UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-4018

Dover Corporation

(Exact name of registrant as specified in its charter)

Delaware		53-0257888
(State of Incorporation)		(I.R.S. Employer Identification No.)
280 Park Avenue, New York, NY		10017
(Address of principal executive offices)		(Zip Code)

(212) 922-1640
(Registrant’s telephone number)

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, and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares outstanding of the Registrant’s common stock as of October 19, 2009 was 186,176,669.

 

 

Dover Corporation
Form 10-Q
Table of Contents

PART I — FINANCIAL INFORMATION

Page		Item
		Item 1. Financial Statements (unaudited)
1		Condensed Consolidated Statements of Operations
		(For the three and nine months ended September 30, 2009 and 2008)
2		Condensed Consolidated Balance Sheets
		(At September 30, 2009 and December 31, 2008)
2		Condensed Consolidated Statement of Stockholders’ Equity
		(For the nine months ended September 30, 2009)
3		Condensed Consolidated Statements of Cash Flows
		(For the nine months ended September 30, 2009 and 2008)
3		Notes to Condensed Consolidated Financial Statements
14		Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
23		Item 3. Quantitative and Qualitative Disclosures About Market Risk
23		Item 4. Controls and Procedures
PART II — OTHER INFORMATION
Page		Item
23		Item 1. Legal Proceedings
23		Item 1A. Risk Factors
23		Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
23		Item 3. Defaults Upon Senior Securities
23		Item 4. Submission of Matters to a Vote of Security Holders
24		Item 5. Other Information
24		Item 6. Exhibits
25		Signatures
26		Exhibit Index
EX-31.1
EX-31.2
EX-32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

(All other schedules are not required and have been omitted)

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) (in thousands, except per share figures)

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

		Three Months Ended September 30,								Nine Months Ended September 30,
		2009				2008				2009				2008
Revenue		$	1,499,611			$	1,965,776			$	4,269,028			$	5,842,240
Cost of goods and services			941,345				1,261,433				2,735,308				3,718,732
Gross profit			558,266				704,343				1,533,720				2,123,508
Selling and administrative expenses			378,125				434,992				1,110,476				1,325,299
Operating earnings			180,141				269,351				423,244				798,209
Interest expense, net			26,299				25,924				73,537				76,743
Other expense (income), net			(903	)			(12,644	)			(1,124	)			(8,926	)
Total interest/other expense, net			25,396				13,280				72,413				67,817
Earnings before provision for income taxes and discontinued operations			154,745				256,071				350,831				730,392
Provision for income taxes			47,261				65,736				81,378				205,216
Earnings from continuing operations			107,484				190,335				269,453				525,176
Loss from discontinued operations, net			(600	)			(2,685	)			(12,063	)			(55,072	)
Net earnings		$	106,884			$	187,650			$	257,390			$	470,104
Basic earnings (loss) per common share:
Earnings from continuing operations		$	0.58			$	1.02			$	1.45			$	2.77
Loss from discontinued operations, net			—				(0.01	)			(0.06	)			(0.29	)
Net earnings			0.57				1.01				1.38				2.48
Weighted average shares outstanding			186,148				186,488				186,077				189,326
Diluted earnings (loss) per common share:
Earnings from continuing operations		$	0.58			$	1.01			$	1.45			$	2.76
Loss from discontinued operations, net			—				(0.01	)			(0.06	)			(0.29	)
Net earnings			0.57				1.00				1.38				2.47
Weighted average shares outstanding			186,358				187,706				186,321				190,531
Dividends paid per common share		$	0.26			$	0.25			$	0.76			$	0.65

The following table is a reconciliation of the share amounts used in computing earnings per share:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2009				2008				2009				2008
Weighted average shares outstanding — Basic			186,148				186,488				186,077				189,326
Dilutive effect of stock options, SARS and performance shares			210				1,218				244				1,205
Weighted average shares outstanding — Diluted			186,358				187,706				186,321				190,531
Anti-dilutive equity securities excluded from diluted EPS computation			12,404				3,735				9,721				3,735

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands)

		At September 30,				At December 31,
		2009				2008
Current assets:
Cash and equivalents		$	597,504			$	547,409
Short-term investments			332,000				279,460
Receivables, net of allowances of $47,455 and $32,647			935,948				1,013,174
Inventories, net			567,322				636,121
Prepaid and other current assets			79,213				80,268
Deferred tax asset			77,581				73,687
Total current assets			2,589,568				2,630,119
Property, plant and equipment, net			843,313				872,134
Goodwill			3,274,053				3,255,566
Intangible assets, net			899,030				952,409
Other assets and deferred charges			114,093				103,904
Assets of discontinued operations			52,254				69,106
Total assets		$	7,772,311			$	7,883,238
Current liabilities:
Notes payable and current maturities of long-term debt		$	33,875			$	224,944
Accounts payable			363,665				373,436
Accrued compensation and employee benefits			204,160				305,572
Accrued insurance			114,353				104,938
Other accrued expenses			209,071				209,619
Federal and other taxes on income			18,329				35,005
Total current liabilities			943,453				1,253,514
Long-term debt			1,826,989				1,860,729
Deferred income taxes			325,738				314,405
Other deferrals			576,469				582,601
Liabilities of discontinued operations			59,248				79,123
Total liabilities			3,731,897				4,090,372
Commitments and contingent liabilities
Stockholders’ Equity:
Total stockholders’ equity			4,040,414				3,792,866
Total liabilities and stockholders’ equity		$	7,772,311			$	7,883,238

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(unaudited) (in thousands)

										Accumulated
		Common				Additional				Other												Total
		Stock				Paid-In				Comprehensive				Retained				Treasury				Stockholders’
		$1 Par Value				Capital				Earnings				Earnings				Stock				Equity
Balance at 12/31/2008		$	246,615			$	455,228			$	10,816			$	5,286,458			$	(2,206,251	)		$	3,792,866
Net earnings			—				—				—				257,390				—				257,390
Dividends paid			—				—				—				(141,431	)			—				(141,431	)
Common stock issued for options exercised			174				4,898				—				—				—				5,072
Tax benefit from the exercise of stock options			—				225				—				—				—				225
Stock-based compensation expense			—				13,944				—				—				—				13,944
Translation of foreign financial statements			—				—				104,028				—				—				104,028
Unrealized holding gains, net of tax			—				—				1,031				—				—				1,031
Pension amortization, net of tax			—				—				7,289				—				—				7,289
Balance at 9/30/2009		$	246,789			$	474,295			$	123,164			$	5,402,417			$	(2,206,251	)		$	4,040,414

Preferred Stock, $100 par value per share. 100,000 shares authorized; none issued.

See Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements, in accordance with Securities and Exchange Commission (“SEC”) rules for interim periods, do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the Dover Corporation (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2008, which provides a more complete understanding of the Company’s accounting policies, financial position, operating results, business properties and other matters. The year-end condensed consolidated balance sheet was derived from audited financial statements. It is the opinion of management that these financial statements reflect all adjustments necessary for a fair statement of the interim results. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year.

Certain prior year amounts have been reclassified to conform with the current period presentation.

2. Acquisitions

The 2009 asset acquisitions are wholly-owned and had an aggregate cost of $43.0 million, net of cash acquired, at the date of acquisition. The following table details the acquisitions made during 2009.

2009 Acquisitions

Date

Type

Acquired Companies

Location (Near)

Segment

Platform

Company

8-May

Asset

Tyler Refrigeration

Niles, MI

Engineered Systems

Engineered Products

Hill PHOENIX

24-Aug

Asset

Mechanical Field Services

Gardendale, TX

Fluid Management

Energy

Cook Compression

The Company is in the process of finalizing appraisals of tangible and intangible assets and continuing to evaluate the initial purchase price allocations as of the acquisition date, which will be adjusted as additional information relative to the fair values of the assets and liabilities of the businesses becomes known. Accordingly, management has used its best estimate in the initial purchase price allocations as of the date of these financial statements.

The following unaudited pro forma information illustrates the effect on the Company’s revenue and net earnings for the three and nine months ended September 30, 2009 and 2008, assuming that the 2009 and 2008 acquisitions had all taken place on January 1, 2008.

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except per share figures)		2009				2008				2009				2008
Revenue from continuing operations:
As reported		$	1,499,611			$	1,965,776			$	4,269,028			$	5,842,240
Pro forma			1,501,012				2,023,063				4,351,122				6,028,409
Net earnings from continuing operations:
As reported		$	107,484			$	190,335			$	269,453			$	525,176
Pro forma			107,694				191,201				270,994				529,130
Basic earnings per share from continuing operations:
As reported		$	0.58			$	1.02			$	1.45			$	2.77
Pro forma			0.58				1.03				1.46				2.79
Diluted earnings per share from continuing operations:
As reported		$	0.58			$	1.01			$	1.45			$	2.76
Pro forma			0.58				1.02				1.45				2.78

These pro forma results of operations have been prepared for comparative purposes only and include certain adjustments to actual financial results for the relevant periods, such as imputed financing costs, and estimated additional amortization and depreciation expenses as a result of intangibles and fixed assets acquired. They do not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred on the date indicated or that may result in the future.

In connection with certain acquisitions that occurred prior to January 1, 2009, the Company had reserves related to severance and facility closings of $21.8 million and $27.9 million at September 30, 2009 and December 31, 2008, respectively. During the nine months ended September 30, 2009 the reserves were reduced by payments of $6.9 million of which $1.2 million was recorded in the third quarter. During the nine months ended September 30, 2008, the Company recorded payments and write-downs of $3.6 million, of which $1.3 million was recorded in the third quarter.

3. Inventory

The following table displays the components of inventory:

		At September 30,				At December 31,
(in thousands)		2009				2008
Raw materials		$	297,528			$	319,407
Work in progress			138,438				144,017
Finished goods			183,938				231,507
Subtotal			619,904				694,931
Less LIFO reserve			52,582				58,810
Total		$	567,322			$	636,121

4. Property, Plant and Equipment

The following table displays the components of property, plant and equipment:

		At September 30,				At December 31,
(in thousands)		2009				2008
Land		$	49,544			$	49,015
Buildings and improvements			555,524				547,223
Machinery, equipment and other			1,838,758				1,792,615
			2,443,826				2,388,853
Accumulated depreciation			(1,600,513	)			(1,516,719	)
Total		$	843,313			$	872,134

5. Goodwill and Other Intangible Assets

The following table provides the changes in carrying value of goodwill by segment through the nine months ended September 30, 2009:

										Other
										adjustments
						Goodwill from				including
		At December 31,				2009				currency				At September
(in thousands)		2008				acquisitions				translations				30, 2009
Electronic Technologies		$	976,706			$	—			$	4,973			$	981,679
Industrial Products			919,215				—				516				919,731
Fluid Management			571,221				4,364				2,873				578,458
Engineered Systems			788,424				—				5,761				794,185
Total		$	3,255,566			$	4,364			$	14,123			$	3,274,053

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset:

		At September 30, 2009								Average				At December 31, 2008
		Gross Carrying				Accumulated				Life				Gross Carrying				Accumulated
(dollar amounts in thousands)		Amount				Amortization				(Years)				Amount				Amortization
Amortized Intangible Assets:
Trademarks		$	67,132			$	15,401				16			$	32,223			$	12,453
Patents			126,630				82,148				19				129,233				79,241
Customer Intangibles			695,789				251,586				10				681,636				200,169
Unpatented Technologies			135,798				72,625				9				129,303				61,871
Non-Compete Agreements			3,391				3,302				6				3,475				3,400
Drawings & Manuals			13,761				6,301				5				13,653				5,441
Distributor Relationships			73,247				20,042				18				72,413				17,193
Other			18,190				12,091				12				22,725				10,270
Total			1,133,938				463,496				12				1,084,661				390,038
Unamortized Intangible Assets:
Trademarks			228,588												257,786
Total Intangible Assets		$	1,362,526			$	463,496							$	1,342,447			$	390,038

The Company’s provision for income taxes for continuing operations in interim periods is computed by applying its estimated annual effective tax rate against earnings before income tax expense for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The effective tax rates for the three and nine months ended September 30, 2009 were 30.5% and 23.2% compared to the prior year rates of 25.7% and 28.1%, respectively. The effective tax rate for the nine months ended September 30, 2009 was improved by $28.4 million of net benefits recognized for tax positions that were effectively settled primarily in the second quarter of 2009. The effective tax rate of 25.7% for the three months ended September 30, 2008 was impacted by $8.8 million of benefits recognized for tax positions that were settled in the third quarter of 2008. A higher percentage of domestic earnings and the mix of non-U.S. earnings in low-tax jurisdictions both had a negative impact on the effective tax rates for the three and nine months ended September 30, 2009 compared to the prior year periods, absent the settlement of tax positions.

2009

During the first quarter of 2009, the Company recorded adjustments to the carrying value of a business held for sale and other adjustments resulting in a net after-tax loss of approximately $7.4 million. Adjustments made during the second and third quarter of 2009 were nominal. The after-tax loss for the nine months ended September 30, 2009 is approximately $7.7 million.

2008

During the third quarter of 2008, the Company completed the sale of a previously discontinued business and recorded other adjustments resulting in a net loss of approximately $0.7 million.

During the second quarter of 2008, the Company discontinued Triton in the Engineered Systems segment and recorded a $51.1 million write-down to the carrying value of Triton to its estimated fair market value and in the first quarter of 2008, the Company recorded adjustments to the carrying value of a business held for sale and other adjustments resulting in a net after-tax loss of approximately $2.0 million.

Summarized results of the Company’s discontinued operations are as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2009				2008				2009				2008
Revenue		$	14,046			$	17,277			$	40,379			$	70,396
Loss on sale, net of taxes (1)		$	(203	)		$	(741	)		$	(7,656	)		$	(53,713	)
Income (Loss) from operations before taxes			1,199				(2,714	)			(1,685	)			(2,732	)
Benefit (provision) for income taxes related to operations			(1,596	)			770				(2,722	)			1,373
Loss from discontinued operations, net of tax		$	(600	)		$	(2,685	)		$	(12,063	)		$	(55,072	)

At September 30, 2009, the assets and liabilities of discontinued operations primarily represent amounts related to one remaining unsold business. Additional detail related to the assets and liabilities of the Company’s discontinued operations is as follows:

		At September 30,				At December 31,
(in thousands)		2009				2008
Assets of Discontinued Operations
Current assets		$	30,039			$	32,498
Non-current assets			22,215				36,608
		$	52,254			$	69,106
Liabilities of Discontinued Operations
Current liabilities		$	15,371			$	13,371
Non-current liabilities			43,877				65,752
		$	59,248			$	79,123

In addition to the assets and liabilities of the entities currently held for sale in discontinued operations, the assets and liabilities of discontinued operations include residual amounts related to businesses previously sold. These residual amounts include property, plant and equipment, deferred tax assets, short and long-term reserves, and contingencies.

8. Hedging Activities and Debt

Hedging Activities

The Company periodically enters into financial transactions specifically to hedge its exposures to various items, including, but not limited to, interest rate and foreign exchange rate risk. Through various programs, the Company hedges its cash flow exposures to foreign exchange rate risk by entering into foreign exchange forward contracts and collars. The Company does not enter into derivative financial instruments for speculative purposes and does not have a material portfolio of derivative financial instruments.

In accordance with the provisions of Accounting Standards Codification (“ASC”) 815, the Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. If the derivative is designated as a fair value hedge and is effective, then the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, then the effective portions of changes in the fair value of the derivative are recorded in other comprehensive earnings (Note 11) and are recognized in the statement of operations when the hedged item affects income. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings.

There is presently one outstanding swap agreement for a total notional amount of $50.0 million, or CHF65.1 million, which swaps the U.S. dollar 6-month LIBOR rate and the Swiss Franc 6-month LIBOR rate. This agreement hedges a portion of the Company’s net investment in non-U.S. operations and the fair value outstanding at September 30, 2009 includes a loss of $13.4 million which was based on quoted market prices for similar instruments (using Level 2 inputs under the provisions of ASC 820).

The change in fair value of this hedge, which was not significant during the first nine months of 2009, is recorded in Cumulative Translation Adjustments and in Other Deferrals in the Unaudited Condensed Consolidated Balance Sheet. This hedge is effective.

The Company’s other hedging activity is not significant; therefore tabular disclosures are not presented. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit risk related contingent features in the Company’s derivative instruments. In addition, the amount of gains or losses from hedging activity recorded in earnings is not significant and the amount of unrealized gains or losses from cash flow hedges which are expected to be reclassified to earnings in the next twelve months is not significant. During the third quarter of 2008, the Company entered into a foreign currency hedge which was subsequently settled within the quarter. As a result of terminating the hedge, the Company recorded a gain of $2.4 million in the third quarter ended September 30, 2008.

Debt

The Company’s long-term debt with a book value of $1,860.7 million includes $33.7 million which matures in less than one year and had a fair value of approximately $1,990.6 million at September 30, 2009. The estimated fair value of the long-term debt is based on quoted market prices, and present value techniques used to value similar instruments.

During the second quarter ended June 30, 2008, the Company repaid its $150 million 6.25% Notes due June 1, 2008. In addition, on March 14, 2008, the Company issued $350 million of 5.45% Notes due 2018 and $250 million of 6.60% Notes due 2038. The net proceeds of $594.1 million from the notes were used to repay borrowings under the Company’s commercial paper program, and were reflected in long-term debt in the Consolidated Balance Sheet at December 31, 2008. The notes and debentures are redeemable at the option of the Company in whole or in part at any time at a redemption price that includes a make-whole premium, with accrued interest to the redemption date.

During the first quarter of 2008, the Company entered into several interest rate swaps in anticipation of the debt financing completed on March 14, 2008 which, upon settlement, resulted in a net gain of $1.2 million which was deferred and will be amortized over the life of the related notes.

9. Commitments and Contingent Liabilities

A few of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites identified under federal and state statutes which provide for the allocation of such costs among “potentially responsible parties.” In each instance, the extent of the Company’s liability appears to be very small in relation to the total projected expenditures and the number of other “potentially responsible parties” involved and is anticipated to be immaterial to the Company. In addition, a few of the Company’s subsidiaries are involved in ongoing remedial activities at certain current and former plant sites, in cooperation with regulatory agencies, and appropriate reserves have been established.

The Company and certain of its subsidiaries are also parties to a number of other legal proceedings incidental to their businesses. These proceedings primarily involve claims by private parties alleging injury arising out of use of the Company’s products, exposure to hazardous substances, patent infringement, employment matters and commercial disputes. Management and legal counsel, at least quarterly, review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred, the availability and extent of insurance coverage, and established reserves. While it is not possible at this time to predict the outcome of these legal actions or any need for additional reserves, in the opinion of management, based on these reviews, it is unlikely that the disposition of the lawsuits and the other matters mentioned above will have a material adverse effect on the financial position, results of operations, cash flows or competitive position of the Company.

Estimated warranty program claims are provided for at the time of sale. Amounts provided for are based on historical costs and adjusted new claims. The changes in the carrying amount of product warranties through September 30, 2009 and 2008 are as follows:

(in thousands)		2009				2008
Beginning Balance January 1		$	56,137			$	55,437
Provision for warranties			23,715				32,288
Increase from acquisitions/dispositions			3,081				91
Settlements made			(25,774	)			(28,017	)
Other adjustments			383				(921	)
Ending Balance September 30		$	57,542			$	58,878

Prior to January 1, 2009, the Company initiated various restructuring programs at its operating companies and recorded severance and other restructuring costs in connection with purchase accounting for acquisitions (see Note 2 for additional detail). In 2008, the Company announced plans to increase substantially the amount of restructuring efforts in response to the significant decline in global economic activity. For the three months ended September 30, 2009, $3.2 million and $5.4 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations. For the nine months ended September 30, 2009, $18.3 million and $43.9 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

The following table details the Company’s severance and other restructuring reserve activity:

(in thousands)		Severance				Exit				Total
At December 31, 2008 (A)		$	7,203			$	23,754			$	30,957
Provision			47,670				14,561				62,231
Payments			(42,161	)			(9,103	)			(51,264	)
Other			2,177				(2,993	)			(816	)
At September 30, 2009 (B)		$	14,889			$	26,219			$	41,108

10. Employee Benefit Plans

The following table sets forth the components of net periodic expense:

		Retirement Plan Benefits								Post Retirement Benefits
		Three Months Ended September 30,								Three Months Ended September 30,
(in thousands)		2009				2008				2009				2008
Expected return on plan assets		$	(8,547	)		$	(8,662	)		$	—			$	—
Benefits earned during period			5,003				5,501				79				64
Interest accrued on benefit obligation			9,268				9,759				240				240
Amortization (A):
Prior service cost			2,249				2,159				(43	)			(43	)
Recognized actuarial (gain) loss			1,298				1,188				(107	)			(116	)
Transition obligation			(10	)			(18	)			—				—
Net periodic expense		$	9,261			$	9,927			$	169			$	145

		Retirement Plan Benefits								Post Retirement Benefits
		Nine Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2009				2008				2009				2008
Expected return on plan assets		$	(25,641	)		$	(25,986	)		$	—			$	—
Benefits earned during period			15,009				16,504				237				267
Interest accrued on benefit obligation			27,804				29,277				720				828
Curtailment gain			(337	)			—				—				—
Amortization (A):
Prior service cost			6,747				6,477				(129	)			(129	)
Recognized actuarial (gain) loss			3,894				3,564				(321	)			(94	)
Transition obligation			(30	)			(53	)			—				—
Net periodic expense (benefit)		$	27,446			$	29,783			$	507			$	872

11. Comprehensive Earnings

Comprehensive earnings were as follows:

		Three months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2009				2008				2009				2008
Net Earnings		$	106,884			$	187,650			$	257,390			$	470,104
Foreign currency translation adjustment			70,511				(95,326	)			104,028				(18,996	)
Unrealized holding gains (losses), net of tax			19				(511	)			118				(717	)
Derivative cash flow hedges, net of tax			(112	)			(659	)			913				458
Pension amortization, net of tax			2,673				1,966				7,289				5,954
Comprehensive Earnings		$	179,975			$	93,120			$	369,738			$	456,803

12. Segment Information:

The Company has four reportable segments which are based on management’s reporting structure used to evaluate performance. Segment financial information and a reconciliation of segment results to consolidated results follows:

		Three months ended September 30								Nine Months Ended September 30,
(in thousands)		2009				2008				2009				2008
REVENUE
Industrial Products		$	396,040			$	629,611			$	1,213,779			$	1,895,391
Engineered Systems			520,693				524,646				1,388,894				1,562,597
Fluid Management			309,247				451,682				935,289				1,299,611
Electronic Technologies			275,266				362,446				735,254				1,094,161
Intra — segment eliminations			(1,635	)			(2,609	)			(4,188	)			(9,520	)
Total consolidated revenue		$	1,499,611			$	1,965,776			$	4,269,028			$	5,842,240
EARNINGS FROM CONTINUING OPERATIONS
Segment Earnings:
Industrial Products		$	38,119			$	74,690			$	98,084			$	241,453
Engineered Systems			78,194				82,032				178,961				225,073
Fluid Management			60,677				102,232				191,692				285,249
Electronic Technologies			38,160				53,826				44,043				141,089
Total segments			215,150				312,780				512,780				892,864
Corporate expense / other			(34,106	)			(30,785	)			(88,412	)			(85,729	)
Net interest expense			(26,299	)			(25,924	)			(73,537	)			(76,743	)
Earnings from continuing operations before provision for income taxes and discontinued operations			154,745				256,071				350,831				730,392
Provision for income taxes			47,261				65,736				81,378				205,216
Earnings from continuing operations — total consolidated		$	107,484			$	190,335			$	269,453			$	525,176

13. Recent Accounting Standards

In September 2006, the FASB issued authoritative guidance under ASC 820 which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. For financial assets and liabilities, this guidance was effective for fiscal periods beginning after November 15, 2007 and did not require any new fair value measurements. The adoption of this guidance on January 1, 2008 did not have a material effect on the Company’s consolidated financial statements. In February 2008, the FASB delayed the effective date for nonfinancial assets and liabilities to fiscal years beginning after November 15, 2008, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of the provisions of ASC 820 related to “non-financial assets” did not have a material effect on the Company’s consolidated financial statements.

In December 2007, the FASB issued authoritative guidance under ASC 805 which retains the fundamental requirements that the acquisition method of accounting (the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. In general, the statement 1) extends its applicability to all events where one entity obtains control over one or more other businesses, 2) broadens the use of fair value measurements used to recognize the assets acquired and liabilities assumed, 3) changes the accounting for acquisition related fees and restructuring costs incurred in connection with an acquisition, and 4) increases required disclosures. The Company has applied the provisions of this guidance prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The impact of ASC 805 did not have a material effect on the Company’s consolidated financial statements since its adoption.

In March 2008, the FASB issued authoritative guidance under ASC 815 which provides users of financial statements with an enhanced understanding of an entity’s derivative activity. The Company adopted this guidance as of January 1, 2009 and has included related disclosures in Note 8.

In April 2008, the FASB issued authoritative guidance under ASC 350 and ASC 275 to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the intangible assets. ASC 350 and ASC 275 amend the factors to be considered when developing renewal or extension assumptions that are used to estimate an intangible asset’s useful life. The guidance is to be applied prospectively to intangible assets acquired after December 31, 2008. In addition, ASC 350 and ASC 275 increase the disclosure requirements related to renewal or extension assumptions.

The Company has applied the provisions of this guidance to business combinations for which the acquisition date is on or after January 1, 2009. The impact of ASC 350 and ASC 275 did not have a material effect on the Company’s consolidated financial statements since its adoption.

In December 2008, the FASB issued authoritative guidance under ASC 715 which amends the disclosure requirements about plan assets of a defined pension or other postretirement plan. The provisions of this guidance require disclosure of 1) how investment allocation decisions are made, including factors that are pertinent to an understanding of the investment policies and strategies, 2) the fair value of each major category of plan assets, 3) the inputs and valuation techniques used to determine fair value and 4) an understanding of significant concentration of risk in plan assets. The provisions of this guidance become effective for fiscal years ending after December 15, 2009 and are to be applied prospectively. The adoption of the amendments under ASC 715 will not have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued authoritative guidance under ASC 825 to require disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. The provisions of this guidance require all entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments. ASC 825 is effective for interim periods ended after June 15, 2009 and does not require comparative disclosure for earlier periods presented upon initial adoption. The adoption of ASC 825 did not have a material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued authoritative guidance under ASC 805. The provisions of ASC 805 provide guidance for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. ASC 805 eliminates the distinction between contractual and non-contractual contingencies. The Company has applied the provisions of this guidance prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The impact of ASC 805 did not have a material effect on the Company’s consolidated financial statements since its adoption.

In May 2009, the FASB issued authoritative guidance under ASC 855 which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855 became effective for interim or annual financial periods ending after June 15, 2009 and was adopted in the second quarter of 2009. The adoption of ASC 855 did not have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued authoritative guidance under ASC 105 which establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles. ASC 105 became effective for financial statements issued for interim periods ended after September 15, 2009. All content within the Codification carries the same level of authority. The adoption of ASC 105 did not have a material effect on the Company’s consolidated financial statements.

14. Equity and Cash Incentive Program

In the first and second quarters of 2009, the Company issued stock appreciation rights (“SARs”) covering 2,795,755 and 29,577 shares, respectively. During the second quarter of 2009, after the shareholders approved certain plan changes detailed in the Company’s Proxy Statement, the Company issued 75,892 performance shares. In the first quarter of 2008, the Company issued 2,234,942 SARs.

For the nine months ended September 30, 2009 and 2008, after-tax stock-based compensation expense totaled $9.7 million and $14.2 million, respectively.

The fair value of each SAR grant was estimated on the date of the grant using the Black-Scholes option pricing model and the performance share grant was estimated on the date of grant using a Monte Carlo simulation pricing model. The following assumptions were used in determining fair value:

First Quarter 2009 and 2008 SAR Grants:

		2009 Grant				2008 Grant
		SARs				SARs
Risk-free interest rate			2.06	%			3.21	%
Dividend yield			3.23	%			1.86	%
Expected life (years)			6.5				6.5
Volatility			30.47	%			26.09	%
Option grant price		$	29.45			$	42.30
Fair value of options granted		$	6.58			$	10.97

Second Quarter 2009 SAR and 2009 Performance Share Grants

						Performance
		SARs				Shares
Risk-free interest rate			3.44	%			1.30	%
Dividend yield			2.82	%			2.93	%
Expected life (years)			6.5				2.7
Volatility			32.20	%			39.57	%
Option grant price		$	35.50			$	32.47
Fair value of options granted		$	9.82			$	35.79

15. Subsequent Events

The Company assessed events occurring subsequent to September 30, 2009 through October 23, 2009 for potential recognition and disclosure in the consolidated financial statements. No events have occurred that would require adjustment to or disclosure in the consolidated financial statements which were issued on October 23, 2009.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Refer to the section below entitled “Special Notes Regarding Forward-Looking Statements” for a discussion of factors that could cause actual results to differ from the forward-looking statements contained below and throughout this quarterly report.

OVERVIEW

Dover Corporation (the “Company”) owns a global portfolio of manufacturing companies providing innovative components and equipment, specialty systems and support services for a variety of applications in the industrial products, engineered systems, fluid management and electronic technologies markets. The Company discusses its operations at the platform level within the Industrial Products, Engineered Systems and Fluid Management segments, which contain two platforms each. Electronic Technologies’ results are discussed at the segment level.

(1) FINANCIAL CONDITION:

Liquidity and Capital Resources

Management assesses the Company’s liquidity in terms of its ability to generate cash and access capital markets to fund its operating, investing and financing activities. Significant factors affecting liquidity are: cash flows generated from operating activities, capital expenditures, acquisitions, dispositions, dividends, repurchase of outstanding shares, adequacy of commercial paper and available bank lines of credit, and the ability to attract long-term capital with satisfactory terms. The Company generates substantial cash from operations and remains in a strong financial position, maintaining enough liquidity for reinvestment in existing businesses and strategic acquisitions while managing its capital structure on a short and long-term basis.

Cash and cash equivalents of $597.5 million at September 30, 2009 increased from the December 31, 2008 balance of $547.4 million. Cash and cash equivalents were invested in highly liquid investment grade money market instruments with a maturity of 90 days or less. Short-term investments consist of investment grade time deposits with original maturity dates between three months and one year. Short-term investments of $332.0 million at September 30, 2009 increased from $279.5 million at December 31, 2008.

The Company’s total cash, cash and cash equivalents and short-term investment balance of $929.5 million as of September 30, 2009, includes $879.9 million held outside of the United States.

The following table is derived from the Condensed Consolidated Statements of Cash Flows:

		Nine Months Ended September 30,
Cash Flows from Continuing Operations (in thousands)		2009				2008
Net Cash Flows Provided By (Used In):
Operating activities		$	554,113			$	740,063
Investing activities			(156,480	)			(433,336	)
Financing activities			(362,826	)			(332,055	)

Cash flows provided by operating activities for the nine months of 2009 decreased $186.0 million from the prior year period, primarily reflecting lower earnings on reduced sales from continuing operations and improvements in working capital.

Cash used in investing activities for the nine months of 2009 decreased $276.9 million largely reflecting lower acquisition spending and capital expenditures, as well as reduced net purchases of short-term investments. Acquisition spending was $43.3 million during the nine months of 2009 compared to $99.9 million in the prior year period. Capital expenditures during the nine months of 2009 decreased 37.6% to $83.3 million as compared to $133.3 million in the prior year period. The Company currently anticipates that any additional acquisitions made during 2009 will be funded from available cash and internally generated funds, and if necessary, through the issuance of commercial paper, use of established lines of credit or public debt markets.

Cash used in financing activities for nine months of 2009 increased $30.8 million over the prior year primarily driven by debt repayments, higher dividend payments and reduced proceeds from the exercise of stock options, partially offset by the absence of share repurchase versus the prior period.

Adjusted Working Capital (a non-GAAP measure calculated as accounts receivable, plus inventory, less accounts payable) improved from the prior year end by $136.3 million, or 10.7%, to $1,139.6 million which reflected a decrease in receivables of $77.2 million, a decrease in inventory of $68.8 million and a decrease in accounts payable of $9.8 million generally due to active management in a lower revenue environment. Excluding acquisitions, dispositions and the effects of foreign exchange translation of $41.7 million, Adjusted Working Capital would have improved by $178.0 million, or 14.0%. “Average Annual Adjusted Working Capital” as a percentage of revenue (a non-GAAP measure calculated as the five-quarter average balance of accounts receivable, plus inventory, less accounts payable divided by the trailing twelve months of revenue) increased to 20.3% at September 30, 2009 from 18.3% at December 31, 2008 and inventory turns were 6.2 at September 30, 2009 compared to 7.1 at December 31, 2008.

In addition to measuring its cash flow generation and usage based upon the operating, investing and financing classifications included in the unaudited Condensed Consolidated Statements of Cash Flows, the Company also measures free cash flow (a non-GAAP measure). Management believes that free cash flow is an important measure of operating performance because it provides both management and investors a measurement of cash generated from operations that is available to repay debt, pay dividends, fund acquisitions and repurchase the Company’s common stock. The Company’s free cash flow for the nine months ended September 30, 2009 decreased $135.9 million compared to the prior year period. The decrease primarily reflected lower earnings from continuing operations, partially offset by improvements in working capital and lower capital expenditures.

The following table is a reconciliation of free cash flow with cash flows from operating activities:

		Nine Months Ended September 30,
Free Cash Flow (in thousands)		2009				2008
Cash flow provided by operating activities		$	554,113			$	740,063
Less: Capital expenditures			83,250				133,319
Free cash flow		$	470,863			$	606,744
Free cash flow as a percentage of revenue			11.0	%			10.4	%

The Company utilizes total debt and net debt-to-total capitalization calculations to assess its overall financial leverage and capacity and believes the calculations are useful to investors for the same reason. The following table provides a reconciliation of total debt and net debt to total capitalization to the most directly comparable GAAP measures:

		At September 30,				At December 31,
Net Debt to Total Capitalization Ratio (in thousands)		2009				2008
Current maturities of long-term debt		$	33,682			$	32,194
Commercial paper and other short-term debt			193				192,750
Long-term debt			1,826,989				1,860,729
Total debt			1,860,864				2,085,673
Less: Cash, cash equivalents and short-term investments			929,504				826,869
Net debt			931,360				1,258,804
Add: Stockholders’ equity			4,040,414				3,792,866
Total capitalization		$	4,971,774			$	5,051,670
Net debt to total capitalization			18.7	%			24.9	%

The total debt level of $1,860.9 million at September 30, 2009 decreased $224.8 million from December 31, 2008, due to lower commercial paper borrowings. The net debt decrease was funded by cash from operations and reflects lower investment in capital expenditures and acquisitions.

The Company’s long-term debt with a book value of $1,860.7 million, of which $33.7 million matures in less than one year, had a fair value of approximately $1,990.6 million at September 30, 2009. The estimated fair value of the long-term debt is based on quoted market prices for similar issues, and present value techniques used to value similar instruments.

There is presently one outstanding swap agreement for a total notional amount of $50.0 million, or CHF65.1 million, which swaps the U.S. dollar 6-month LIBOR rate and the Swiss Franc 6-month LIBOR rate. This agreement hedges a portion of the Company’s net investment in non-U.S. operations and the fair value outstanding at September 30, 2009 includes a loss of $13.4 million which was based on quoted market prices for similar instruments (using Level 2 inputs under the ASC 820 hierarchy).

The change in fair value of this hedge, which was not significant during the first nine months of 2009, is recorded in Cummulative Translation Adjustments and in Other Deferrals in the Unaudited Condensed Consolidated Balance Sheet. This hedge is effective.

(2) RESULTS OF OPERATIONS:

CONSOLIDATED RESULTS OF OPERATIONS

Revenue for the third quarter of 2009 decreased 23.7% to $1,499.6 million from the comparable 2008 period, with decreases at all four segments. The Company’s revenue decrease was primarily attributed to declines in its core businesses of 24.4% and the negative impact of foreign exchange of 2.0% partially offset by net acquisitions and dispositions of 2.7%. Gross profit decreased 20.7% to $558.3 million from the prior year quarter while the gross profit margin increased 140 basis points to 37.2%.

Revenue for the first nine months of 2009 decreased 26.9% to $4,269.0 million from the comparable period, with decreases in all segments. Gross profit decreased 27.8% to $1,533.7 million from the prior year period while gross profit margin decreased 40 basis points to 35.9%. The Company’s revenue decrease was primarily attributed to declines in its core businesses of 25.7% and the impact of foreign exchange of 2.9%.

Selling and administrative expenses of $378.1 million for the third quarter of 2009 decreased by 13.1% or $56.9 million over the comparable 2008 period, primarily due to decreased revenue activity, cost containment efforts and integration programs partially offset by restructuring charges. Selling and administrative expenses as a percentage of revenue increased to 25.2% from 22.1% in the comparable 2008 period, reflecting reduced revenue levels and restructuring charges of $5.4 million.

Selling and administrative expenses of $1,110.5 million for the first nine months of 2009 decreased by 16.2% or $214.8 million over the prior year period, mainly due to decreased revenue, cost containment efforts and integration programs partially offset by restructuring charges. Selling and administrative expenses as a percentage of revenue increased to 26.0% from 22.7% in the comparable period, reflecting reduced revenue levels and restructuring charges of $44.0 million.

Interest expense, net, for the third quarter of 2009 increased by 1.4% or $0.4 million to $26.3 million compared to the same quarter last year primarily due to investments maturing during the quarter that were reinvested at lower interest rates as compared to the prior investments partially offset by lower average outstanding commercial paper balances during the quarter. Other expense (income), net, of ($0.9) million and $(12.6) million for the three months ended September 30, 2009 and 2008, respectively, primarily related to the effects of foreign exchange fluctuations on assets and liabilities denominated in currencies other than the Company’s functional currency.

Interest expense, net, for the first nine months of 2009 decreased 4.2% or $3.2 million to $73.5 million, compared to the same period last year, primarily due to lower average outstanding commercial paper balances during the period partially offset by investments that were reinvested at lower interest rates during the quarter. Other expense (income), net, for the first nine months of 2009 decreased $7.8 million to $(1.1) million over the comparable 2008 period due to the effects of foreign exchange fluctuations and an insurance settlement.

The effective tax rates for continuing operations for the three and nine months ended September 30, 2009 were 30.5% and 23.2% compared to the prior year rates of 25.7% and 28.1%, respectively. The effective tax rates for the nine months ended September 30, 2009 were improved by $28.4 million of net benefits recognized for tax positions that were effectively settled primarily in the second quarter. The effective tax rate of 25.7% for the three months ended September 30, 2008 was favorably impacted by $8.8 million of benefits recognized for tax positions that were settled in the third quarter of 2008. A higher percentage of domestic earnings and the mix of non-U.S. earnings in low-tax jurisdictions both had a negative impact on the effective tax rates for the three and nine months ended September 30, 2009 compared to the prior year periods, absent the settlement of tax positions.

Earnings from continuing operations for the third quarter decreased 43.5% to $107.5 million or $0.58 diluted EPS (“EPS”) compared to $190.3 million or $1.01 EPS in the prior year third quarter. The decrease was primarily a result of end-market weakness across all of the Company’s segments and restructuring charges offset by cost containment efforts and lower average borrowing costs. Earnings from continuing operations for the first nine months of 2009 decreased 48.7% to $269.5 million or $1.45 diluted EPS compared to $525.2 million or $2.76 diluted EPS in the prior year period primarily driven by the same factors for the third quarter of 2009.

Loss from discontinued operations for the third quarter 2009 was $0.6 million, compared to a third quarter 2008 loss of $2.7 million. The 2009 loss included a $0.2 million loss, net of tax, related to adjustments to the fair value of a business

held for sale and other adjustments, as well as a loss from operations of $0.4 million, net of tax. The 2008 loss primarily represents losses from discontinued operations.

Loss from discontinued operations for the first nine months of 2009 was $12.1 million or $0.06 EPS compared to a loss of $55.1 million or $0.29 EPS in the comparable 2008 period. The 2009 events include the third quarter events mentioned above as well as first quarter adjustments to the carrying value of certain businesses held for sale. The loss from discontinued operations for the first nine months of 2009 and 2008 included an impairment charge of $7.2 million and $51.1 million, net of tax, respectively.

Severance and Other Restructuring Reserves

From time to time, the Company will initiate various restructuring programs at its operating companies or record severance and other restructuring costs in connection with purchase accounting for acquisitions prior to January 1, 2009. During the nine months of 2009, the Company closed 25 facilities and reduced headcount by approximately 6,000 or 19% as compared to December 31, 2008. The Company expects to incur approximately $9.2 million in restructuring costs and reduce headcount by approximately 600 during the remainder of 2009. The Company expects the restructuring costs incurred during 2009 and 2008 to yield savings in the range of $150 million to $175 million in 2009.

At September 30, 2009 and December 31, 2008, the Company had reserves related to severance and other restructuring activities of $41.1 million and $31.0 million, respectively. During the third quarter of 2009, the Company recorded $8.6 million in additional charges and made $17.9 million in payments related to reserve balances. For the third quarter of 2009, $3.2 million and $5.4 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

During the first nine months of 2009, the Company recorded $62.2 million in charges and made payments of $51.3 million related to these reserves. For the first nine months of 2009, $18.3 million and $44.0 million of restructuring charges were recorded in cost of goods sold and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

Current Economic Environment

With few exceptions, the Company experienced lower demand across all of its end markets resulting in lower bookings and backlog in the fourth quarter of 2008 and first and second quarters of 2009, with modest improvements in certain segments in the third quarter of 2009. Although this downturn will have a significant adverse impact on revenue and earnings for the remainder of the year, the Company remains committed to maintaining margin levels. The structural changes made over the last few years, becoming less dependent on capital goods markets and having greater recurring revenue, together with improved working capital management and strong pricing discipline, is expected to partially offset the impact of the economic downturn during 2009. As discussed above in the Liquidity and Capital Resources section, the Company believes that existing sources of liquidity are adequate to meet anticipated funding needs at comparable risk-based interest rates.

2009 Outlook

The Company anticipates that 2009 revenue will be 24% to 26% lower than 2008 levels and expects its earnings to follow a traditional seasonal pattern of being lower in the fourth quarter. Based on these expectations, the Company estimates continuing diluted earnings per share for 2009 will be around the midpoint of $1.75 to $2.00. However, if global or domestic economic conditions deteriorate, the Company’s operating results for 2009 could be materially worse than currently projected.

SEGMENT RESULTS OF OPERATIONS

Industrial Products

Industrial Products		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)		2009				2008				% Change				2009				2008				% Change
Revenue
Material Handling		$	154,238			$	286,568				-46	%		$	494,463			$	880,764				-44	%
Mobile Equipment			242,011				343,261				-29	%			719,824				1,015,212				-29	%
Eliminations			(209	)			(218	)							(508	)			(585	)
		$	396,040			$	629,611				-37	%		$	1,213,779			$	1,895,391				-36	%
Segment earnings		$	38,119			$	74,690				-49	%		$	98,084			$	241,453				-59	%
Operating margin			9.6	%			11.9	%							8.1	%			12.7	%
Acquisition related depreciation and amortization expense*		$	7,770			$	7,805				0	%		$	23,866			$	25,090				-5	%
Bookings
Material Handling		$	162,759			$	292,436				-44	%		$	407,326			$	901,913				-55	%
Mobile Equipment			191,539				295,240				-35	%			648,034				973,623				-33	%
Eliminations			(337	)			(193	)							(561	)			(874	)
		$	353,961			$	587,483				-40	%		$	1,054,799			$	1,874,662				-44	%
Backlog
Material Handling														$	102,146			$	240,009				-57	%
Mobile Equipment															318,496				498,908				-36	%
Eliminations															(170	)			(161	)
														$	420,472			$	738,756				-43	%

Industrial Products revenue and earnings decreased by 37% and 49%, respectively, from the prior year third quarter primarily due to general economic conditions as well as continued downturn in infrastructure, energy, and transportation markets. The segment decline in revenue primarily reflected a core business decrease of 36%, with 0.6% due to foreign exchange. Earnings and margin were impacted by the factors mentioned above as well as $3.2 million in restructuring charges partially offset by benefits captured from business restructuring and integration programs completed to date.

Material Handling revenue and earnings decreased 46% and 54%, respectively, when compared to the prior year third quarter. The platform continued to experience significant challenges in its core infrastructure, automotive and energy markets, compared to the third quarter of 2008. Restructuring charges at the platform also negatively impacted the earnings comparison with the third quarter of 2008.

Mobile Equipment revenue and earnings decreased 29% and 28%, respectively, over the prior year third quarter. Although the aerospace and military markets remained relatively strong, their results were offset by challenges in the energy, bulk transport and vehicle service markets. Earnings at the platform were negatively impacted by the lower revenue levels and various restructuring activities.

For the nine months ended September 30, 2009, Industrial Products revenue and earnings decreased by 36% and 59%, respectively, as compared to the prior year nine months. General softness in the markets served by the segment in core businesses contributed to the decrease in revenue. The earnings decline was substantially attributable to the revenue drivers above and restructuring charges of $15.3 million partially offset by benefits captured from restructuring and integration programs completed to date.

Engineered Systems

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)		2009				2008				% Change				2009				2008				% Change
Revenue
Engineered Products		$	308,741			$	289,778				7	%		$	806,565			$	846,953				-5	%
Product Identification			211,952				234,868				-10	%			582,329				715,644				-19	%
		$	520,693			$	524,646				-1	%		$	1,388,894			$	1,562,597				-11	%
Segment earnings		$	78,194			$	82,032				-5	%		$	178,961			$	225,073				-20	%
Operating margin			15.0	%			15.6	%							12.9	%			14.4	%
Acquisition related depreciation and amortization expense*		$	6,580			$	6,103				8	%		$	19,087			$	18,328				4	%
Bookings
Engineered Products		$	258,634			$	260,227				-1	%		$	754,855			$	824,157				-8	%
Product Identification			212,642				233,196				-9	%			594,057				723,281				-18	%
		$	471,276			$	493,423				-4	%		$	1,348,912			$	1,547,438				-13	%
Backlog
Engineered Products														$	199,888			$	205,127				-3	%
Product Identification															72,523				76,247				-5	%
														$	272,411			$	281,374				-3	%