Document and Company Informatio
Document and Company Information (USD $) | |||
9 Months Ended
Sep. 30, 2009 | Oct. 19, 2009
| Jun. 30, 2008
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | DOVER CORP | ||
Entity Central Index Key | 0000029905 | ||
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 | $9,086,204,325 | ||
Entity Common Stock, Shares Outstanding (actual number) | 186,176,669 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (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 |
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 | -0.01 | -0.06 | -0.29 |
Net earnings | 0.57 | 1.01 | 1.38 | 2.48 |
Weighted average shares outstanding - Basic | 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 | -0.01 | -0.06 | -0.29 |
Net earnings | 0.57 | $1 | 1.38 | 2.47 |
Weighted average shares outstanding - Dilutive | 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: | ||||
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 - Dilutive | 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 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 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 |
Stockholders' Equity: | ||
Total stockholders' equity | 4,040,414 | 3,792,866 |
Total liabilities and stockholders' equity | $7,772,311 | $7,883,238 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
Allowance for doubtful accounts receivable | $47,455 | $32,647 |
2_Condensed Consolidated Statem
Condensed Consolidated Statement of Stockholders Equity (Unaudited) (USD $) | ||||||
In Thousands | Common Stock $1 Par Value
| Additional Paid-In Capital
| Treasury Stock
| Retained Earnings
| Accumulated Other Comprehensive Earnings
| Total
|
Beginning Balance at Dec. 31, 2008 | $246,615 | $455,228 | ($2,206,251) | $5,286,458 | $10,816 | $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 | ||||
Ending Balance at Sep. 30, 2009 | 246,789 | 474,295 | (2,206,251) | 5,402,417 | 123,164 | 4,040,414 |
Beginning Balance at Jun. 30, 2009 | (2,206,251) | |||||
Ending Balance at Sep. 30, 2009 | ($2,206,251) |
3_Condensed Consolidated Statem
Condensed Consolidated Statement of Stockholders Equity (Parenthetical) (Unaudited) (USD $) | |
9/30/2009
| |
Preferred stock, par value per share | 100 |
Preferred stock, shares authorized | 100,000 |
Preferred stock, shares issued | 0 |
4_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Activities of Continuing Operations | ||
Net earnings | $257,390 | $470,104 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Loss from discontinued operations | 12,063 | 55,072 |
Depreciation and amortization | 191,900 | 197,884 |
Stock-based compensation | 14,926 | 21,882 |
Cash effect of changes in current assets and liabilities (excluding effects of acquisitions, dispositions and foreign exchange): | ||
Accounts receivable | 108,526 | (81,783) |
Inventories | 92,799 | (10,238) |
Prepaid expenses and other assets | 3,156 | 10,914 |
Accounts payable | (23,327) | 48,889 |
Accrued expenses | (102,124) | (290) |
Accrued and deferred taxes, net | 10,135 | 14,690 |
Other non-current, net | (11,331) | 12,939 |
Net cash provided by operating activities of continuing operations | 554,113 | 740,063 |
Investing Activities of Continuing Operations | ||
Purchase of short-term investments | (348,439) | (219,359) |
Proceeds from sale of short-term investments | 304,103 | 0 |
Proceeds from the sale of property and equipment | 12,995 | 6,420 |
Additions to property, plant and equipment | (83,250) | (133,319) |
Proceeds from sales of businesses | 1,375 | 12,774 |
Acquisitions (net of cash and cash equivalents acquired) | (43,264) | (99,852) |
Net cash used in investing activities of continuing operations | (156,480) | (433,336) |
Financing Activities of Continuing Operations | ||
Decrease in notes payable, net | (192,557) | (232,057) |
Reduction of long-term debt | (34,135) | (183,463) |
Proceeds from long-term debt | 0 | 594,120 |
Purchase of treasury stock | 0 | (466,736) |
Proceeds from exercise of stock options, including tax benefits | 5,297 | 78,652 |
Dividends to stockholders | (141,431) | (122,571) |
Net cash used in financing activities of continuing operations | (362,826) | (332,055) |
Cash Flows From Discontinued Operations | ||
Net cash (used in) provided by operating activities of discontinued operations | (15,863) | 6,309 |
Net cash used in investing activities of discontinued operations | (586) | (1,254) |
Net cash (used in) provided by discontinued operations | (16,449) | 5,055 |
Effect of exchange rate changes on cash | 31,737 | (9,900) |
Net increase (decrease) in cash and cash equivalents | 50,095 | (30,173) |
Cash and cash equivalents at beginning of period | 547,409 | 606,105 |
Cash and cash equivalents at end of period | $597,504 | $575,932 |
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 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 December31, 2008, which provides a more complete understanding of the Companys 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. |
Acquisitions
Acquisitions | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Acquisitions [Abstract] | |
Acquisitions | 2. Acquisitions The 2009 asset acquisitions are wholly-owned and had an aggregate cost of $43.0million, 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 Companys revenue and net earnings for the three and nine months ended September30, 2009 and 2008, assuming that the 2009 and 2008 acquisitions had all taken place on January1, 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 January1, 2009, the Company had reserves related to severance and facility closings of $21.8million and $27.9million at September 30, 2009 and December31, 2008, respectively. During the nine months ended September30, 2009 the reserves were reduced by payments of $6.9million of which $1.2 million was rec |
Inventory
Inventory | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Inventory [Abstract] | |
Inventory | 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 |
Property, Plant and Equipment
Property, Plant and Equipment | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 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 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | 5. Goodwill and Other Intangible Assets The following table provides the changes in carrying value of goodwill by segment through the nine months ended September30, 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 |
Income Taxes
Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes The Companys 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 September30, 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 September30, 2009 was improved by $28.4million 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 September30, 2008 was impacted by $8.8million 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 September30, 2009 compared to the prior year periods, absent the settlement of tax positions. |
Discontinued Operations
Discontinued Operations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 7. Discontinued Operations 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 $7.4million. Adjustments made during the second and third quarter of 2009 were nominal. The after-tax loss for the nine months ended September30, 2009 is approximately $7.7million. 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 $0.7million. During the second quarter of 2008, the Company discontinued Triton in the Engineered Systems segment and recorded a $51.1million 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 $2.0million. Summarized results of the Companys 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 ) (1) Includes impairments and other adjustments to the carrying value of assets held for sale or previously sold discontinued operations. At September30, 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 Companys 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. |
Hedging Activities and Debt
Hedging Activities and Debt | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Hedging Activities and Debt [Abstract] | |
Hedging Activities and Debt | 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 (Note11) 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 $50.0million, or CHF65.1million, 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 Companys net investment in non-U.S. operations and the fair value outstanding at September30, 2009 includes a loss of $13.4million 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 Companys 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 Companys 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 $2.4million in the third quarter ended September30, 2008. Debt The Companys long-term debt with a book value of $1,860.7million includes $33.7million which matures in less than one year and had a fair value of approximately $1,990.6million at September30, 2009. The estimated fair valu |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingent Liabilities | 9. Commitments and Contingent Liabilities A few of the Companys 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 Companys 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 Companys 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 Companys 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 September30, 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 January1, 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 September30, 2009, $3.2million and $5.4million 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 September30, 2009, $18.3 million and $43.9million of restructuring ch |
Employee Benefit Plans
Employee Benefit Plans | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 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 (A) A portion of the current year amortization amounts are recorded as increases (decreases) to Accumulated Other Comprehensive Income totaling approximately $2.7million, net of tax, and $2.0million, net of tax, for the three month periods ended September30, 2009 and 2008, respectively, and $7.3million, net of tax, and $6.0million, net of tax, for the nine month periods ended September30, 2009 and 2008, respectively. |
Comprehensive Earnings
Comprehensive Earnings | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Comprehensive Earnings [Abstract] | |
Comprehensive Earnings | 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 |
Segment Information
Segment Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Segment Information [Abstract] | |
Segment Information | 12. Segment Information: The Company has four reportable segments which are based on managements 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 |
Recent Accounting Standards
Recent Accounting Standards | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Recent Accounting Standards [Abstract] | |
Recent Accounting Standards | 13. Recent Accounting Standards In September2006, 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 November15, 2007 and did not require any new fair value measurements. The adoption of this guidance on January1, 2008 did not have a material effect on the Companys consolidated financial statements. In February 2008, the FASB delayed the effective date for nonfinancial assets and liabilities to fiscal years beginning after November15, 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 Companys consolidated financial statements. In December2007, 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 January1, 2009. The impact of ASC 805 did not have a material effect on the Companys consolidated financial statements since its adoption. In March2008, the FASB issued authoritative guidance under ASC 815 which provides users of financial statements with an enhanced understanding of an entitys derivative activity. The Company adopted this guidance as of January1, 2009 and has included related disclosures in Note 8. In April2008, 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 assets useful life. The guidance is to be applied prospectively to intangible assets acquired after December31, 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 January1, 2009. The impact of ASC 350 and ASC 275 did not have a material effect on the Companys consolidated financial statements since its |
Equity and Cash Incentive Progr
Equity and Cash Incentive Program | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Equity and Cash Incentive Program [Abstract] | |
Equity and Cash Incentive Program | 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 Companys 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 September30, 2009 and 2008, after-tax stock-based compensation expense totaled $9.7million and $14.2million, 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 |
Subsequent Events
Subsequent Events | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company assessed events occurring subsequent to September30, 2009 through October23, 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 October23, 2009. |