraging Intellectual Capital• Improving Customer Focus• Executing Operational Excellence

Strategic Linkages• Portfolio Trimming• Internal Mergers

Synergistic Acquisitions• 2001 - $197 Million – 6 transactions• 2002 - $82 Million – 7 transactions• 2003 - $169 Million – 4 transactions• 2004 - $51 Million – 2 transactions• 2005 - $9 Million – 2 transactions• 2006 - $162 Million – 3 transactions

Grow Profits from Existing Operations

Redeploy Free Cash Flow for Acquisitions

Integrated Operating Company

Strengthen Existing Business Units

Noble Composites pending Hart-Scott- Rodino

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Gating ChartGating Chart

Financial Consistency

Customer Metrics

Profitable Sales Growth

Aerospace

Electronics

FluidHandling

MerchSystems

EngineeredMaterials Controls

0 100 200 300 400 500

3Q2005

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Fluid Handling

Engineered Materials

Aerospace & Electronics

Merchandising Systems

Controls

Fluid Handling

Engineered Materials

Aerospace & Electronics

Controls

Merchandising Systems

2001($197 million)

1%

19%50%

17% 13%

Note: Pie charts show relative business unit contribution before corporate expenses.

2005 ($214 Million)

31%

35%

25%

3%6%

Business Segments Operating ProfitBusiness Segments Operating Profit

Better Portfolio BalanceBetter Portfolio Balance

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Crane Co.Crane Co.

Operating Profit

155169

186

214

238

$0

$50

$100

$150

$200

$250

'02 '03 '04 '05 '06*

Sales

1,516

1,636

1,890

2,061

2,150

$1,000$1,100

$1,200$1,300

$1,400$1,500$1,600

$1,700$1,800$1,900

$2,000$2,100

$2,200$2,300

'02 '03 '04 '05 '06*

($ in millions)

• Operating profit before the 2004 net non-cash charges for asbestos and environmental and for 2002 before asbestos charge.

* Dec. ‘05 Guidance

**

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2006 Guidance2006 Guidance

Crane Co. estimates for sales, operating profit and margin % provided in Dec. ’05

Crane Co. estimates for tax rate and EPS updated in July ’06.

•Operating profit before asbestos and environmental charge and Victaulic gain. For further details see non-GAAP reconciliation that accompanied our March 7, 2006 investor presentation on Crane Co. website at www.craneco.com.

2004* 2005 2006E $ %

Sales $1,890 $2,061 $2,150 89 4%Operating Profit 186 214 238 24 11% % to Sales 9.9% 10.4% 11.0% Tax Rate 31% 31% 31 - 32%

EPS / EPS Guidance $1.98 $2.25 $2.60-2.70

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1H’06 Results1H’06 Results

($ Millions) '06 vs. '051H'05 1H'06 $ %

Sales $1,033 $1,108 $75 7%Operating Profit 97 123 $26 27% % to Sales 9.4% 11.1% Tax rate 30.9% 31.5%EPS $1.01 $1.32

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2006 Guidance Free Cash Flow2006 Guidance Free Cash Flow

($ Millions) 2004 2005 2006 E*

Cash Flow from Operations before Asbestos 149$ 217$ 260$

Asbestos Related Payments (1) (38) (36) (45) Cash Flow from Operations 111 181 215

Capital Expenditures (23) (27) (30)

Free Cash Flow (2) 88$ 154$ 185$

(1) Net of insurance reimbursement. Furthermore, 2004 asbestos related payments includes $18M of payments relative to the

Master Settlement Agreement (“MSA”) and in 2005 includes a net receipt of funds of $5M relative to the termination of the MSA.

(2) Free cash flow guidance was raised from $165 to $185 million in April '06

* Crane Co. estimate April ‘06

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CapitalizationCapitalization

FY'03 FY'04 FY'05 06/30/06Debt 396 297 294 294$ Shareholder Equity 786 664 753 862$ Total Capital 1,182$ 961$ 1,047$ 1,156$

Total Debt % of Total Cap 34% 31% 28% 25%

($ in millions)

•12/31/05 Cash $180 million

•6/30/06 Cash $100 million

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2006 Capital Deployment 2006 Capital Deployment

Crane Co.Asbestos Liability

- Recent trends more stable

$100 M of Cash at 6/30/06

Rating Agencies- Stable BBB Baa-2

$185 M ’06 Free Cash Flow

Shareholders- Dividends

- Acquisitions

- Stock Repurchases

Redeploy Capital to Accelerate GrowthRedeploy Capital to Accelerate Growth

$294 M of Debt - 25% of Capital at 6/30/06

•Quarterly dividend increased 20% in July 2006•2006 acquisitions $162 million•In 1H’06, repurchased 636,300 shares for $25 million

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2006 Summary2006 Summary

Profit Growth From Existing Operations

Strengthened Management Teams

Strategic Acquisitions for Core Business

Operational Excellence Traction

Late Economic Cycle Exposure

Expect To Surpass 2005 Record EPS

Redeploy Capital to Accelerate Growth

$100M of Cash at 6/30/06 $185 M ’06 Free Cash Flow $294 M of Debt: 25% of Capital at 6/30/06

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Gabelli Aircraft Supplier ConferenceGabelli Aircraft Supplier ConferenceCrane Co. (CR)Crane Co. (CR)

Crane AerospaceCrane AerospaceSeptember 7, 2006September 7, 2006

Gregory A. Ward

President

Crane Aerospace Group, Inc.

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Crane Aerospace GroupCrane Aerospace Group

$ M's Resource $M's Resource

OEM 4 2A/M 2 3M&UPlanned M&U

Totals 6

North America 2005 2010

2005 Sales $339M No. of Employees 1,450 Mfg Space 478,800 sq ft Global Business 30+ countries

Our 4 Brands: ELDEC - Hydro-Aire - Lear Romec – P.L. Porter

Lynnwood, WA

Burbank, CA

Wichita, KS

Elyria, OHLyon, France

Two plant consolidations

completed

Divested

Resistoflex

2006

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Products and SolutionsProducts and Solutions

AIRCRAFTELECTRICALPOWER

AIRCRAFTELECTRICALPOWER

CABINCABIN

SENSING/UTILITY SYSTEMSSENSING/UTILITY SYSTEMS

LANDINGSYSTEMSLANDINGSYSTEMS

FLUIDMANAGE-MENT

FLUIDMANAGE-MENT

• Battery Systems• Ground Fault Interrupters (SafeTripTM)• Inverters• Power Management & Distribution Systems• Automatic Transformer Rectifier Units

• Battery Systems• Ground Fault Interrupters (SafeTripTM)• Inverters• Power Management & Distribution Systems• Automatic Transformer Rectifier Units

• Seat Actuation• Lumbar Support• Integrated Control• Power Conversion

• Seat Actuation• Lumbar Support• Integrated Control• Power Conversion

• Lube and Scavenge Pumps• Coolant Pumps and Package Systems • Fuel Boost, Transfer and Jettison Pumps• Fuel Flowmeters / Fuel Gauging Systems

• Lube and Scavenge Pumps• Coolant Pumps and Package Systems • Fuel Boost, Transfer and Jettison Pumps• Fuel Flowmeters / Fuel Gauging Systems

• Brake Control Components and Systems• Hydraulic Equipment• Gear Extension & Retraction Systems• Brake temperature monitoring

• Brake Control Components and Systems• Hydraulic Equipment• Gear Extension & Retraction Systems• Brake temperature monitoring

• Proximity Switches, Sensors, & Systems• Silicon On Sapphire Pressure Sensors• Weight & Balance Systems• Wireless Sensors (incl. SmartStem pressure)

• Proximity Switches, Sensors, & Systems• Silicon On Sapphire Pressure Sensors• Weight & Balance Systems• Wireless Sensors (incl. SmartStem pressure)

Current Products Value PropositionSolutions

Applications engineering excellence (system knowledge), lightest weight, highest value, highest power quality AC-DC power conversion

Applications engineering excellence, superior performance and flexible business models. Industry knowledge and expertise. Extending the life of braking components

Highest reliability, most accurate, and highest value position indication of critical systems such as landing gear, doors, and control surfaces (prox only)

Applications engineering excellence, superior product performance and packaging, fast development times and outstanding product support

Rapid development, on time delivery and use of emerging technology. Customers will pay premiums for passenger comfort and extended passenger services

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OEM Sales MixOEM Sales MixTotal Civil Vs. Military

Sales

Strong Niche Shares

Landing: Brake Control 64% Sensing/Utility: Proximity Sensing 63% Fluid: Pumps 42% Cabin: Seat Actuation 41% Aircraft Electrical Power 30%

OEM Sales

Key Takeaway: Niche products and systems

* 2006E Total Sales

* 2006E OEM Sales

*BFE:Buyer Furnished Equipment

*Civil: Commercial, Regional, Business, BFE

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OEM52%

BFE9%

M&U5%

AFTERMARKET34%

Three Business ModelsThree Business Models

New Buyer Furnished Equipment (BFE) Model

Cabin Solution only Serves both new and fielded fleets Replacement cycle every 5 and 13

years Short development and payback

periods

New Buyer Furnished Equipment (BFE) Model

Cabin Solution only Serves both new and fielded fleets Replacement cycle every 5 and 13

years Short development and payback

periods

Classic OEM - Aftermarket Model All Solutions except Cabin Driven by new platforms Long development cycles Long payback periods

Classic OEM - Aftermarket Model All Solutions except Cabin Driven by new platforms Long development cycles Long payback periods

Modernization & Upgrade (M&U) Model Focused on Operators Cost of

Operations Market based on fielded fleet Shorter development cycles Shorter payback periods

Modernization & Upgrade (M&U) Model Focused on Operators Cost of

Operations Market based on fielded fleet Shorter development cycles Shorter payback periods

2006E Sales Mix OEM (61%) /Aftermarket (39%)

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Market2006 Build Rate

2007 to 2008CAGR

Key Industry Trends

Large Commercial Transports

800+ 4 - 5%World passenger traffic increasing 3-5% annually and driving demand.

Regional Jets 300+ (3 - 4%)50 seat market saturation. Focus is on 70- 100 seat platform for operating efficiencies.

Business Jets 700+ 2 - 3%Global economy sustaining modest demand. New VLJ segment.

Military Aircraft and

Rotorcraft

500+ 3 - 4%

CAGR driven by high mix of rotorcraft & fixed wing fighters. Uncertainty of new platforms like JSF in the out years.

OEM Forecast For The IndustryOEM Forecast For The Industry

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Commercial OEM Summary

2002 2003 2004 2005 2006 2007 2008

0

500

1,000

1,500

2,000

2,500

Bu

ild

Ra

tes

Landing Commercial OEM Sensing Commercial OEM Cabin Commercial OEM Fluid Commercial OEM

AEP Commercial OEM Other Commercial OEM Commercial OEM Build Rate

Strong Civil OEM Growth: 4 - 5% CAGRStrong Civil OEM Growth: 4 - 5% CAGR

Crane civil OEM sales growth consistent with

build rates

Re

ve

nu

e

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2002 2003 2004 2005 2006 2007 2008

Rev

enu

e

-25

25

75

125

175

225

275

325

375

425

Bu

ild

Rat

es

Fluid Military OEM Landing Military OEM Sensing Military OEM AEP Military OEM Military OEM Build Rate

Military OEM Growth: 3 - 4% CAGRMilitary OEM Growth: 3 - 4% CAGR

Build Rate Excludes Helicopters

Crane military OEM sales growth consistent

with build rates

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Aftermarket Industry ForecastAftermarket Industry Forecast

Key Industry Trends:

Robust Commercial Spares and R&O due to aircraft coming out of warranty & Increasing active fleet

• 15,000+ aircraft today

• 3 – 5 % CAGR projected Growing installed base for

Modernization & Upgrade opportunities

More Commercial Initial Provisioning

Key Industry Trends:

Robust Commercial Spares and R&O due to aircraft coming out of warranty & Increasing active fleet

• 15,000+ aircraft today

• 3 – 5 % CAGR projected Growing installed base for

Modernization & Upgrade opportunities

More Commercial Initial Provisioning

# A/C Parked

# A/C In Warranty

# A/C Out of Warranty

0

5,000

10,000

15,000

20,000

25,000

2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

A/C

0

2

4

6

8

10

12

14

16

18

Age

Avg. Aircraft Age

Active Fleet Analysis*

Market Issues: Financial stability of the operators Fuel prices / terrorism / air traffic control Increased use of third-party R&O and

logistics

Market Issues: Financial stability of the operators Fuel prices / terrorism / air traffic control Increased use of third-party R&O and

logistics

Commercial

Aftermarket projected

at 3 - 5% CAGR

for the Industry

* ACAS data

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Operators Need To Modernize and UpgradeOperators Need To Modernize and Upgrade

Large fielded fleet• 15,000+ Civil Aircraft• 30,000+ Military Aircraft (fixed & rotorcraft)

New aircraft• Technology making the A/C more efficient• Difficult for legacy carriers to compete with

newer fleets

Crane focus on adding value to the older aircraft

• Mandated safety items• Systems and components that reduce

operating costs

Operators will pay for added value• M&U tends to equate to better margins

Focused on balancing our Civil / Military mix

• Adding sales force• Investing in Military technology

Commercial M&U65%

Military M&U35%

2006E M&U Mix

Commercial57%

Military43%

2007 – 09E M&U Mix

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New M&U ProductsNew M&U Products

Weight and Balance System• AirWeighs under development

Reduces operator costs New pax & baggage weights driving need Government funded flight demonstration

program pending contract finalization• C-130 Technology Demo completed• Competing for 777 Freighter

Wireless Tire Pressure System• “SmartStem” flying now• In-service evaluation on 777

Reduces operator costs Handheld version

• Contract with Cessna

On Board System• Boeing contract 777• Smiths contract 787

Existing Hydraulic Pump

Existing Reservoi

r

Airplane Hydraulic Pressure

Strut Oil

Strut Gas

Return Pressure

Strut Manifo

ld

Actuator

Isolator

Flight Mgmt System

Control Unit

Sensors & Actuators Interface

Sensors & Actuators Interface

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Crane Aftermarket Growth: 15 – 20% CAGRCrane Aftermarket Growth: 15 – 20% CAGR

2002 2003 2004 2005 2006 2007 2008

Core Af termarket M&U

M&U accelerating our

Aftermarket growth

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Aerospace Market SummaryAerospace Market Summary

Major U.S. Airlines making a modest profit Global airlines continue growth Impact of Oil prices & terror threat still in

question LCC model driving industry changes Steady Aftermarket Sales growth New opportunities due to large fleets

• Modernization & Upgrades

Military business hard to forecast• JSF, Tanker

• Funded upgrades

Increasing OEM Build Rates • Thru 2010

OEM Price Concessions• YOY with Aftermarket pricing limits

Major military platforms in the out years• JSF / UCAV

Many OEM program opportunities• Replace incumbent systems• Airbus A350 XWB• Narrow body replacements• LJs and VLJs• UCAVs

Many M&U opportunities• Military• Civil

Operators OEMs

Key Takeaway: 3-5% CAGR is expected in this changing aerospace market

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So What’s Our Strategy?So What’s Our Strategy?

Balanced Long & Short term EVA Growth

Strategic Issues• High program investments• Intense price pressures• Technical resource shortages

Prioritization of Investments

Commercial

Military

Commercial

Military

Commercial

MilitaryOEM

Aftermarket

M & U

Intellectual Capital and Operational Excellence

MaintainMargins

Everyone, Everywhere

IncreaseOrganicCAGR

Protect & Maintain

All Solutions

• Airline financial health• Increasing build rates• Fuel costs & terror threats

Business Factors

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Protect and Maintain the FranchisesProtect and Maintain the Franchises

Satisfy our customers• Voice of the Customer

• Dedicated team and process• Monthly review and actions• Train the entire workforce

Flawless customer metrics• Responsiveness

• On Time Delivery

• Quality

Satisfied Customers give us:• Follow on core business• New growth opportunities

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Giving our customers more valueGiving our customers more value

Lean is our way of life• Enterprise-wide Operational Excellence

• Structured daily process• Visual controls• All functions

• Centralization of functions and processes• Leverage automation, standard work• Organized by value streams

• Streamlined Organization Structure• Easy to do business with• Right people in the right roles

• Increased productivity

• Low cost sourcing

• Facilities Consolidation

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Reducing Costs & Improving ServiceReducing Costs & Improving Service

Legacy BusinessLegacy Business

4 Business Units w/ P&L

4 Leadership teams

Separate Functional Organizations

Multiple internal & external customer interfaces

Varying strategies & industry knowledge

Unique processes and procedures

4 Business Units w/ P&L

4 Leadership teams

Separate Functional Organizations

Multiple internal & external customer interfaces

Varying strategies & industry knowledge

Unique processes and procedures

One Company ChangeOne Company Change

1 Business Unit (w/ P&L) 1 Leadership team One bonus system

Centralized several functional organizations

Sales & Marketing single face to the customer

Began common ERP system implementation

Group processes and procedures

Common strategic agenda

1 Business Unit (w/ P&L) 1 Leadership team One bonus system

Centralized several functional organizations

Sales & Marketing single face to the customer

Began common ERP system implementation

Group processes and procedures

Common strategic agenda

Organization TransformationOrganization

Transformation

Streamlined organization

Right People, Right Roles

Centralized processesEngineeringQualityProgram Mgmt Infrastructure

Simplified customer interfacesOrder entry

Enterprise-wide OpExSDP, KaizenValue StreamsStandard work

Streamlined organization

Right People, Right Roles

Centralized processesEngineeringQualityProgram Mgmt Infrastructure

Simplified customer interfacesOrder entry

Enterprise-wide OpExSDP, KaizenValue StreamsStandard work

2002

2002 Sales = $257M

Employees = 1,299

Mfg space = 494,000

2002 Sales = $257M

Employees = 1,299

Mfg space = 494,000

2004 Sales = $309M*

Employees = 1,433*

Mfg space = 584,000*

Annual Savings = $7M 2004

(Acquisition of PL Porter)

2004 Sales = $309M*

Employees = 1,433*

Mfg space = 584,000*

Annual Savings = $7M 2004

(Acquisition of PL Porter)

2005 Sales = 9.7% growth

Employees = 10% less SG&A

Mfg space = 27% less 2006

Annual Savings = $5M 2006

(Sold Resistoflex 5/06)

2005 Sales = 9.7% growth

Employees = 10% less SG&A

Mfg space = 27% less 2006

Annual Savings = $5M 2006

(Sold Resistoflex 5/06)

2005

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Investing more in Organic GrowthInvesting more in Organic Growth

Maintain margins while increasing R&D investments• Growing the Core Solutions

• Expanding Solutions with new M&U opportunities

Must Increase engineering capacity• To take advantage of growth opportunities

• Retention of key contributors• Re-recruit the Keepers

• Utilize remote engineering locations

• Greater mix of low cost capacity

Self funded R&D• 2005 - $36M 10% of sales

• 2006F - $43M 12% of sales

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Organic GrowthOrganic GrowthL

on

g-T

erm

Sh

ort

-Ter

m

Segment Issue/Need Strategy

OEM Price Reductions Relentless competition Many new platforms

Win new platforms with flexible business models

Modular and reusable technologies

Niche products, systems

Aftermarket Airline financial health Global support More efficient aircraft

Improve TAT times Increase support

network Reliability of legacy

products

Modernization & Upgrades (M&U)

Shorter Development Cycle

Condensed Delivery Cycle

Airlines need lower operating costs

Airlines ROI = <1yr Can retrofit fleets

quickly

New M&U products and services

Focus on aircraft systems and cabins

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Summary: Stay the CourseSummary: Stay the Course

Our focus remains on • High value niche products

• High margins

• High growth

All five niche Solutions are in high demand• Grow the Solutions by satisfying our customers

• Expand the Solutions with products and systems• That lower operating costs

Accelerate our M&U strategy

Aerospace Group Strategy Delivers:• Franchise protection• High margins • High annual growth

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Thank You.

Questions?

For more information, visit:

www.craneaerospace.com