Document and Company Informatio
Document and Company Information (USD $) | |||
9 Months Ended
Sep. 30, 2009 | Oct. 30, 2009
| Jun. 30, 2008
| |
Document And Company Information [Abstract] | |||
Entity Registrant Name | AMETEK INC/ | ||
Entity Central Index Key | 0001037868 | ||
Document Type | 10-Q | ||
Document Period End Date | 2009-09-30 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $5,037,380,113 | ||
Entity Common Stock, Shares Outstanding | 107,838,655 |
Consolidated Statement of Incom
Consolidated Statement of Income (Unaudited) (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Net sales | $497,060 | $647,423 | $1,574,855 | $1,907,391 |
Operating expenses: | ||||
Cost of sales, excluding depreciation | 344,658 | 437,476 | 1,076,879 | 1,285,676 |
Selling, general and administrative | 63,858 | 78,216 | 189,405 | 237,236 |
Depreciation | 11,069 | 11,666 | 31,714 | 34,070 |
Total operating expenses | 419,585 | 527,358 | 1,297,998 | 1,556,982 |
Operating income | 77,475 | 120,065 | 276,857 | 350,409 |
Other expenses: | ||||
Interest expense | (17,380) | (15,534) | (52,076) | (45,996) |
Other, net | (702) | (1,540) | (1,726) | (3,166) |
Income before income taxes | 59,393 | 102,991 | 223,055 | 301,247 |
Provision for income taxes | 16,375 | 32,067 | 69,169 | 98,124 |
Net income | $43,018 | $70,924 | $153,886 | $203,123 |
Basic earnings per share | 0.4 | 0.67 | 1.44 | 1.91 |
Diluted earnings per share | 0.4 | 0.66 | 1.43 | 1.89 |
Weighted average common shares outstanding: | ||||
Basic shares | 106,862 | 106,341 | 106,663 | 106,078 |
Diluted shares | 107,748 | 107,577 | 107,675 | 107,619 |
Dividends declared and paid per share | 0.06 | 0.06 | 0.18 | 0.18 |
Consolidated Balance Sheet
Consolidated Balance Sheet (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
Current assets: | ||
Cash and cash equivalents | $200,963 | $86,980 |
Marketable securities | 6,164 | 4,230 |
Receivables, less allowance for possible losses | 349,184 | 406,012 |
Inventories | 312,536 | 349,509 |
Deferred income taxes | 37,065 | 30,919 |
Other current assets | 54,676 | 76,936 |
Total current assets | 960,588 | 954,586 |
Property, plant and equipment, net | 308,331 | 307,908 |
Goodwill | 1,280,581 | 1,240,052 |
Other intangibles, net of accumulated amortization | 503,646 | 441,785 |
Investments and other assets | 115,869 | 111,211 |
Total assets | 3,169,015 | 3,055,542 |
Current liabilities: | ||
Short-term borrowings and current portion of long-term debt | 85,426 | 18,438 |
Accounts payable | 170,958 | 203,742 |
Income taxes payable | 37,073 | 31,649 |
Accrued liabilities | 155,579 | 193,684 |
Total current liabilities | 449,036 | 447,513 |
Long-term debt | 974,287 | 1,093,243 |
Deferred income taxes | 193,053 | 144,941 |
Other long-term liabilities | 68,502 | 82,073 |
Total liabilities | 1,684,878 | 1,767,770 |
Stockholders' equity: | ||
Common stock | 1,109 | 1,102 |
Capital in excess of par value | 227,165 | 203,000 |
Retained earnings | 1,455,050 | 1,320,470 |
Accumulated other comprehensive loss | (106,832) | (144,767) |
Treasury stock | (92,355) | (92,033) |
Total stockholders' equity | 1,484,137 | 1,287,772 |
Total liabilities and stockholders' equity | $3,169,015 | $3,055,542 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating activities: | ||
Net income | $153,886 | $203,123 |
Adjustments to reconcile net income to total operating activities: | ||
Depreciation and amortization | 48,316 | 46,282 |
Deferred income tax expense | 36 | 4,514 |
Share-based compensation expense | 9,807 | 17,321 |
Net change in assets and liabilities, net of acquisitions | 63,360 | (61,253) |
Pension contribution | (19,890) | (2,573) |
Other | 432 | (2,826) |
Total operating activities | 255,947 | 204,588 |
Investing activities: | ||
Additions to property, plant and equipment | (21,469) | (31,032) |
Purchases of businesses, net of cash acquired | (41,194) | (399,004) |
Other | (1,550) | 10,575 |
Total investing activities | (64,213) | (419,461) |
Financing activities: | ||
Net change in short-term borrowings | (13,356) | 182,379 |
Additional long-term borrowings | 1,466 | 330,000 |
Reduction in long-term borrowings | (63,964) | (232,605) |
Repurchases of common stock | 0 | (57,444) |
Cash dividends paid | (19,162) | (19,049) |
Excess tax benefits from share-based payments | 3,750 | 5,181 |
Proceeds from employee stock plans and other | 9,494 | 7,476 |
Deferred debt financing fees | 0 | (1,246) |
Total financing activities | (81,772) | 214,692 |
Effect of exchange rate changes on cash and cash equivalents | 4,021 | (3,460) |
Increase (decrease) in cash and cash equivalents | 113,983 | (3,641) |
Cash and cash equivalents: | ||
As of January 1 | 86,980 | 170,139 |
As of September 30 | $200,963 | $166,498 |
Basis of Presentation
Basis of Presentation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying consolidated financial statements are unaudited. The Company believes that all adjustments (which primarily consist of normal recurring accruals) necessary for a fair presentation of the consolidated financial position of the Company at September30, 2009, the consolidated results of its operations for the three and nine months ended September30, 2009 and 2008 and its cash flows for the nine months ended September30, 2009 and 2008 have been included. Quarterly results of operations are not necessarily indicative of results for the full year. The accompanying financial statements should be read in conjunction with the financial statements and related notes presented in the Companys Annual Report on Form 10-K for the year ended December31, 2008 as filed with the Securities and Exchange Commission. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In October2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.2009-14, Certain Revenue Arrangements That Include Software Elements (FASB ASU 2009-14). FASB ASU 2009-14 provides guidance for revenue arrangements that include both tangible products and software elements that are essential to the functionality of the hardware. FASB ASU 2009-14 provides factors to help constituents determine what software elements are considered essential to the functionality of the tangible product. This guidance will now subject software-enabled products to other revenue guidance and disclosure requirements, such as guidance surrounding revenue arrangements with multiple-deliverables. FASB ASU 2009-14 is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early application is permitted. The Company is currently evaluating the impact of adopting ASU 2009-14 on our consolidated results of operations, financial position and cash flows. In October2009, the FASB issued ASU No.2009-13, Multiple-Deliverable Revenue Arrangements (FASB ASU 2009-13). FASB ASU 2009-13 provides guidance on accounting and reporting for arrangements including multiple revenue-generating activities. FASB ASU 2009-13 provides guidance for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. FASB ASU 2009-13 also requires significantly expanded disclosures to provide information about a vendors multiple-deliverable revenue arrangements and the judgments made by the vendor that affect the timing or amount of revenue recognition. FASB ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June15, 2010. Early application is permitted. The Company is currently evaluating the impact of adopting FASB ASU 2009-13 on our consolidated results of operations, financial position and cash flows. In August2009, the FASB issued ASU No.2009-05, Measuring Liabilities at Fair Value (FASB ASU 2009-05), which provides clarification on the application of fair value techniques when a quoted price in an active market for the identical liability is not available and clarifies that when estimating the fair value of a liability, the fair value is not adjusted to reflect the impact of contractual restrictions that prevent its transfer. FASB ASU 2009-05 is effective on October1, 2009 for the Company and is not expected to have a significant impact on the Companys consolidated results of operations, financial position and cash flows. In June2009, the FASB issued Financial Accounting Standards (SFAS) No.168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No.162 (SFAS 168). SFAS 168 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles |
Fair Value Measurement
Fair Value Measurement | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Fair Value Measurement [Abstract] | |
Fair Value Measurement | 3. Fair Value Measurement Fair value is defined under FASB ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company adopted FASB ASC 820 as of January1, 2008, with the exception of the application of the statement to nonfinancial assets and nonfinancial liabilities, which was delayed by FASB ASC 820-10-65-1, Transition Related to FASB Staff Position FAS 157-2, Effective Date of FASB Statement No.157, to fiscal years beginning after November15, 2008, which the Company adopted January1, 2009. The Company utilizes a valuation hierarchy for disclosure of the inputs to the valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted)in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Companys own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. At September30, 2009, $57.0million of the Companys cash and cash equivalents as well as $6.2million of marketable securities are valued as level 1 investments. In addition, the Company held $9.1million valued as level 2 investments in the investments and other assets line of the consolidated balance sheet. For the nine months ended September30, 2009, gains and losses on the investments noted above were not material. |
Hedging Activities
Hedging Activities | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Hedging Activities [Abstract] | |
Hedging Activities | 4. Hedging Activities In March2008, the FASB issued ASC 815-10-65-1, Transition and Effective Date Related to FASB Statement No.161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.133 (FASB ASC 815-10-65-1). FASB ASC 815-10-65-1 requires entities to provide enhanced disclosure about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for under FASB ASC Derivatives and Hedging Topic 815 (FASB ASC 815), and how the instruments and related hedged items affect the financial position, results of operations and cash flows of the entity. The Company has designated certain foreign-currency-denominated long-term debt as hedges of the net investment in certain foreign operations. These net investment hedges are the Companys British-pound-denominated long-term debt and Euro-denominated long-term debt, pertaining to certain European acquisitions whose functional currencies are either the British pound or the Euro. These acquisitions were financed by foreign-currency-denominated borrowings under the Companys revolving credit facility and subsequently refinanced with long-term private placement debt. These borrowings were designed to create net investment hedges in each of the foreign subsidiaries on their respective dates of acquisition. On the respective dates of acquisition, the Company designated the British pound- and Euro-denominated loans referred to above as hedging instruments to offset foreign exchange gains or losses on the net investment in the acquired business due to changes in the British pound and Euro exchange rates. These net investment hedges were evidenced by managements documentation supporting the contemporaneous hedge designation on the acquisition dates. Any gain or loss on the hedging instrument following hedge designation (the debt), is reported in accumulated other comprehensive income in the same manner as the translation adjustment on the investment based on changes in the spot rate, which is used to measure hedge effectiveness. At September30, 2009, the Company had $143.8million of British pound-denominated loans, which are designated as a hedge against the net investment in foreign subsidiaries acquired in 2004 and 2003. At September30, 2009, the Company had $73.2million of Euro-denominated loans, which were designated as a hedge against the net investment in a foreign subsidiary acquired in 2005. As a result of these British pound- and Euro-denominated loans being designated and effective as net investment hedges, $15.8million of currency losses have been included in the foreign currency translation component of other comprehensive income at September30, 2009. |
Earnings Per Share
Earnings Per Share | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 5. Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of common shares considered outstanding during the periods. The calculation of diluted earnings per share reflects the effect of all potentially dilutive securities (principally outstanding common stock options and restricted stock grants). The number of weighted average shares used in the calculation of basic earnings per share and diluted earnings per share were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 (In thousands) Weighted average shares: Basic shares 106,862 106,341 106,663 106,078 Stock option and awards plans 886 1,236 1,012 1,541 Diluted shares 107,748 107,577 107,675 107,619 |
Fourth Quarter of 2008 Restruct
Fourth Quarter of 2008 Restructuring Charges and Asset Write Downs | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Fourth Quarter of 2008 Restructuring Charges and Asset Write-Downs [Abstract] | |
Fourth Quarter of 2008 Restructuring Charges and Asset Write-Downs | 6. Fourth Quarter of 2008 Restructuring Charges and Asset Write-Downs During the fourth quarter of 2008, the Company recorded pre-tax charges totaling $40.0 million, which had the effect of reducing net income by $27.3million ($0.25 per diluted share). These charges included restructuring costs for employee reductions and facility closures ($32.6 million), as well as asset write-downs ($7.4million). The charges included $30.1million for severance costs for more than 10% of the Companys workforce and $1.5million for lease termination costs associated with the closure of certain facilities in 2009. Of the $40.0million in charges, $32.9million of the restructuring charges and asset write-downs were recorded in cost of sales and $7.1million of the restructuring charges and asset write-downs were recorded in Selling, general and administrative expenses. The restructuring charges and asset write-downs were reported in segment operating income as follows: $20.4million in Electronic Instruments (EIG), $19.4million in Electromechanical (EMG) and $0.2million in Corporate administrative and other expenses. The restructuring costs for employee reductions and facility closures relate to plans established by the Company in 2008 as part of cost reduction initiatives being broadly implemented across the Companys various businesses during fiscal 2009. The restructuring costs resulted from the consolidation of manufacturing facilities, the migration of production to low cost locales and a general reduction in workforce in response to lower levels of expected sales volumes in certain of the Companys businesses. Substantially all of the payments for employee severance and lease termination costs are expected to be made in 2009. The following table provides a rollforward of the accruals established in the fourth quarter of 2008 for restructuring charges (in millions): Restructuring accruals at December31, 2008 $ 31.6 Utilization (14.3 ) Foreign currency translation and other 0.3 Restructuring accruals at September30, 2009 $ 17.6 |
Acquisitions
Acquisitions | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Acquisitions [Abstract] | |
Acquisitions | 7. Acquisitions The Company spent approximately $43.0million in cash, net of cash acquired, to acquire High Standard Aviation in January2009 as well as a small acquisition of two businesses in India, Unispec Marketing Pvt. Ltd. and Thelsha Technical Services Pvt. Ltd., in September2009. High Standard Aviation is a provider of electrical and electromechanical, hydraulic and pneumatic repair services to the aerospace industry and is part of AMETEKs Electromechanical Group. The operating results of the above acquisitions have been included in the Companys consolidated results from the respective dates of acquisitions. The purchase price and initial recording of the transactions were based on preliminary valuation assessments and are subject to change. The following table represents the provisional allocation of the aggregate purchase price for the net assets of the above acquisitions based on their estimated fair value (in millions): Property, plant and equipment $ 3.4 Goodwill 14.0 Other intangible assets 19.4 Net working capital and other 6.2 Total purchase price $ 43.0 The amount allocated to goodwill is reflective of the benefits the Company expects to realize from the acquisitions as High Standard Aviation broadens the global footprint of AMETEKs aerospace maintenance, repair and overhaul business. The Company is in the process of conducting third-party valuations of certain tangible and intangible assets acquired. Adjustments to the allocation of purchase price will be recorded when this information is finalized. Therefore, the allocation of the purchase price is subject to revision. Had the 2009 acquisitions been made at the beginning of 2009, pro forma net sales, net income and diluted earnings per share for the three and nine months ended September30, 2009 would not have been materially different than the amounts reported. Had the above acquisitions and the 2008 acquisitions of Drake Air and Motion Control Group in February2008, Reading Alloys in April2008, Vision Research, Inc. in June2008, the programmable power business of Xantrex Technology, Inc. in August2008 and Muirhead Aerospace Limited in November2008 been made at the beginning of 2008, unaudited pro forma net sales, net income and diluted earnings per share would have been as follows: Three Months Ended Nine Months Ended September 30, 2008 September 30, 2008 (In millions, except per share amounts) Net sales $ 683.8 $ 2,078.9 Net income $ 73.1 $ 210.7 Diluted earnings per share $ 0.68 $ 1.96 Pro forma results are not necessarily indicative of the results that would have occurred if the acquisitions had been completed at the beginning of 2008. |
Goodwill
Goodwill | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Goodwill [Abstract] | |
Goodwill | 8. Goodwill The changes in the carrying amounts of goodwill by segment were as follows: EIG EMG Total (In millions) Balance at December31, 2008 $ 737.2 $ 502.9 $ 1,240.1 Goodwill acquired 2.6 11.4 14.0 Purchase price allocation adjustments and other* (7.6 ) 6.1 (1.5 ) Foreign currency translation adjustments 17.5 10.5 28.0 Balance at September30, 2009 $ 749.7 $ 530.9 $ 1,280.6 * Purchase price allocation adjustments reflect final purchase price allocations and revisions to certain provisional allocations for recent acquisitions, which include reclassifications between goodwill and other intangible assets. |
Inventories
Inventories | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories | 9. Inventories September 30, December 31, 2009 2008 (In thousands) Finished goods and parts $ 44,812 $ 66,416 Work in process 70,117 81,282 Raw materials and purchased parts 197,607 201,811 Total inventories $ 312,536 $ 349,509 |
Debt
Debt | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Debt [Abstract] | |
Debt | 10. Debt During the second quarter of 2009, the Company repaid $62.0million related to a 40million British pound borrowing under the revolving credit facility. At September30, 2009, the Company had no borrowings outstanding under the revolving credit facility. In the third quarter of 2008, the Company completed a private placement agreement to sell $350million in senior notes to a group of institutional investors. There were two funding dates for the senior notes. The first funding occurred in September2008 for $250million, consisting of $90million in aggregate principal amount of 6.59% senior notes due September2015 and $160million in aggregate principal amount of 7.08% senior notes due September2018. The second funding date occurred in December2008 for $100million, consisting of $35million in aggregate principal amount of 6.69% senior notes due December2015 and $65million in aggregate principal amount of 7.18% senior notes due December2018. The senior notes carry a weighted average interest rate of 6.93%. The senior notes are subject to certain customary covenants, including financial covenants that, among other things, require the Company to maintain certain debt to EBITDA and interest coverage ratios. The proceeds from the senior notes were used to pay down a portion of the Companys revolving credit facility. In July2008, the Company repaid the $225million 7.20% senior notes due July2008 using the proceeds from borrowings under its existing revolving credit facility. Also in July2008, the Company obtained the second funding of $80million in aggregate principal amount of 6.35% senior notes due July2018 under the third quarter of 2007 private placement agreement which completed the sale of $450million in senior notes to a group of institutional investors. The first funding occurred in December2007 for $370million, consisting of $270million in aggregate principal amount of 6.20% senior notes due December2017 and $100million in aggregate principal amount of 6.30% senior notes due December2019. The $100million accounts receivable securitization facility was not renewed by the Company in May2009. |
Comprehensive Income
Comprehensive Income | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Comprehensive Income [Abstract] | |
Comprehensive Income | 11. Comprehensive Income Comprehensive income includes all changes in stockholders equity during a period except those resulting from investments by and distributions to stockholders. The components of comprehensive income were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 (In thousands) Net income $ 43,018 $ 70,924 $ 153,886 $ 203,123 Foreign currency translation adjustment 13,062 (45,729 ) 33,118 (30,070 ) Foreign currency net investment hedge* 15 (6,803 ) 4,165 (4,594 ) Other 416 547 652 128 Total comprehensive income $ 56,511 $ 18,939 $ 191,821 $ 168,587 * Represents the net gains and losses on the Companys investment in certain foreign operations in excess of the net gains and losses from the non-derivative foreign-currency-denominated long-term debt. These debt instruments were designated as hedging instruments to offset foreign exchange gains or losses on the net investment in certain foreign operations. |
Share Based Compensation
Share Based Compensation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 12. Share-Based Compensation The fair value of each option grant is estimated on the date of grant using a Black-Scholes-Merton option pricing model. The following weighted average assumptions were used in the Black-Scholes-Merton model to estimate the fair values of options granted during the period indicated: Nine Months Ended Year Ended September 30, 2009 December 31, 2008 Expected stock volatility 25.8 % 18.4 % Expected life of the options (years) 4.9 4.7 Risk-free interest rate 1.89 % 2.60 % Expected dividend yield 0.73 % 0.49 % Black-Scholes-Merton fair value per option granted $ 7.80 $ 9.58 Expected stock volatility is based on the historical volatility of the Companys stock. The Company used historical exercise data to estimate the options expected life, which represents the period of time that the options granted are expected to be outstanding. Management anticipates that the future option holding periods will be similar to the historical option holding periods. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve at the time of grant. Compensation expense recognized for all share-based awards is net of estimated forfeitures. The Companys estimated forfeiture rates are based on its historical experience. Total share-based compensation expense was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 (In thousands) Stock option expense $ 1,528 $ 1,628 $ 4,661 $ 4,866 Restricted stock expense* 2,006 1,400 5,146 12,455 Total pre-tax expense 3,534 3,028 9,807 17,321 Related tax benefit (1,141 ) (962 ) (3,069 ) (3,171 ) Reduction of net income $ 2,393 $ 2,066 $ 6,738 $ 14,150 * The nine months ended September30, 2008 reflects the accelerated vesting of a restricted stock grant in the second quarter of 2008 as described below. Pre-tax share-based compensation expense is included in either cost of sales, or selling, general and administrative expenses, depending on where the recipients cash compensation is reported. A summary of the Companys stock option activity and related information for the nine months ended September30, 2009 were as follows: Weighted Weighted Average Aggregate Average Remaining Intrinsic Shares Exercise Price Contractual Life Value (In thousands) (Years) (In millions) Outstanding at the beginning of the year 4,035 $ 28.01 Granted 1,320 32.72 Exercised (710 ) 13.98 Forfeited (123 ) 39.40 Outstanding at the end of the period 4,522 $ 31.28 4.3 $ |
Income Taxes
Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 13. Income Taxes At September30, 2009, the Company had gross unrecognized tax benefits of $25.5million, of which $24.7million, if recognized, would impact the effective tax rate. At December31, 2008, the Company had gross unrecognized tax benefits of $18.6million, all of which would impact the effective tax rate if recognized. The following is a reconciliation of the liability for uncertain tax positions (in millions): Balance at December31, 2008 $ 18.6 Additions for tax positions 9.7 Reductions for tax positions (2.8 ) Balance at September30, 2009 $ 25.5 The Company recognizes interest and penalties accrued related to uncertain tax positions in income tax expense. The amounts recognized in income tax expense for interest and penalties during the three and nine months ended September30, 2009 and 2008 were not significant. |
Retirement and Pension Plans
Retirement and Pension Plans | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Retirement and Pension Plans [Abstract] | |
Retirement and Pension Plans | 14. Retirement and Pension Plans The components of net periodic pension benefit expense were as follows: Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 (In thousands) Defined benefit plans: Service cost $ 1,108 $ 1,467 $ 3,374 $ 4,447 Interest cost 7,161 7,173 21,115 21,670 Expected return on plan assets (9,013 ) (10,436 ) (26,715 ) (31,487 ) Amortization of net actuarial loss and prior service costs 3,323 27 9,967 79 Pension expense (income) 2,579 (1,769 ) 7,741 (5,291 ) Other plans: Defined contribution plans 2,908 3,334 9,682 9,908 Foreign plans and other 1,066 1,118 3,091 3,576 Total other plans 3,974 4,452 12,773 13,484 Total net pension expense $ 6,553 $ 2,683 $ 20,514 $ 8,193 For the nine months ended September30, 2009 and 2008, contributions to our defined benefit pension plans were $19.9million and $2.6million, respectively. The current estimate of 2009 pension contributions is in line with the range disclosed in our 2008 Form 10-K. |
Financial Instruments
Financial Instruments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Financial Instruments [Abstract] | |
Financial Instruments | 15. Financial Instruments The estimated fair values of the Companys financial instruments are compared below to the recorded amounts at September30, 2009 and December31, 2008. Cash, cash equivalents and marketable securities are recorded at fair value at September30, 2009 and December31, 2008 in the accompanying consolidated balance sheet. Asset (Liability) September 30, 2009 December 31, 2008 Recorded Recorded Amount Fair Value Amount Fair Value (In thousands) Fixed-income investments $ 8,907 $ 8,907 $ 8,248 $ 8,248 Short-term borrowings (4,553 ) (4,553 ) (16,028 ) (16,028 ) Long-term debt (including current portion) (1,055,160 ) (1,100,142 ) (1,095,653 ) (1,095,653 ) The fair value of fixed-income investments is based on quoted market prices. The fair value of short-term borrowings approximates the carrying value. The Companys long-term debt is all privately-held with no public market for this debt, therefore, the fair value of long-term debt was computed based on comparable current market data for similar debt instruments. |
Product Warranties
Product Warranties | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Product Warranties [Abstract] | |
Product Warranties | 16. Product Warranties The Company provides limited warranties in connection with the sale of its products. The warranty periods for products sold vary widely among the Companys operations, but for the most part do not exceed one year. The Company calculates its warranty expense provision based on past warranty experience and adjustments are made periodically to reflect actual warranty expenses. Changes in accrued product warranty obligation were as follows: Nine Months Ended September 30, 2009 2008 (In thousands) Balance at the beginning of the period $ 16,068 $ 14,433 Accruals for warranties issued during the period 6,586 6,809 Settlements made during the period (8,443 ) (7,004 ) Warranty accruals related to new businesses and other 1,861 749 Balance at the end of the period $ 16,072 $ 14,987 Certain settlements of warranties made during the period were for specific nonrecurring warranty obligations. Product warranty obligations are reported as current liabilities in the consolidated balance sheet. |
Reportable Segments
Reportable Segments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Reportable Segments [Abstract] | |
Reportable Segments | 17. Reportable Segments The Company has two reportable segments, the EIG and the EMG. The Company manages, evaluates and aggregates its operating segments for segment reporting purposes primarily on the basis of product type, production processes, distribution methods and management organizations. At September30, 2009, there were no significant changes in identifiable assets of reportable segments from the amounts disclosed at December31, 2008, nor were there any changes in the basis of segmentation or in the measurement of segment operating results. Operating information relating to the Companys reportable segments for the three and nine months ended September30, 2009 and 2008 can be found in the table within PartI, Item2 Managements Discussion and Analysis of Financial Condition and Results of Operations of this Report. |