Document and Entity Information
Document and Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | Apr. 16, 2010
| Jun. 30, 2009
| |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DOVER CORP | ||
Entity Central Index Key | 0000029905 | ||
Document Type | 10-Q | ||
Document Period End Date | 2010-03-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 | ||
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 | $6,159,218,863 | ||
Entity Common Stock, Shares Outstanding (actual number) | 186,759,146 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Condensed Consolidated Statements of Operations | ||
Revenue | $1,583,270 | $1,379,085 |
Cost of goods and services | 971,114 | 896,942 |
Gross profit | 612,156 | 482,143 |
Selling and administrative expenses | 409,169 | 367,390 |
Operating earnings | 202,987 | 114,753 |
Interest expense, net | 27,169 | 22,398 |
Other income, net | (1,242) | (1,736) |
Total interest/other income, net | 25,927 | 20,662 |
Earnings before provision for income taxes and discontinued operations | 177,060 | 94,091 |
Provision for income taxes | 55,575 | 32,997 |
Earnings from continuing operations | 121,485 | 61,094 |
Loss from discontinued operations, net | (13,359) | (7,669) |
Net earnings | $108,126 | $53,425 |
Basic earnings (loss) per common share: | ||
Earnings from continuing operations | 0.65 | 0.33 |
Loss from discontinued operations, net | -0.07 | -0.04 |
Net earnings | 0.58 | 0.29 |
Weighted average shares outstanding | 187,093 | 186,011 |
Diluted earnings (loss) per common share: | ||
Earnings from continuing operations | 0.65 | 0.33 |
Loss from discontinued operations, net | -0.07 | -0.04 |
Net earnings | 0.58 | 0.29 |
Weighted average shares outstanding | 187,886 | 186,121 |
Dividends paid per common share | 0.26 | 0.25 |
Weighted average shares outstanding - Basic | 187,093 | 186,011 |
Dilutive effect of assumed exercise of employee stock options, SAR's, and performance shares | 793 | 110 |
Weighted average shares outstanding - Diluted | 187,886 | 186,121 |
Anti-dilutive options, SAR's, and performance shares excluded from diluted EPS computation | 2,928 | 11,104 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current assets: | ||
Cash and equivalents | $690,295 | $714,365 |
Short-term investments | 321,709 | 223,809 |
Receivables, net of allowances of $39,873 and $41,832 | 990,405 | 878,754 |
Inventories, net | 619,528 | 570,858 |
Prepaid and other current assets | 59,579 | 64,922 |
Deferred tax asset | 74,186 | 69,999 |
Total current assets | 2,755,702 | 2,522,707 |
Property, plant and equipment, net | 822,636 | 828,922 |
Goodwill, net | 3,319,833 | 3,350,217 |
Intangible assets, net | 935,998 | 950,748 |
Other assets and deferred charges | 112,365 | 113,108 |
Assets of discontinued operations | 80,367 | 116,701 |
Total assets | 8,026,901 | 7,882,403 |
Current liabilities: | ||
Notes payable and current maturities of long-term debt | 162,937 | 35,624 |
Accounts payable | 437,597 | 357,004 |
Accrued compensation and employee benefits | 172,979 | 210,804 |
Accrued insurance | 106,357 | 107,455 |
Other accrued expenses | 215,781 | 219,295 |
Federal and other taxes on income | 90,803 | 38,994 |
Total current liabilities | 1,186,454 | 969,176 |
Long-term debt | 1,825,196 | 1,825,260 |
Deferred income taxes | 292,248 | 292,344 |
Other deferrals | 545,674 | 573,137 |
Liabilities of discontinued operations | 120,738 | 138,878 |
Commitments and contingent liabilities | ||
Stockholders' Equity: | ||
Total stockholders' equity | 4,056,591 | 4,083,608 |
Total liabilities and stockholders' equity | $8,026,901 | $7,882,403 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
Current assets: | ||
Allowance for doubtful accounts receivable | $39,873 | $41,832 |
2_Condensed Consolidated Statem
Condensed Consolidated Statement of Stockholders Equity (Unaudited) (USD $) | ||||||
In Thousands | Common Stock $1 Par Value
| Additional Paid-In Capital
| Accumulated Other Comprehensive Earnings (Loss)
| Retained Earnings
| Treasury Stock
| Total
|
Beginning Balance at Dec. 31, 2009 | $247,342 | $497,291 | $84,842 | $5,453,022 | ($2,198,889) | $4,083,608 |
Net earnings | 108,126 | 108,126 | ||||
Dividends paid | (48,696) | (48,696) | ||||
Common stock issued for options exercised | 504 | 18,310 | 18,814 | |||
Tax benefit from the exercise of stock options | 634 | 634 | ||||
Stock-based compensation expense | 6,733 | 6,733 | ||||
Common stock acquired | (28,701) | (28,701) | ||||
Translation of foreign financial statements | (85,267) | (85,267) | ||||
Unrealized holding gains, net of tax | 13 | 13 | ||||
Pension amortization, net of tax | 1,327 | 1,327 | ||||
Ending Balance at Mar. 31, 2010 | $247,846 | $522,968 | $915 | $5,512,452 | ($2,227,590) | $4,056,591 |
3_Condensed Consolidated Statem
Condensed Consolidated Statement of Stockholders Equity (Unaudited) (Parenthetical) | |
Mar. 31, 2010
| |
Statement of Stockholders' Equity [Abstract] | |
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 | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Operating Activities of Continuing Operations | ||
Net earnings | $108,126 | $53,425 |
Adjustments to reconcile net earnings to net cash from operating activities: | ||
Loss from discontinued operations | 13,359 | 7,669 |
Depreciation and amortization | 65,940 | 63,825 |
Stock-based compensation | 7,022 | 5,963 |
Cash effect of changes in current assets and liabilities (excluding effects of acquisitions, dispositions and foreign exchange): | ||
Accounts receivable | (127,517) | 127,465 |
Inventories | (55,347) | 13,382 |
Prepaid expenses and other assets | 4,635 | (4,359) |
Accounts payable | 87,996 | (21,119) |
Accrued expenses | (36,644) | (116,420) |
Accrued and deferred taxes, net | 43,054 | 19,428 |
Other non-current, net | (23,558) | (34,393) |
Net cash provided by operating activities of continuing operations | 87,066 | 114,866 |
Investing Activities of Continuing Operations | ||
Proceeds from sales of short-term investments | 173,697 | 97,295 |
Purchase of short-term investments | (291,687) | (89,320) |
Proceeds from the sale of property and equipment | 3,253 | 4,751 |
Additions to property, plant and equipment | (39,336) | (31,475) |
Proceeds from sales of businesses | 6,000 | 105 |
Net cash used in investing activities of continuing operations | (148,073) | (18,644) |
Financing Activities of Continuing Operations | ||
Change in notes payable, net | 127,500 | (77,511) |
Purchase of common stock | (28,701) | |
Proceeds from exercise of stock options/SARs including tax benefits | 19,448 | 1,237 |
Dividends to stockholders | (48,696) | (46,503) |
Net cash provided by (used in) financing activities of continuing operations | 69,551 | (122,777) |
Cash Flows From Discontinued Operations | ||
Net cash used in operating activities of discontinued operations | (1,025) | (6,770) |
Net cash used in investing activities of discontinued operations | (140) | (162) |
Net cash used in discontinued operations | (1,165) | (6,932) |
Effect of exchange rate changes on cash and cash equivalents | (31,449) | (13,612) |
Net decrease in cash and cash equivalents | (24,070) | (47,099) |
Cash and cash equivalents at beginning of period | 714,365 | 547,409 |
Cash and cash equivalents at end of period | $690,295 | $500,310 |
Basis of Presentation
Basis of Presentation | |
3 Months Ended
Mar. 31, 2010 | |
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 (Dover or the Company) Annual Report on Form 10-K for the year ended December31, 2009, 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. |
Acquisitions
Acquisitions | |
3 Months Ended
Mar. 31, 2010 | |
Acquisitions [Abstract] | |
Acquisitions | 2. Acquisitions The Company did not make any acquisitions in the current period and is in the process of finalizing appraisals of tangible and intangible assets and continuing to evaluate the initial purchase price allocations for acquisitions completed in 2009. Accordingly, management has used its best estimate in the initial purchase price allocation as of the date of these financial statements. In the first quarter of 2010, the Company recorded adjustments to goodwill by allocating $15.6 million primarily to customer-related intangibles and property, plant and equipment. Assuming that the acquisitions made throughout 2009 had all taken place on January1, 2009, the impact on the first quarter 2009 revenue and earnings would have been approximately $81.5million and $3.3million, respectively, with a $0.02 increase to both basic and diluted earnings per share. This information has been prepared for comparative purposes only and includes certain adjustments to actual financial results for the period presented, such as imputed financing costs, and estimated additional amortization and depreciation expense as a result of intangibles and fixed assets acquired. It does not purport to be indicative of the results of operations which actually would have resulted had the acquisitions occurred on the date indicated, or which 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 $0.8million and $0.9million at March31, 2010 and December31, 2009, respectively. During the three months ended March31, 2010 and 2009, the reserves were reduced by payments of $0.1million and $0.8million, respectively. |
Inventory
Inventory | |
3 Months Ended
Mar. 31, 2010 | |
Inventory [Abstract] | |
Inventory | 3. Inventory The following table displays the components of inventory: At March 31, At December 31, (in thousands) 2010 2009 Raw materials $ 299,457 $ 291,340 Work in progress 155,505 136,726 Finished goods 214,082 191,853 Subtotal 669,044 619,919 Less LIFO reserve 49,516 49,061 Total $ 619,528 $ 570,858 |
Property, Plant and Equipment
Property, Plant and Equipment | |
3 Months Ended
Mar. 31, 2010 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment, Net The following table details the components of property, plant and equipment, net: At March 31, At December 31, (in thousands) 2010 2009 Land $ 47,045 $ 48,010 Buildings and improvements 551,818 555,262 Machinery, equipment and other 1,838,812 1,840,638 2,437,675 2,443,910 Accumulated depreciation (1,615,039 ) (1,614,988 ) Total $ 822,636 $ 828,922 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 5. Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, trade receivables, accounts payable, notes payable and accrued expenses approximated fair value as of March31, 2010 and December31, 2009 due to the short maturity of less than one year for these instruments. Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities. Level 3 inputs are unobservable inputs that are supported by little or no market activity that are significant to the fair value of the assets or liabilities. The following table sets forth the Companys financial assets and liabilities that were measured at fair value on a recurring basis at March31, 2010 by the level within the fair value hierarchy: Fair Value Measurements Fair Value Measurements (in thousands) at March 31, 2010 at December 31, 2009 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Short-term investments $ 321,709 $ $ $ 223,809 $ $ Short-term investments are included in current assets in the Unaudited Condensed Consolidated Balance Sheets, and generally consist of investment grade time deposits with original maturities between three months and one year. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | |
3 Months Ended
Mar. 31, 2010 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Other Intangible Assets | 6. Goodwill and Other Intangible Assets The following table provides the changes in carrying value of goodwill by segment through the three months ended March31, 2010. There were no acquisitions in the current quarter that impacted goodwill. At December 31, 2009 Purchase Other Adjustments At March 31, 2010 Gross Carrying Accumulated Price Impairment Primarily Currency (in thousands) Amount Impairment Net Goodwill Adjustments Losses Translations Net Goodwill Electronic Technologies $ 979,506 $ $ 979,506 $ $ $ (7,013 ) $ 972,493 Industrial Products 1,020,202 (99,751 ) 920,451 (104 ) 920,347 Fluid Management 677,903 (59,971 ) 617,932 (1,583 ) (1,343 ) 615,006 Engineered Systems 832,328 832,328 (14,016 ) (6,325 ) 811,987 Total $ 3,509,939 $ (159,722 ) $ 3,350,217 $ (15,599 ) $ $ (14,785 ) $ 3,319,833 The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset: At March 31, 2010 Average At December 31, 2009 Gross Carrying Accumulated Life Gross Carrying Accumulated (in thousands, except for years) Amount Amortization (Years) Amount Amortization Amortized Intangible Assets: Trademarks $ 74,255 $ 17,648 15 $ 72,790 $ 16,492 Patents 131,801 85,367 16 128,041 84,092 Customer Intangibles 768,806 284,075 10 764,865 267,558 Unpatented Technologies 132,154 76,757 5 134,822 75,244 Non-Compete Agreements 3,399 3,326 5 3,396 3,310 Drawings Manuals 13,428 6,758 11 11,922 6,523 Distributor Relationships 73,180 21,873 11 73,230 20,974 Other 20,600 13,011 5 20,344 12,722 Total 1,217,623 508,815 10 1,209,410 486,915 Unamortized Intangible Assets: Trademarks 227,190 228,253 Total Intangible Assets $ 1,444,813 $ 508,815 $ 1,437,663 $ 486,915 |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes [Abstract] | |
Income Taxes | 7. 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 rate for the three months ended March31, 2010 was 31.4% compared to the prior period rate of 35.1%. The 2010 rate was favorably impacted primarily by a higher percentage of nonU.S. earnings derived from low tax rate jurisdictions. |
Discontinued Operations
Discontinued Operations | |
3 Months Ended
Mar. 31, 2010 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | 8. Discontinued Operations The activity during the first quarter of 2010 primarily reflects the sale of a business for net consideration of $7.5million which resulted in a net after-tax loss of approximately $13.1 million. The net consideration remains subject to the purchasers review and potential working capital adjustment. 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. Summarized results of the Companys discontinued operations are as follows: Three Months Ended March 31, (in thousands) 2010 2009 Revenue $ 9,380 $ 12,876 Loss on sale, net of taxes (1) $ (13,277 ) $ (7,445 ) Earnings from operations before taxes 425 28 Benefit (provision)for income taxes (507 ) (252 ) Loss from discontinued operations, net of tax $ (13,359 ) $ (7,669 ) (1) Includes impairments in 2009. At March31, 2010, the assets and liabilities of discontinued operations primarily represent 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. Additional detail related to the assets and liabilities of the Companys discontinued operations is as follows: At March 31, At December 31, (in thousands) 2010 2009 Assets of Discontinued Operations Current assets $ 59,305 $ 73,284 Non-current assets 21,062 43,417 $ 80,367 $ 116,701 Liabilities of Discontinued Operations Current liabilities $ 14,906 $ 25,919 Non-current liabilities 105,832 112,959 $ 120,738 $ 138,878 |
Hedging Activities and Debt
Hedging Activities and Debt | |
3 Months Ended
Mar. 31, 2010 | |
Hedging Activities and Debt [Abstract] | |
Hedging Activities and Debt | 9. 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 provision of ASC 815, Derivatives and Hedging, 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, 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, the effective portion of change in the fair value of the derivative is recorded in other comprehensive earnings and is 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 March31, 2010 includes a loss of $12.1million 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 three months of 2010, is recorded in cumulative translation adjustments and the $12.1 million is recorded 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 to the Company. Debt Dovers long-term debt with a book value of $1,860.6million, of which $35.4million matures in less than one year, had a fair value of approximately $1,975.1million at March31, 2010. The estimated fair value of the long-term debt is based on quoted market prices for similar issues. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingent Liabilities | 10. 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 March31, 2010 and 2009 are as follows: (in thousands) 2010 2009 Beginning Balance January 1 $ 59,713 $ 56,137 Provision for warranties 9,588 7,147 Increase (decrease)from acquisitions/dispositions 37 (411 ) Settlements made (9,266 ) (8,255 ) Foreign currency and other adjustments (721 ) (94 ) Ending Balance March 31 $ 59,351 $ 54,524 From time to time, the Company will initiate various restructuring programs at its operating companies and has recorded severance and other restructuring costs. For the three months ended March31, 2010, $0.1million and $2.0million 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 three months ended March31, 2009, $12.4 million and $22.8million of restructuring charges were recorded in cost of goods and services, and selling and administrative expenses, respectively. The following table details the Companys severance and other restructuring reserve activity: (in thousa |
Employee Benefit Plans
Employee Benefit Plans | |
3 Months Ended
Mar. 31, 2010 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | 11. Employee Benefit Plans The following table sets forth the components of net periodic expense: Retirement Plan Benefits Post Retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (in thousands) 2010 2009 2010 2009 Expected return on plan assets $ (9,621 ) $ (8,547 ) $ $ Benefits earned during period 4,850 5,003 69 79 Interest accrued on benefit obligation 9,632 9,268 208 240 Curtailment gain (337 ) Amortization (A): Prior service cost 2,158 2,249 (102 ) (43 ) Recognized actuarial (gain)loss 1,367 1,298 (100 ) (107 ) Transition obligation (11 ) (10 ) Other 20 Net periodic expense $ 8,395 $ 8,924 $ 75 $ 169 (A) A portion of the current year amortization amounts are recorded as increases (decreases)to accumulated other comprehensive income totaling approximately $1.3million, net of tax, and $2.3million, net of tax, for the three months ended March31, 2010 and 2009, respectively. |
Comprehensive Earnings
Comprehensive Earnings | |
3 Months Ended
Mar. 31, 2010 | |
Comprehensive Earnings [Abstract] | |
Comprehensive Earnings | 12. Comprehensive Earnings Comprehensive earnings were as follows: Three Months Ended March 31, (in thousands) 2010 2009 Net Earnings $ 108,126 $ 53,425 Foreign currency translation adjustment (85,267 ) (35,702 ) Unrealized holding gains (losses), net of tax 48 91 Derivative cash flow hedges, net of tax (35 ) 634 Pension amortization, net of tax 1,327 2,308 Comprehensive Earnings $ 24,199 $ 20,756 |
Segment Information
Segment Information | |
3 Months Ended
Mar. 31, 2010 | |
Segment Information [Abstract] | |
Segment Information | 13. Segment Information For management report and performance evaluation purposes, the Company categorizes its operating companies into four distinct reportable segments. Segment financial information and a reconciliation of segment results to consolidated results follows: Three Months Ended March 31, (in thousands) 2010 2009 REVENUE Industrial Products $ 428,797 $ 434,791 Engineered Systems 484,273 400,784 Fluid Management 380,800 330,772 Electronic Technologies 290,989 214,035 Intra segment eliminations (1,589 ) (1,297 ) Total consolidated revenue $ 1,583,270 $ 1,379,085 EARNINGS FROM CONTINUING OPERATIONS Segment Earnings: Industrial Products $ 51,039 $ 34,544 Engineered Systems 54,842 43,305 Fluid Management 86,767 75,442 Electronic Technologies 44,904 (12,110 ) Total segments 237,552 141,181 Corporate expense / other (33,323 ) (24,692 ) Net interest expense (27,169 ) (22,398 ) Earnings from continuing operations before provision for income taxes and discontinued operations 177,060 94,091 Provision for taxes 55,575 32,997 Earnings from continuing operations total consolidated $ 121,485 $ 61,094 |
Recent Accounting Standards
Recent Accounting Standards | |
3 Months Ended
Mar. 31, 2010 | |
Recent Accounting Standards [Abstract] | |
Recent Accounting Standards | 14. Recent Accounting Standards In January2010, the FASB issued Accounting Standards Update (ASU) 2010-06 which is intended to improve disclosures about fair value measurements. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels, the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). The Company has applied the new disclosure requirements as of January1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective for interim and annual periods beginning after December15, 2010. The adoption of this guidance has not had and is not expected to have a material impact on the Companys consolidated financial statements. In February2010, the FASB issued ASU 2010-09 which requires that an SEC filer, as defined, evaluate subsequent events through the date that the financial statements are issued. The update also removed the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated. The adoption of this guidance on January1, 2010 did not have a material effect on the Companys consolidated financial statements. In October2009, the FASB issued ASU 2009-13 which amends existing guidance for identifying separate deliverables in a revenue-generating transaction where multiple deliverables exist, and provides guidance for allocating and recognizing revenue based on those separate deliverables. The guidance is expected to result in more multiple-deliverable arrangements being separable than under current guidance. This guidance is effective for the Company beginning on January1, 2011 and is required to be applied prospectively to new or significantly modified revenue arrangements. The Company is currently assessing the impact this guidance may have on its consolidated financial statements. In October2009, the FASB issued ASU 2009-14 which eliminates tangible products containing both software and non-software components that operate together to deliver a products functionality from the scope of current generally accepted accounting principles for software. This guidance is effective for the Company beginning on January1, 2011 and is required to be applied prospectively to new or significantly modified revenue arrangements. The Company is currently assessing the impact this guidance may have on its consolidated financial statements. |
Equity Incentive Program
Equity Incentive Program | |
3 Months Ended
Mar. 31, 2010 | |
Equity Incentive Program [Abstract] | |
Equity Incentive Program | 15. Equity Incentive Program In the first quarter of 2010, the Company issued stock appreciation rights (SARs) covering 2,306,440 shares and 68,446 of performance share awards. In the first quarter of 2009, 2,796,124 SARs were issued. For the three months ended March31, 2010 and 2009, after-tax stock-based compensation expense totaled $4.6million and $3.9million, respectively. The fair value of each SAR grant was estimated on the date of the grant using the Black-Scholes option pricing model. The performance share awards are market condition awards and have been assessed at fair value on the date of grant using the Monte Carlo simulation model. The following assumptions were used in determining fair value: Q1 2010 Grant Q1 2010 Q1 2009 Performance Share Grant Grant Awards SARs SARs Risk-free interest rate 1.37 % 2.77 % 2.06 % Dividend yield 2.38 % 2.33 % 3.23 % Expected life (years) 2.88 6.0 6.5 Volatility 39.98 % 31.93 % 30.47 % Grant price $ 42.88 $ 42.88 $ 29.45 Fair value of options granted $ 57.49 $ 11.66 $ 6.58 |
Share Repurchases
Share Repurchases | |
3 Months Ended
Mar. 31, 2010 | |
Share Repurchases [Abstract] | |
Share Repurchases | 16. Share Repurchases In May 2007, the Board of Directors authorized the repurchase of up to 10,000,000 shares through May 2012. During the three months ended March 31, 2010, the Company repurchased 584,000 shares of its common stock in the open market and 35,926 shares from the holders of its employee stock options/SARs when they tendered shares as full or partial payment of the exercise price of such options/SARs. A total of 619,926 shares were repurchased at an average price of $46.33 per share. Treasury shares increased to 61,087,319 at March 31, 2010 from a balance of 60,467,393 at December 31, 2009. |
Subsequent Events
Subsequent Events | |
3 Months Ended
Mar. 31, 2010 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events The Company assessed events occurring subsequent to March31, 2010 for potential recognition and disclosure in the Unaudited Condensed Consolidated Financial Statements. No events have occurred that would require adjustment to or disclosure in the Unaudited Condensed Consolidated Financial Statements. |