Crane Aerospace

1

• Crane Co.
• Gabelli Asset Management
• 12th Annual Aircraft Supplier Conference
• September 7 2006

J. Robert Vipond Vice President CFO Crane Co.
2
Forward-Looking Statements Disclaimer

• 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 Companys 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 Companys
  Form 10-K and subsequent reports filed with the
  Securities and Exchange Commission.

3
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

4
Strategy 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
Integrated Operating Company
Redeploy Free Cash Flow for Acquisitions
Strengthen Existing Business Units
Noble Composites pending Hart-Scott- Rodino
5
Gating Chart
6

Better Portfolio Balance
Business Segments Operating Profit
Note Pie charts show relative business unit
contribution before corporate expenses.
7
Crane Co.
( in millions)

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

Dec. 05 Guidance
8
2006 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.

9
1H06 Results
10
2006 Guidance Free Cash Flow
Crane Co. estimate April 06
11
Capitalization
( in millions)

• 12/31/05 Cash 180 million
• 6/30/06 Cash 100 million

12
2006 Capital Deployment
Redeploy Capital to Accelerate Growth
100 M of Cash at 6/30/06
Crane Co.
Asbestos Liability - Recent trends more stable
185 M 06 Free Cash Flow
Rating Agencies - Stable BBB Baa-2
294 M of Debt - 25 of Capital at 6/30/06
Shareholders - Dividends - Acquisitions -
Stock Repurchases

• Quarterly dividend increased 20 in July 2006
• 2006 acquisitions 162 million
• In 1H06 repurchased 636300 shares for 25
  million

13
2006 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

14
Gabelli Aircraft Supplier Conference Crane Co.
(CR) Crane Aerospace September 7 2006
Gregory A. Ward President Crane Aerospace Group
Inc.
15
Crane Aerospace Group
Our 4 Brands ELDEC - Hydro-Aire - Lear Romec
P.L. Porter
Elyria OH
Lyon France
Lynnwood WA
Burbank CA
Divested Resistoflex 2006
Wichita KS

• 2005 Sales 339M
• No. of Employees 1450
• Mfg Space 478800 sq ft
• Global Business 30 countries

Two plant consolidations completed
16
Products and Solutions
Current Products
Value Proposition
Solutions

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

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

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

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

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

Applications engineering excellence superior
product performance and packaging fast
development times and outstanding product support
Applications engineering excellence superior
performance and flexible business models.
Industry knowledge and expertise. Extending the
life of braking components

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

SENSING/ UTILITY SYSTEMS

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

Highest reliability most accurate and highest
value position indication of critical systems
such as landing gear doors and control surfaces
(prox only)
17
OEM Sales Mix
Total Civil Vs. Military Sales
OEM Sales
2006E Total Sales
2006E OEM Sales
Civil Commercial Regional Business BFE
BFEBuyer Furnished Equipment

• Strong Niche Shares
• Landing Brake Control 64
• Sensing/Utility Proximity Sensing 63
• Fluid Pumps 42
• Cabin Seat Actuation 41
• Aircraft Electrical Power 30

Key Takeaway Niche products and systems
18
Three Business Models

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

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

• 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

• Modernization Upgrade (MU) Model
• Focused on Operators Cost of Operations
• Market based on fielded fleet
• Shorter development cycles
• Shorter payback periods

19
OEM Forecast For The Industry
20
Strong Civil OEM Growth 4 - 5 CAGR
Crane civil OEM sales growth consistent with
build rates
Revenue
21
Military OEM Growth 3 - 4 CAGR
Crane military OEM sales growth consistent with
build rates
Build Rate Excludes Helicopters
22
Aftermarket Industry Forecast
Active Fleet Analysis

• Key Industry Trends
• Robust Commercial Spares and RO due to aircraft
  coming out of warranty Increasing active fleet
• 15000 aircraft today
• 3 5 CAGR projected
• Growing installed base for Modernization
  Upgrade opportunities
• More Commercial Initial Provisioning

ACAS data
Commercial Aftermarket projected at 3 - 5 CAGR
for the Industry

• Market Issues
• Financial stability of the operators
• Fuel prices / terrorism / air traffic control
• Increased use of third-party RO and logistics

23
Operators Need To Modernize and Upgrade

• Large fielded fleet
• 15000 Civil Aircraft
• 30000 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
• MU tends to equate to better margins
• Focused on balancing our Civil / Military mix
• Adding sales force
• Investing in Military technology

2006E MU Mix
2007 09E MU Mix
24
New MU 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

25
Crane Aftermarket Growth 15 20 CAGR
MU accelerating our Aftermarket growth
26
Aerospace Market Summary
Operators
OEMs

• 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 MU opportunities
• Military
• Civil

Key Takeaway 3-5 CAGR is expected in this
changing aerospace market
27
So Whats Our Strategy
Strategic Issues
Business Factors

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

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

Increase Organic CAGR
Maintain Margins
Protect Maintain All Solutions
Intellectual Capital and Operational Excellence
Everyone Everywhere
Commercial
Commercial
Commercial
Aftermarket
M U
OEM
Military
Military
Military
Prioritization of Investments
Balanced Long Short term EVA Growth
28
Protect 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

29
Giving 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

30
Reducing Costs Improving Service
Legacy Business
One Company Change
Organization Transformation

• 4 Business Units w/ PL
• 4 Leadership teams
• Separate Functional Organizations
• Multiple internal external customer interfaces
• Varying strategies industry knowledge
• Unique processes and procedures

• 1 Business Unit (w/ PL)
• 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

• Streamlined organization
• Right People Right Roles
• Centralized processes
• Engineering
• Quality
• Program Mgmt
• Infrastructure
• Simplified customer interfaces
• Order entry
• Enterprise-wide OpEx
• SDP Kaizen
• Value Streams
• Standard work

2002
2005
2005 Sales 9.7 growth Employees 10 less
SGA Mfg space 27 less 2006 Annual Savings
5M 2006 (Sold Resistoflex 5/06)
2002 Sales 257M Employees 1299 Mfg space
494000

• 2004 Sales 309M
• Employees 1433
• Mfg space 584000
• Annual Savings 7M 2004
• (Acquisition of PL Porter)

31
Investing more in Organic Growth

• Maintain margins while increasing RD investments
• Growing the Core Solutions
• Expanding Solutions with new MU 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 RD
• 2005 - 36M 10 of sales
• 2006F - 43M 12 of sales

32
Organic Growth
Long-Term
Short-Term
33
Summary 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 MU strategy

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

34
(No Transcript)