On April 24, 2017, Crane Co. (the Company) announced its results
of operations for the quarter ended March 31, 2017. The related
press release and quarterly financial data supplement is being
furnished as Exhibit 99.1 to this Current Report on Form 8-K.

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

SECTION 5 – Corporate Governance and Management

On April 24, 2017, at the regular meeting of Crane Co.s Board of
Directors (the Board) following the Annual Meeting of
Stockholders, the Board elected Charles G. McClure, Jr., 63, to
serve as a Director, effective immediately, for a term ending on
the date of the Annual Meeting of Stockholders in 2018.

Mr. McClure is Managing Partner of Michigan Capital Advisors, a
private equity firm he co-founded in 2014, which invests in Tier
2 and 3 global automotive and transportation suppliers. Prior to
founding Michigan Capital Advisors, Mr. McClure served from 2004
to 2013 as Chairman of the Board, CEO and President of Meritor,
Inc., a leading global supplier of drivetrain, mobility, braking
and aftermarket solutions for commercial vehicle and industrial
markets. Mr. McClure currently sits on the boards of directors of
DTE Energy, 3D Systems and Penske Corporation.

Mr. McClure brings to the Board more than 35 years of experience
in corporate strategy, manufacturing, sales, operational and
intellectual capital expertise in various industries, including
transportation. He also brings proven leadership skills with over
20 years of experience as CEO, president and director of major
domestic and international corporations, as well as a member of
the boards of industry organizations.

In connection with his election to the Board, Mr. McClure was
granted 1,540 Deferred Stock Units to the 2013 Stock Incentive
Plan. A description of compensation payable to our Directors can
be found in Crane Co.s most recent proxy statement filed with the
U.S. Securities and Exchange Commission on March 17, 2017.

A copy of the Companys press release dated April 24, 2017
regarding the election of Mr. McClure is included as Exhibit 99.2
to this Current Report on Form 8-K and is incorporated herein by
reference.

Amendments to the Certificate of Incorporation

On April 24, 2017, at the Annual Meeting, the stockholders of the
Company adopted amendments to the Companys Certificate of
Incorporation, as amended (the Certificate of Incorporation), to
provide, among other things, for the declassification of the
Board. These amendments to the Certificate of Incorporation had
previously been approved by the Board, subject to stockholder
approval. On April 24, 2017, the Company filed with the Secretary
of State of the State of Delaware the Amended and Restated
Certificate of Incorporation to reflect, among other things, the
above amendments, which became effective upon filing.

The amendments to the Certificate of Incorporation relating to
the declassification of the Board are described in the Companys
Definitive Proxy Statement in connection with the Annual Meeting
under Item 1: Amendments to the Certificate of Incorporation to
Declassify the Board of Directors. The Amended and Restated
Certificate of Incorporation also, among other things, eliminates
the certificate of designations for the Companys Series A Junior
Participating Preferred Stock, no shares of which were issued or
are outstanding; deletes certain provisions that are no longer
applicable relating to a reclassification of outstanding shares
that was implemented in 1987; and consolidates and integrates all
prior amendments to the Companys Certificate of Incorporation.

The above description of the amendments is qualified in its
entirety by reference to the description contained in the
Definitive Proxy Statement and the text of the Amended and
Restated Certificate of Incorporation, which is filed as Exhibit
3.1 hereto and is incorporated herein by reference.

Amendments to the By-laws

The Board previously adopted conforming amendments to Sections 2,
3 and 4 of Article III of the Companys By-laws relating to the
declassification of the Board, which amendments became effective
upon the effectiveness of the Amended and Restated Certificate of
Incorporation upon filing with the Secretary of State of the
State of Delaware on April 24, 2017. The Board also approved
other amendments to the Companys By-laws, among other things, to
provide additional clarification and consistency. The Companys
By-laws, as amended, and a copy of the By-laws marked to show
changes from the prior By-laws, are included as Exhibits 3.2.1
and 3.2.2, respectively, to this Current Report on Form 8-K and
are incorporated herein by reference.

SECTION 5 Corporate Governance and Management

1. The stockholders approved the proposed amendments to the
Certificate of Incorporation to provide for the declassification
of the Board of Directors.

Approval of this proposal required the affirmative vote of the
holders of at least two-thirds of the voting power of the then
outstanding shares of common stock entitled to vote at the
meeting. Abstentions and broker non-votes had the same effect as
a vote against the proposal.

2. The following three Directors were elected to serve until the
2018 Annual Meeting of Stockholders.

A nominee for the Board of Directors in an uncontested election
is elected if more votes are cast in favor of the nominee than
are cast against the nominee by the holders of shares present in
person or represented by proxy and entitled to vote at the
meeting. Abstentions and broker non-votes are not treated as
votes cast and therefore had no effect on the election of
Directors.

3. The stockholders approved the selection of Deloitte Touche LLP
as independent auditors for the Company for 2017.

Approval of this proposal required the affirmative vote of a
majority of the votes cast by the holders of shares of common
stock present in person or represented by proxy and entitled to
vote at the meeting. Abstentions and broker non-votes are not
treated as votes cast and therefore had no effect on this
proposal.

4. The stockholders approved, on an advisory basis, the
compensation of the named executive officers as disclosed in the
Proxy Statement.

Approval of this proposal required the affirmative vote of a
majority of the votes cast by the holders of shares of common
stock present in person or represented by proxy and entitled to
vote at the meeting. Abstentions and broker non-votes are not
treated as votes cast and therefore had no effect on this
proposal.

5. The stockholders approved, on an advisory basis, holding the
advisory vote on the compensation of the named executive officers
every year until the next required advisory vote on the frequency
of future advisory votes on executive compensation.

The alternative which received the largest number of votes, even
if not a majority, is considered to be the recommendation of the
stockholders. Abstentions and broker non-votes are not treated as
votes cast and therefore had no effect on this proposal.

SECTION 8 OTHER EVENTS

Asbestos Liability

Information Regarding Claims and Costs in the Tort System

As of March 31, 2017, the Company was a defendant in cases filed
in numerous state and federal courts alleging injury or death as
a result of exposure to asbestos. Activity related to asbestos
claims during the periods indicated was as follows:

Of the 35,560 pending claims as of March 31, 2017, approximately
18,300 claims were pending in New York, approximately 800 claims
were pending in Texas, approximately 4,700 claims were pending in
Mississippi, and approximately 200 claims were pending in Ohio,
all jurisdictions in which legislation or judicial orders
restrict the types of claims that can proceed to trial on the
merits.

The Company has tried several cases resulting in defense verdicts
by the jury or directed verdicts for the defense by the court.
The Company further has pursued appeals of certain adverse jury
verdicts that have resulted in reversals in favor of the defense.

On March 23, 2010, a Philadelphia, Pennsylvania, state court jury
found the Company responsible for a 1/11th share of a $14.5
million verdict in the James Nelson>claim. On February 23,
2011, the court entered judgment on the verdict in the amount of
$4.0 million, jointly, against the Company and two other
defendants, with additional interest in the amount of $0.01
million being assessed against the Company, only. All defendants,
including the Company, and the plaintiffs took timely appeals of
certain aspects of those judgments. On September 5, 2013, a panel
of the Pennsylvania Superior Court, in a 2-1 decision, vacated
the Nelson>verdict against all defendants, reversing and
remanding for a new trial. Plaintiffs requested a rehearing in
the Superior Court and by order dated November 18, 2013, the
Superior Court vacated the panel opinion, and granted en banc
reargument. On December 23, 2014, the Superior Court issued a
second opinion reversing the jury verdict. Plaintiffs sought
leave to appeal to the Pennsylvania Supreme Court, which
defendants have opposed. By order dated May 20, 2015, the Supreme
Court of Pennsylvania is holding, but not acting on, the
plaintiffs petition pending the outcome of another appeal in
which the Company is not a party, which appeal has since been
resolved. The Court has taken no further action on
Nelson>since that time.

On August 17, 2011, a New York City state court jury found the
Company responsible for a 99% share of a $32 million verdict on
the Ronald Dummitt claim. The Company filed post-trial motions
seeking to overturn the verdict, to grant a new trial, or to
reduce the damages, which the Company argued were excessive under
New York appellate case law governing awards for non-economic
losses. The Court held oral argument on these motions on October
18, 2011 and issued a written decision on August 21, 2012
confirming the jurys liability findings but reducing the award of
damages to $8 million. At plaintiffs request, the Court entered a
judgment in the amount of $4.9 million against the Company,
taking into account settlement offsets and accrued interest under
New York law. The Company appealed, and the judgment was affirmed
in a 3-2 decision and order dated July 3, 2014. The Company
appealed to the New York Court of Appeals. The court heard oral
arguments on May 3, 2016 and affirmed the judgment in a decision
dated June 28, 2016. The judgment, with interest, in the amount
of $6.6 million was paid in the third quarter 2016.

On October 23, 2012, the Company received an adverse verdict in
the Gerald Suttner>claim in Buffalo, New York. The jury found
that the Company was responsible for four percent (4%) of
plaintiffs damages of $3 million. The Company filed post-trial
motions requesting judgment in the Companys favor notwithstanding
the jurys verdict, which were denied. The court entered a
judgment of $0.1 million against the Company. The Company
appealed, and the judgment was affirmed by order dated March 21,
2014. The Company sought reargument of this decision, which was
denied. The Company sought review before the New York Court of
Appeals, which was accepted in the fourth quarter of 2014. The
court heard oral arguments on

May 3, 2016 and affirmed the judgment in a decision dated June
28, 2016. The judgment, with interest, in the amount of $0.2
million was paid in the third quarter 2016.

On November 28, 2012, the Company received an adverse verdict in
the James Hellam>claim in Oakland, CA. The jury found that the
Company was responsible for seven percent (7%) of plaintiffs
non-economic damages of $4.5 million, plus a portion of their
economic damages of $0.9 million. Based on California court rules
regarding allocation of damages, judgment was entered against the
Company in the amount of $1.282 million. The Company filed
post-trial motions requesting judgment in the Companys favor
notwithstanding the jurys verdict and also requesting that
settlement offsets be applied to reduce the judgment in
accordance with California law. On January 31, 2013, the court
entered an order disposing partially of that motion. On March 1,
2013, the Company filed an appeal regarding the portions of the
motion that were denied. The court entered judgment against the
Company in the amount of $1.1 million. The Company appealed. By
opinion dated April 16, 2014, the Court of Appeal affirmed the
finding of liability against the Company, and the California
Supreme Court denied review of this ruling. The Court of Appeal
reserved the arguments relating to recoverable damages to a
subsequent appeal that remains pending. On August 21, 2015, the
Court of Appeal reversed the trial court with respect to a
$20,000 damages item, but affirmed the trial court in all other
respects. The Company sought review of that ruling before the
Supreme Court of California, which was denied. The Company
settled the matter in December 2015. The settlement is reflected
in the fourth quarter 2015 indemnity amount.

On February 25, 2013, a Philadelphia, Pennsylvania, state court
jury found the Company responsible for a 1/10th share of a $2.5
million verdict in the Thomas Amato>claim and a 1/5th share of
a $2.3 million verdict in the Frank Vinciguerra>claim, which
were consolidated for trial. The Company filed post-trial motions
requesting judgments in the Companys favor notwithstanding the
jurys verdicts or new trials, and also requesting that settlement
offsets be applied to reduce the judgment in accordance with
Pennsylvania law. These motions were denied. The Company
appealed, and on April 17, 2015, a panel of the Superior Court of
Pennsylvania affirmed the trial courts ruling. The Supreme Court
of Pennsylvania accepted the Companys petition for review and
heard oral arguments on September 13, 2016. On November 22, 2016,
the Court dismissed the Companys appeal as improvidently granted.
The Company paid the Vinciguerra verdict in the amount of $0.6
million during the fourth quarter. The payment is reflected in
the fourth quarter 2016 indemnity amount. The Amato>payment
has not yet become due.

On March 1, 2013, a New York City state court jury entered a $35
million verdict against the Company in the Ivo Peraica>claim.
The Company filed post-trial motions seeking to overturn the
verdict, to grant a new trial, or to reduce the damages, which
the Company argues were excessive under New York appellate case
law governing awards for non-economic losses and further were
subject to settlement offsets. After the trial court remitted the
verdict to $18 million, but otherwise denied the Companys
post-trial motion, judgment was entered against the Company in
the amount of $10.6 million (including interest). The Company
appealed. The Company took a separate appeal of the trial courts
denial of its summary judgment motion. The Court consolidated the
appeals, which were heard in the fourth quarter of 2014. In July
2016 the Company supplemented its briefing based on the New York
Court of Appeals Dummitt/Suttner>decision. On October 6, 2016,
a panel of the Appellate Division, First Department, affirmed the
rulings of the trial court on liability issues but further
reduced the damages award to $4.25 million, which after
settlement offsets is calculated to be $1.94 million. Plaintiff
has the option of accepting the reduced amount or having a new
trial on damages. The Company filed a motion with the Appellate
Division requesting a rehearing on liability issues. The motion
was denied. The Company is seeking review before the New York
Court of Appeals. The Company has paid the Peraica>plaintiffs
$5.7 million, which is the amount that plaintiffs claim to be
owed under this judgment, to stipulations that enable the Company
to continue to pursue its ongoing appeal in this case.

On July 31, 2013, a Buffalo, New York state court jury entered a
$3.1 million verdict against the Company in the Lee
Holdsworth>claim. The Company filed post-trial motions seeking
to overturn the verdict, to grant a new trial, or to reduce the
damages, which the Company argues were excessive under New York
appellate case law governing awards for non-economic losses and
further were subject to settlement offsets. Post-trial motions
were denied, and the court entered judgment in the amount of $1.7
million. On June 12, 2015, the Appellate Division, Fourth
Department, affirmed the trial courts ruling denying the Companys
motion for summary judgment. The court denied reargument of that
ruling. The Company pursued a further appeal of the trial court
rulings and judgment, which was argued on May 16, 2016. On July
8, 2016, the Court vacated the judgment and granted the Company a
new trial on the issue of whether the Company is subject to
joint-and-several liability under New York law. Plaintiff filed a
motion to enter judgment in the trial court in the amount
allegedly unaffected by the appellate ruling, approximately $1.0
million, and the Company opposed the motion. The Company settled
the matter. The settlement is reflected in the fourth quarter
2016 indemnity amount.

On September 11, 2013, a Columbia, South Carolina state court
jury in the Lloyd Garvin>claim entered an $11 million verdict
for compensatory damages against the Company and two other
defendants jointly, and also awarded exemplary damages against
the Company in the amount of $11 million. The jury also awarded
exemplary damages against both other defendants. The Company
filed post-trial motions seeking to overturn the verdict, which
were denied, except that the Court remitted the

compensatory damages award to $2.5 million and exemplary damages
award to $3.5 million. Considering settlement offsets, the Court
further reduced the total damages award to $3.5 million. The
Company settled the matter. The settlement is reflected in the
first quarter 2015 indemnity amount.

On September 17, 2013, a Fort Lauderdale, Florida state court
jury in the Richard DeLisle>claim found the Company
responsible for 16 percent of an $8 million verdict. The trial
court denied all parties post-trial motions, and entered judgment
against the Company in the amount of $1.3 million. The Company
has appealed. Oral argument on the appeal took place on February
16, 2016. On September 14, 2016 a panel of the Florida Court of
Appeals reversed and entered judgment in favor of the Company.
Plaintiff filed with the Court of Appeals a motion for rehearing
and/or certification of an appeal to the Florida Supreme Court,
which the Court denied on November 9, 2016. Plaintiffs have
subsequently requested review by the Supreme Court of Florida.
That motion remains pending.

On June 16, 2014, a New York City state court jury entered a $15
million verdict against the Company in the Ivan Sweberg>claim
and a $10 million verdict against the Company in the Selwyn
Hackshaw>claim. The two claims were consolidated for trial.
The Company filed post-trial motions seeking to overturn the
verdicts, to grant new trials, or to reduce the damages, which
were denied, except that the Court reduced the Sweberg award to
$10 million, and reduced the Hackshaw>award to $6 million.
Judgments have been entered in the amount of $5.3 million in
Sweberg>and $3.1 million in Hackshaw. The Company appealed.
Oral argument on Sweberg>took place on February 16, 2016, and
oral argument on Hackshaw>took place on March 9, 2016. On
October 6, 2016, two panels of the Appellate Division, First
Department, affirmed the rulings of the trial court on liability
issues but further reduced the Sweberg>damages award to $9.5
million and further reduced the Hackshaw damages award to $3
million, which after settlement offsets are calculated to be
$4.73 million in Sweberg>and $0 in Hackshaw. Plaintiffs were
given the option of accepting the reduced awards or having new
trials on damages. Plaintiffs have subsequently brought an appeal
in Hackshaw before the New York Court of Appeals, and the parties
will submit their position on the merits in the second quarter
2017. The Company filed a motion with the Appellate Division
requesting a rehearing on liability issues in Sweberg. That
motion was denied. The Company is seeking review before the New
York Court of Appeals. The Company has paid the Sweberg
plaintiffs $2.7 million, which is the amount that plaintiffs
claim to be owed under this judgment, to stipulations that enable
the Company to continue to pursue its ongoing appeal in this
case.

On July 2, 2015, a St. Louis, Missouri state court jury in the
James Poage>claim entered a $1.5 million verdict for
compensatory damages against the Company. The jury also awarded
exemplary damages against the Company in the amount of $10
million. The Company filed a motion seeking to reduce the verdict
to account for the verdict set-offs. That motion was denied, and
judgment was entered against the Company in the amount of $10.8
million. The Company is pursuing an appeal. Oral argument was
held on December 13, 2016.

On February 9, 2016, a Philadelphia, Pennsylvania, federal court
jury found the Company responsible for a 30 percent share of a
$1.085 million verdict in the Valent Rabovsky>claim. The court
ordered briefing on the amount of the judgment. The Company
argued, among other things, that settlement offsets reduce the
award to plaintiff under Pennsylvania law. A further hearing was
held April 26, 2016, after which the court denied the Companys
request and entered judgment in the amount of $0.4 million. The
Company filed post-trial motions, which were denied in two
decisions issued on August 26, 2016 and September 28, 2016. The
Company is pursuing an appeal to the Third Circuit Court of
Appeals, which will likely be argued in the second quarter 2017.

On April 22, 2016, a Phoenix, Arizona federal court jury found
the Company responsible for a 20 percent share of a $9 million
verdict in the George Coulbourn>claim, and further awarded
exemplary damages against the Company in the amount of $5
million. The jury also awarded compensatory and exemplary damages
against the other defendant present at trial. The court entered
judgment against the Company in the amount of $6.8 million. The
Company filed post-trial motions, which were denied on September
20, 2016. The Company is pursuing an appeal to the Ninth Circuit
Court of Appeals. Briefing will proceed before the Court later
this year.

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

The gross settlement and defense costs incurred (before insurance
recoveries and tax effects) for the Company for the three-month
periods ended March 31, 2017 and 2016 totaled $28.0 million and
$21.3 million, respectively. In contrast to the recognition of
settlement and defense costs, which reflect the current level of
activity in the tort system, cash payments and receipts generally
lag the tort system activity by several months or more, and may
show some fluctuation from quarter to quarter. Cash payments of
settlement amounts are not made until all releases and other
required documentation are received by the Company, and
reimbursements of both settlement amounts and defense costs by
insurers may be uneven due to insurer payment practices,
transitions from one insurance layer to the next excess layer and
the payment terms of certain reimbursement agreements. The
Companys total pre-tax payments for settlement and defense costs,
net of funds received from

insurers, for the three-month periods ended March 31, 2017 and
2016 totaled $14.7 million and $10.8 million, respectively.
Detailed below are the comparable amounts for the periods
indicated.

The amounts shown for settlement and defense costs incurred, and
cash payments, are not necessarily indicative of future period
amounts, which may be higher or lower than those reported.

Cumulatively through March 31, 2017, the Company has resolved (by
settlement or dismissal) approximately 125,000 claims. The
related settlement cost incurred by the Company and its insurance
carriers is approximately $501 million, for an average settlement
cost per resolved claim of approximately $4,000. The average
settlement cost per claim resolved during the years ended
December 31, 2016, 2015 and 2014 was $3,900, $3,100 and $3,800,
respectively. Because claims are sometimes dismissed in large
groups, the average cost per resolved claim, as well as the
number of open claims, can fluctuate significantly from period to
period. In addition to large group dismissals, the nature of the
disease and corresponding settlement amounts for each claim
resolved will also drive changes from period to period in the
average settlement cost per claim. Accordingly, the average cost
per resolved claim is not considered in the Companys periodic
review of its estimated asbestos liability. For a discussion
regarding the four most significant factors affecting the
liability estimate, see Effects on the Condensed Consolidated
Financial Statements.

Effects on the Condensed Consolidated Financial Statements

The Company has retained the firm of Hamilton, Rabinovitz
Associates, Inc. (HRA), a nationally recognized expert in the
field, to assist management in estimating the Companys asbestos
liability in the tort system. HRA reviews information provided by
the Company concerning claims filed, settled and dismissed,
amounts paid in settlements and relevant claim information such
as the nature of the asbestos-related disease asserted by the
claimant, the jurisdiction where filed and the time lag from
filing to disposition of the claim. The methodology used by HRA
to project future asbestos costs is based on the Companys recent
historical experience for claims filed, settled and dismissed
during a base reference period. The Companys experience is then
compared to estimates of the number of individuals likely to
develop asbestos-related diseases determined based on widely used
previously conducted epidemiological studies augmented with
current data inputs. Those studies were undertaken in connection
with national analyses of the population of workers believed to
have been exposed to asbestos. Using that information, HRA
estimates the number of future claims that would be filed against
the Company and estimates the aggregate settlement or indemnity
costs that would be incurred to resolve both pending and future
claims based upon the average settlement costs by disease during
the reference period. This methodology has been accepted by
numerous courts. After discussions with the Company, HRA augments
its liability estimate for the costs of defending asbestos claims
in the tort system using a forecast from the Company which is
based upon discussions with its defense counsel. Based on this
information, HRA compiles an estimate of the Companys asbestos
liability for pending and future claims using a range of
reference periods based on claim experience and covering claims
expected to be filed through the indicated forecast period. The
most significant factors affecting the liability estimate are (1)
the number of new mesothelioma claims filed against the Company,
(2) the average settlement costs for mesothelioma claims, (3) the
percentage of mesothelioma claims dismissed against the Company
and (4) the aggregate defense costs incurred by the Company.
These factors are interdependent, and no one factor predominates
in determining the liability estimate.

In the Companys view, the forecast period used to provide the
best estimate for asbestos claims and related liabilities and
costs is a judgment based upon a number of trend factors,
including the number and type of claims being filed each year;
the jurisdictions where such claims are filed, and the effect of
any legislation or judicial orders in such jurisdictions
restricting the

types of claims that can proceed to trial on the merits; and the
likelihood of any comprehensive asbestos legislation at the
federal level. In addition, the dynamics of asbestos litigation
in the tort system have been significantly affected by the
substantial number of companies that have filed for bankruptcy
protection, thereby staying any asbestos claims against them
until the conclusion of such proceedings, and the establishment
of a number of post-bankruptcy trusts for asbestos claimants,
which have been estimated to provide $36 billion for payments to
current and future claimants. These trend factors have both
positive and negative effects on the dynamics of asbestos
litigation in the tort system and the related best estimate of
the Companys asbestos liability, and these effects do not move in
a linear fashion but rather change over multi-year periods.
Accordingly, the Companys management continues to monitor these
trend factors over time and periodically assesses whether an
alternative forecast period is appropriate.

Each quarter, HRA compiles an update based upon the Companys
experience in claims filed, settled and dismissed as well as
average settlement costs by disease category (mesothelioma, lung
cancer, other cancer, and non-malignant conditions including
asbestosis). In addition to this claims experience, the Company
also considers additional quantitative and qualitative factors
such as the nature of the aging of pending claims, significant
appellate rulings and legislative developments, and their
respective effects on expected future settlement values. As part
of this process, the Company also takes into account trends in
the tort system such as those enumerated above. Management
considers all these factors in conjunction with the liability
estimate of HRA and determines whether a change in the estimate
is warranted.

Liability Estimate. With the assistance of HRA, effective as of
December 31, 2016, the Company extended its estimate of the
asbestos liability, including the costs of settlement or
indemnity payments and defense costs relating to currently
pending claims and future claims projected to be filed against
the Company through the generally accepted end point of such
claims in 2059. The Companys previous estimate was for asbestos
claims filed or projected to be filed through 2021. The Companys
estimate of the asbestos liability for pending and future claims
through 2059 is based on the projected future asbestos costs
resulting from the Companys experience using a range of reference
periods for claims filed, settled and dismissed. Based on this
estimate, the Company recorded an additional liability of $227
million as of December 31, 2016. This action was based on several
factors which contribute to the Companys ability to reasonably
estimate this liability through 2059. First, the number of
mesothelioma claims (which although constituting approximately
10% of the Companys total pending asbestos claims, have
consistently accounted for approximately 90% of the Companys
aggregate settlement and defense costs) being filed against the
Company and associated settlement costs have stabilized. Second,
there have been generally favorable developments in the trend of
case law which has been a contributing factor in stabilizing the
asbestos claims activity and related settlement costs. Third,
there have been significant actions taken by certain state
legislatures and courts that have reduced the number and types of
claims that can proceed to trial, which has been a significant
factor in stabilizing the asbestos claims activity. Fourth,
recent court decisions in certain jurisdictions have provided
additional clarity regarding the nature of claims that may
proceed to trial in those jurisdictions and greater
predictability regarding future claim activity. Fifth, the
Company has coverage-in-place agreements with almost all of its
excess insurers, which enables the Company to project a stable
relationship between settlement and defense costs paid by the
Company and reimbursements from its insurers. Sixth, annual
settlements with respect to groups of cases with certain
plaintiff firms have helped to stabilize indemnity payments and
defense costs. Taking these factors into account, the Company
believes that it can reasonably estimate the asbestos liability
for pending claims and future claims to be filed through 2059.

Management has made its best estimate of the costs through 2059
based on the analysis by HRA completed in January 2017. Through
March 31, 2017, the Companys actual experience during the updated
reference period for mesothelioma claims filed and dismissed
generally approximated the assumptions in the Companys liability
estimate. In addition to this claims experience, the Company
considered additional quantitative and qualitative factors such
as the nature of the aging of pending claims, significant
appellate rulings and legislative developments, and their
respective effects on expected future settlement values. Based on
this evaluation, the Company determined that no change in the
estimate was warranted for the period ended March 31, 2017.

A liability of $696 million was recorded as of December 31, 2016
to cover the estimated cost of asbestos claims now pending or
subsequently asserted through 2059, of which approximately 80% is
attributable to settlement and defense costs for future claims
projected to be filed through 2059. The liability is reduced when
cash payments are made in respect of settled claims and defense
costs. The liability was $674 million as of March 31, 2017. It is
not possible to forecast when cash payments related to the
asbestos liability will be fully expended; however, it is
expected such cash payments will continue for a number of years
past 2059, due to the significant proportion of future claims
included in the estimated asbestos liability and the lag time
between the date a claim is filed and when it is resolved. None
of these estimated costs have been discounted to present value
due to the inability to reliably forecast the timing of payments.
The current portion of the total estimated liability at March 31,
2017 was $71 million and represents the Companys best estimate of
total asbestos costs expected to be paid during the twelve-month
period. Such amount is based upon the HRA model together with the
Companys prior year payment experience for both settlement and
defense costs.

Insurance Coverage and Receivables.>Prior to 2005, a
significant portion of the Companys settlement and defense costs
were paid by its primary insurers. With the exhaustion of that
primary coverage, the Company began negotiations with its excess
insurers to reimburse the Company for a portion of its settlement
and/or defense costs as incurred. To date, the Company has
entered into agreements providing for such reimbursements, known
as coverage-in-place, with eleven of its excess insurer groups.
Under such coverage-in-place agreements, an insurers policies
remain in force and the insurer undertakes to provide coverage
for the Companys present and future asbestos claims on specified
terms and conditions that address, among other things, the share
of asbestos claims costs to be paid by the insurer, payment
terms, claims handling procedures and the expiration of the
insurers obligations. Similarly, under a variant of
coverage-in-place, the Company has entered into an agreement with
a group of insurers confirming the aggregate amount of available
coverage under the subject policies and setting forth a schedule
for future reimbursement payments to the Company based on
aggregate indemnity and defense payments made. In addition, with
ten of its excess insurer groups, the Company entered into
agreements settling all asbestos and other coverage obligations
for an agreed sum, totaling $82.5 million in aggregate.
Reimbursements from insurers for past and ongoing settlement and
defense costs allocable to their policies have been made in
accordance with these coverage-in-place and other agreements. All
of these agreements include provisions for mutual releases,
indemnification of the insurer and, for coverage-in-place, claims
handling procedures. With the agreements referenced above, the
Company has concluded settlements with all but one of its solvent
excess insurers whose policies are expected to respond to the
aggregate costs included in the liability estimate. That insurer,
which issued a single applicable policy, has been paying the
shares of defense and indemnity costs the Company has allocated
to it, subject to a reservation of rights. There are no pending
legal proceedings between the Company and any insurer contesting
the Companys asbestos claims under its insurance policies.

In conjunction with developing the aggregate liability estimate
referenced above, the Company also developed an estimate of
probable insurance recoveries for its asbestos liabilities. In
developing this estimate, the Company considered its
coverage-in-place and other settlement agreements described
above, as well as a number of additional factors. These
additional factors include the financial viability of the
insurance companies, the method by which losses will be allocated
to the various insurance policies and the years covered by those
policies, how settlement and defense costs will be covered by the
insurance policies and interpretation of the effect on coverage
of various policy terms and limits and their interrelationships.
In addition, the timing and amount of reimbursements will vary
because the Companys insurance coverage for asbestos claims
involves multiple insurers, with different policy terms and
certain gaps in coverage. In addition to consulting with legal
counsel on these insurance matters, the Company retained
insurance consultants to assist management in the estimation of
probable insurance recoveries based upon the aggregate liability
estimate described above and assuming the continued viability of
all solvent insurance carriers. Based upon the analysis of policy
terms and other factors noted above by the Companys legal
counsel, and incorporating risk mitigation judgments by the
Company where policy terms or other factors were not certain, the
Companys insurance consultants compiled a model indicating how
the Companys historical insurance policies would respond to
varying levels of asbestos settlement and defense costs and the
allocation of such costs between such insurers and the Company.
Using the estimated liability as of December 31, 2016 (for claims
filed or expected to be filed through 2059), the insurance
consultants model forecasted that approximately 21% of the
liability would be reimbursed by the Companys insurers. While
there are overall limits on the aggregate amount of insurance
available to the Company with respect to asbestos claims, those
overall limits were not reached by the total estimated liability
currently recorded by the Company, and such overall limits did
not influence the Company in its determination of the asset
amount to record. The proportion of the asbestos liability that
is allocated to certain insurance coverage years, however,
exceeds the limits of available insurance in those years. The
Company allocates to itself the amount of the asbestos liability
(for claims filed or expected to be filed through 2059) that is
in excess of available insurance coverage allocated to such
years. An asset of $143 million was recorded as of December 31,
2016 representing the probable insurance reimbursement for such
claims expected through 2059. The asset is reduced as
reimbursements and other payments from insurers are received. The
asset was $136 million as of March 31, 2017.

The Company reviews the aforementioned estimated reimbursement
rate with its insurance consultants on a periodic basis in order
to confirm its overall consistency with the Companys established
reserves. The reviews encompass consideration of the performance
of the insurers under coverage-in-place agreements and the effect
of any additional lump-sum payments under other insurer
agreements. Actual insurance reimbursements vary from period to
period, and will decline over time, for the reasons cited above.

Uncertainties.>Estimation of the Companys 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 and the manner of
their resolution. The Company cautions that its estimated
liability is based on assumptions with respect to future claims,
settlement and defense costs based on past experience that may
not prove reliable as predictors; the assumptions are
interdependent and no single factor predominates in determining
the liability estimate. A significant upward or downward trend in
the number of claims filed, depending on the nature of the
alleged injury, the jurisdiction where filed and the quality of
the product identification, or a significant upward or downward
trend in the costs of defending claims, could change the
estimated liability, as would

substantial adverse verdicts at trial that withstand appeal. A
legislative solution, structured settlement transaction, or
significant change in relevant case law could also change the
estimated liability.

The same factors that affect developing estimates of probable
settlement and defense costs for asbestos-related liabilities
also affect estimates of the probable insurance reimbursements,
as do a number of additional factors. These additional factors
include the financial viability of the insurance companies, the
method by which losses will be allocated to the various insurance
policies and the years covered by those policies, how settlement
and defense costs will be covered by the insurance policies and
interpretation of the effect on coverage of various policy terms
and limits and their interrelationships. In addition, due to the
uncertainties inherent in litigation matters, no assurances can
be given regarding the outcome of any litigation, if necessary,
to enforce the Companys rights under its insurance policies or
settlement agreements.

Many uncertainties exist surrounding asbestos litigation, and the
Company will continue to evaluate its estimated asbestos-related
liability and corresponding estimated insurance reimbursement as
well as the underlying assumptions and process used to derive
these amounts. These uncertainties may result in the Company
incurring future charges or increases to income to adjust the
carrying value of recorded liabilities and assets, particularly
if the number of claims and settlement and defense costs change
significantly, or if there are significant developments in the
trend of case law or court procedures, or if legislation or
another alternative solution is implemented. Although the
resolution of these claims will likely take many years, the
effect on the results of operations, financial position and cash
flow in any given period from a revision to these estimates could
be material.

SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS