UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURTIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

Commission File Number: 1-4018

Dover Corporation

(Exact name of registrant as specified in its charter)

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

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

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by checkmark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act). Yes þ No o

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

The number of shares outstanding of the Registrant’s common stock as of October 26, 2005 was 202,668,076.

 

 

Dover Corporation
Form 10-Q
Table of Contents

Page				Item
PART I — FINANCIAL INFORMATION
				Item 1. Financial Statements (unaudited)
	1			Condensed Consolidated Statements of Operations
				(Three and nine months ended September 30, 2005 and 2004)
	2			Condensed Consolidated Balance Sheets
				(At September 30, 2005 and December 31, 2004)
	2			Condensed Consolidated Statement of Stockholders’ Equity
				(For the nine months ended September 30, 2005)
	3			Condensed Consolidated Statements of Cash Flows
				(For the nine months ended September 30, 2005 and 2004)
	4			Notes to Condensed Consolidated Financial Statements
	13			Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	22			Item 3. Quantitative and Qualitative Disclosures About Market Risk
	22			Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	23			Item 1. Legal Proceedings
	23			Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	23			Item 3. Defaults Upon Senior Securities
	23			Item 4. Submission of Matters to a Vote of Security Holders
	23			Item 5. Other Information
	23			Item 6. Exhibits
	24			Signatures
	25			Exhibit Index
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

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

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

DOVER CORPORATION

		Three Months Ended September 30,								Nine Months Ended September 30,
		2005				2004				2005				2004
Revenue		$	1,562,756			$	1,383,885			$	4,484,980			$	3,886,229
Cost of goods and services			1,026,589				911,447				2,947,986				2,540,070
Gross profit			536,167				472,438				1,536,994				1,346,159
Selling and administrative expenses			343,401				305,321				1,024,136				887,063
Operating income			192,766				167,117				512,858				459,096
Interest expense, net			16,248				15,933				47,598				45,949
Other income, net			(2,406	)			(1,645	)			(14,226	)			(1,775	)
Total interest/other expense, net			(13,842	)			(14,288	)			(33,372	)			(44,174	)
Income before provision for income taxes and discontinued operations			178,924				152,829				479,486				414,922
Provision for income taxes			46,329				40,185				128,566				116,561
Income from continuing operations			132,595				112,644				350,920				298,361
Income (loss) from discontinued operations, net			(9,915	)			7,620				43,095				17,279
Net income		$	122,680			$	120,264			$	394,015			$	315,640
Basic earnings (loss) per common share:
Income from continuing operations		$	0.65			$	0.55			$	1.73			$	1.47
Income (loss) from discontinued operations			(0.05	)			0.04				0.21				0.09
Net income			0.61				0.59				1.94				1.55
Weighted average shares outstanding			202,572				203,335				203,057				203,229
Diluted earnings (loss) per common share:
Income from continuing operations		$	0.65			$	0.55			$	1.72			$	1.46
Income (loss) from discontinued operations			(0.05	)			0.04				0.21				0.08
Net income			0.60				0.59				1.93				1.54
Weighted average shares outstanding			203,918				204,714				204,236				204,754
Dividends paid per common share		$	0.17			$	0.16			$	0.49			$	0.46

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

		Three Months Ended September 30,								Nine Months Ended September 30,
		2005				2004				2005				2004
Weighted average shares outstanding — Basic			202,572				203,335				203,057				203,229
Dilutive effect of assumed exercise of employee stock options			1,346				1,379				1,179				1,525
Weighted average shares outstanding — Diluted			203,918				204,714				204,236				204,754
Shares excluded from dilutive effect due to exercise price exceeding average market price of common stock			3,755				4,700				4,537				3,559

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

		At September 30, 2005				At December 31, 2004
Assets
Current assets:
Cash and equivalents		$	323,242			$	355,725
Receivables, net			1,024,758				869,760
Inventories, net			746,065				740,006
Deferred tax and other current assets			125,169				100,986
Total current assets			2,219,234				2,066,477
Property, plant and equipment, net			806,540				730,016
Goodwill			2,915,673				2,058,987
Intangible assets, net			569,832				528,137
Other assets and deferred charges			209,209				195,617
Assets of discontinued operations			84,307				208,468
Total assets		$	6,804,795			$	5,787,702
Liabilities
Current liabilities:
Short-term debt and commercial paper		$	543,910			$	339,265
Accounts payable			376,437				344,932
Accrued expenses			500,842				460,069
Federal and other taxes on income			145,514				176,733
Total current liabilities			1,566,703				1,320,999
Long-term debt			1,339,883				753,063
Deferred income taxes			309,966				296,147
Other deferrals (principally compensation)			266,250				241,182
Liabilities of discontinued operations			53,830				63,279
Stockholders’ Equity
Total stockholders’ equity			3,268,163				3,113,032
Total liabilities and stockholders’ equity		$	6,804,795			$	5,787,702

DOVER CORPORATION

										Accumulated
		Common				Additional				Other												Total
		Stock				Paid-In				Comprehensive				Retained				Treasury				Stockholders’
		$1 Par Value				Capital				Earnings (Loss)				Earnings				Stock				Equity
Balance at December 31, 2004		$	239,015			$	98,979			$	189,570			$	3,628,715			$	(1,043,247	)		$	3,113,032
Net income			—				—				—				394,015				—				394,015
Dividends paid			—				—				—				(99,434	)			—				(99,434	)
Common stock issued for options exercised			570				16,429				—				—				—				16,999
Stock acquired			—				—				—				—				(51,162	)			(51,162	)
Translation of foreign financial statements			—				—				(106,233	)			—				—				(106,233	)
Unrealized holding losses, net of tax			—				—				946				—				—				946
Balance at September 30, 2005		$	239,585			$	115,408			$	84,283			$	3,923,296			$	(1,094,409	)		$	3,268,163

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

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

		Nine Months Ended September 30,
		2005				2004
Operating Activities
Net income		$	394,015			$	315,640
Adjustments to reconcile net earnings to net cash from operating activities:
Income from discontinued operations			(43,095	)			(17,279	)
Depreciation and amortization			124,387				112,195
Changes in current assets and liabilities (excluding effects of acquisitions, dispositions and foreign exchange):
Increase in accounts receivable			(142,104	)			(153,069	)
Decrease (increase) in inventories			23,642				(82,346	)
Increase in prepaid expenses & other assets			(114	)			(6,901	)
Increase in accounts payable			19,136				93,746
Increase in accrued expenses			24,982				19,753
Increase (decrease) in accrued federal and other taxes payable			(16,250	)			51,275
Net change in current assets and liabilities			(90,708	)			(77,542	)
Contributions to defined benefit pension plan			(18,000	)			—
Net change in non-current assets & liabilities			6,786				27,549
Total adjustments			(20,630	)			44,923
Net cash provided by operating activities			373,385				360,563
Investing Activities
Proceeds from the sale of property and equipment			16,052				13,949
Additions to property, plant and equipment			(104,692	)			(69,010	)
Proceeds from sale of discontinued businesses			142,943				67,921
Acquisitions (net of cash and cash equivalents acquired)			(1,079,525	)			(313,542	)
Net cash used in investing activities			(1,025,222	)			(300,682	)
Financing Activities
Increase (decrease) in debt, net			785,005				(52,736	)
Purchase of treasury stock			(51,162	)			(4,912	)
Proceeds from exercise of stock options			13,529				10,901
Dividends to stockholders			(99,434	)			(93,507	)
Net cash provided by (used in) financing activities			647,938				(140,254	)
Effect of exchange rate changes on cash			(18,693	)			(3,859	)
Cash provided by (used in) discontinued operations			(9,891	)			21,399
Net decrease in cash and cash equivalents			(32,483	)			(62,833	)
Cash and cash equivalents at beginning of period			355,725				368,351
Cash and cash equivalents at end of period		$	323,242			$	305,518

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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 December 31, 2004, which provides a more complete understanding of Dover’s accounting policies, financial position, operating results, business properties and other matters. It is the opinion of management that these financial statements reflect all adjustments necessary for a fair presentation 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.

As previously disclosed, Dover expanded its subsidiary structure from four to six reportable segments effective January 1, 2005 and is reporting financial information on this basis effective January 1, 2005.

Certain amounts in prior years have been reclassified to conform to the current presentation.

2. Stock-Based Compensation

Dover maintains long-term incentive plans authorizing various types of market and performance based incentive awards that may be granted to officers and employees. The Company accounts for stock-based compensation under APB 25, and does not recognize stock-based compensation expense upon the grant of its stock options because the option terms are fixed and the exercise price equals the market price of the underlying stock on the grant date (see Note 13 for information related to new accounting rules for stock-based compensation that will impact Dover beginning January 1, 2006). All granted stock options have a term of ten years and cliff vest after three years.

The following table illustrates the effect on net income and basic and diluted earnings per share if compensation expense had been recognized upon grant of the options, based on the Black-Scholes option pricing model:

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except per share figures)		2005				2004				2005				2004
Net income, as reported		$	122,680			$	120,264			$	394,015			$	315,640
Deduct:
Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax effects			(4,735	)			(4,519	)			(14,133	)			(13,687	)
Pro forma net income		$	117,945			$	115,745			$	379,882			$	301,953
Earnings per share:
Basic—as reported		$	0.61			$	0.59			$	1.94			$	1.55
Basic—pro forma			0.58				0.57				1.87				1.49
Diluted—as reported		$	0.60			$	0.59			$	1.93			$	1.54
Diluted—pro forma			0.58				0.57				1.86				1.47

3. Acquisitions

Knowles Electronics Acquisition

On September 27, 2005, Dover, through its subsidiary Dover Electronics, Inc. (“Dover Electronics”), completed the acquisition of all the outstanding shares of Knowles Electronics Holding Inc. (“Knowles”) from Key Acquisition, L.L.C. and the other stockholders of Knowles for approximately $751 million, net of cash acquired. A portion of the purchase price was allocated to satisfy all outstanding debt obligations of Knowles, including the discharge of Knowles’ 13 1/8% Senior Subordinated Notes due October 15, 2009.

The acquisition of Knowles resulted in an excess purchase price over the book value of assets acquired of approximately $691 million, which was allocated to goodwill in the September 30, 2005 Condensed Consolidated Balance Sheet. The Company is in the process of obtaining appraisals of the tangible and intangible assets acquired and will evaluate and adjust the initial purchase price allocation as additional information relative to the fair values of the assets and liabilities becomes known.

Other Acquisitions

Including the Knowles acquisition described above, Dover completed eight acquisitions during the first nine months of 2005 (listed below), three of which were during the third quarter. During the first nine months of 2004, the Company completed six acquisitions, including two in the third quarter. The acquisitions have been appropriately accounted for under SFAS 141 “Business Combinations.” Accordingly, the accounts of the acquired companies, after adjustments to reflect fair market values assigned to assets and liabilities, have been included in the consolidated financial statements from their respective dates of acquisitions. The 2005 acquisitions are wholly owned and had an aggregate cost of $1,079.5 million, net of cash acquired, at the date of acquisition.

The following table is a summary of the estimated fair values of the assets acquired and liabilities assumed as of the dates of acquisition, subject to final purchase price allocations:

As of September 30, 2005

(in thousands)		Knowles				Other Acquisitions				Total
Current assets, net of cash acquired		$	62,395			$	45,665			$	108,060
P P & E			54,448				36,487				90,935
Goodwill			690,736				218,216				908,952
Intangibles & other assets			2,459				54,489				56,948
Total assets acquired		$	810,038			$	354,857			$	1,164,895
Total liabilities assumed			(59,500	)			(25,870	)			(85,370	)
Net assets acquired		$	750,538			$	328,987			$	1,079,525

The following table details all acquisitions made in 2005:

Date

Type

Acquired Companies

Location (Near)

Segment

Group

Operating Company

27-Sep

Stock

Knowles Electronics, Inc.

Itasca, Illinois

Electronics

Components

N/A

Manufacturer of advanced micro-acoustic component products for the hearing aid and consumer electronics industries.

7-Sep

Stock

Harbor Electronics, Inc.

Santa Clara, CA

Technologies

Circuit Assembly & Test

ECT

Manufacturer of complex, high-layer count, impedance controlled “interface” Printed Circuit Boards for the Semiconductor Test Industry.

5-Aug

Asset

Colder Products Company

St. Paul, Minnesota

Electronics

Components

N/A

Manufacturer of quick disconnect couplings for a wide variety of biomedical and commercial applications.

7-Jun

Stock

C-Tech Energy Services Inc.

Edmonton, Alberta

Resources

Petroleum Equipment

Energy Products Group

Manufacturer of continuous rod technology for oil and gas production.

2-Mar

Asset

APG

Longmont, Colorado

Technologies

Circuit Assembly & Test

ECT

Manufacturer of test fixtures for loaded circuit board testing.

23-Feb

Stock

Fas-Co Coders, Inc.

Phoenix, Arizona

Technologies

Product Identification

Imaje

Integrator of high resolution carton printers.

21-Feb

Asset

Rostone (Reunion Industries)

Lafayette, Indiana

Electronics

Components

Kurz-Kasch

Manufacturer of thermo set specialty plastics.

18-Jan

Asset

Avborne Accessory Group, Inc.

Miami, Florida

Diversified

Industrial Equipment

Sargent

Maintenance, repair, and overhaul of commercial, military and business aircraft.

The following unaudited pro forma information illustrates the effect on Dover’s revenue and net income for the three- and nine-month periods ended September 30, 2005 and 2004, assuming that the 2005 and 2004 acquisitions had all taken place on January 1, 2004.

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except per share figures)		2005				2004				2005				2004
Revenue from continuing operations:
As reported		$	1,562,756			$	1,383,885			$	4,484,980			$	3,886,229
Pro forma			1,625,895				1,531,663				4,706,421				4,382,367
Net income from continuing operations:
As reported		$	132,595			$	112,644			$	350,920			$	298,361
Pro forma			132,945				118,652				353,856				310,432
Basic earnings per share from continuing operations:
As reported		$	0.65			$	0.55			$	1.73			$	1.47
Pro forma			0.66				0.58				1.74				1.53
Diluted earnings per share from continuing operations:
As reported		$	0.65			$	0.55			$	1.72			$	1.46
Pro forma			0.65				0.58				1.73				1.52

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 additional amortization and depreciation expense as a result of intangibles and fixed assets acquired. They do 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.

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4. Inventory

The following table displays the components of inventory:

		September 30,				December 31,
(in thousands)		2005				2004
Raw materials		$	343,665			$	342,182
Work in progress			190,697				200,076
Finished goods			252,181				237,014
Subtotal			786,543				779,272
Less LIFO reserve			(40,478	)			(39,266	)
Total		$	746,065			$	740,006

5. Property, Plant and Equipment

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

		September 30,				December 31,
(in thousands)		2005				2004
Land		$	64,079			$	60,359
Buildings			490,153				484,928
Machinery and equipment			1,568,853				1,454,630
Accumulated depreciation			(1,316,545	)			(1,269,901	)
Total		$	806,540			$	730,016

6. Goodwill and Other Intangible Assets

Dover is continuing to evaluate the initial purchase price allocations of certain acquisitions and will adjust the allocations as additional information relative to the fair values of the assets and liabilities of the businesses becomes known. The Company is also in the process of obtaining appraisals of tangible and intangible assets for certain acquisitions.

The following table provides the changes in carrying value of goodwill by market segment through the nine months ended September 30, 2005:

										Other adjustments
						Goodwill from 2005				including currency
(in thousands)		At December 31, 2004				acquisitions				translations				At September 30, 2005
Diversified		$	218,853			$	55,751			$	(2,265	)		$	272,339
Electronics			161,118				795,156				(4,590	)			951,684
Industries			257,846				—				(1,453	)			256,393
Resources			626,909				9,028				(13,750	)			622,187
Systems			109,368				—				(2,143	)			107,225
Technologies			684,893				49,017				(28,065	)			705,845
Total		$	2,058,987			$	908,952			$	(52,266	)		$	2,915,673

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

		September 30, 2005								December 31, 2004
		Gross								Gross
		Carrying				Accumulated				Carrying				Accumulated
(in thousands)		Amount				Amortization				Amount				Amortization
Trademarks		$	30,149			$	12,243			$	30,061			$	11,082
Patents			105,439				55,919				95,996				60,213
Customer Intangibles			194,519				26,980				176,984				15,219
Unpatented Technologies			103,007				33,075				101,228				28,521
Non-Compete Agreements			6,775				6,074				8,377				7,288
Drawings & Manuals			5,964				3,489				5,989				2,722
Distributor Relationships			39,500				4,264				38,300				1,915
Other (primarily minimum pension liability)*			66,026				11,109				55,269				5,947
Total Amortizable Intangible Assets			551,379				153,153				512,204				132,907
Total Indefinite-Lived Trademarks			171,606				—				148,840				—
Total		$	722,985			$	153,153			$	661,044			$	132,907

7. Discontinued Operations

Cash proceeds from the sale of discontinued operations during the first nine months of 2005 and 2004 were $142.9 million and $67.9 million, respectively.

Additional detail related to the assets and liabilities of the Company’s discontinued operations is as follows:

		September 30,				December 31,
(in thousands)		2005				2004
Assets of Discontinued Operations
Current assets		$	59,586			$	84,684
Non-current assets			24,721				123,784
		$	84,307				208,468
Liabilities of discontinued operations
Current liabilities		$	33,068			$	38,012
Long-term liabilities			20,762				25,267
		$	53,830			$	63,279

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

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2005				2004				2005				2004
Other gain (loss), net of tax		$	(8,983	)		$	(300	)		$	35,560			$	(5,233	)
Income (loss) from operations, net of tax			(932	)			7,920				7,535				22,512
Income (loss) from discontinued operations, net of tax		$	(9,915	)		$	7,620			$	43,095			$	17,279

Three Months Ended September 30, 2005 and 2004

On August 11, 2005, Dover sold Somero Enterprises, a business in the Industries segment, resulting in a gain of approximately $31.8 million ($22.0 million after-tax). Also, during the third quarter of 2005, the company discontinued a business in the Systems segment, resulting in a goodwill impairment of approximately $55.0 million.

In addition, on September 23, 2005, Dover, through its subsidiary Dover Diversified, Inc., entered into an agreement to sell Tranter PHE for approximately $150 million. The closing of the transaction is subject to regulatory approval and other customary closing conditions.

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The results of these three businesses are classified as discontinued operations in the condensed consolidated statements of operations.

During the third quarter of 2004, Dover sold two previously discontinued businesses, one from the Industries segment and one from the Resources segment for net cash proceeds of approximately $45.6 million.

Nine Months Ended September 30, 2005 and 2004

During the second quarter of 2005, Dover discontinued Hydratight Sweeney, a business in the Diversified segment, which was sold on May 17, 2005 for a gain of approximately $49.0 million ($46.5 million after-tax). Also, during the first quarter of 2005, Dover discontinued one business from the Industries segment, which was subsequently sold on April 1, 2005 resulting in a loss of approximately $2 million.

During the second quarter of 2004, Dover sold two previously discontinued businesses from the Diversified segment for cash proceeds of $22.3 million.

8. Debt

Dover’s long-term notes with a book value of $1,591.0 million, of which $251.2 million matures in the current year, had a fair value of approximately $1,664.5 million at September 30, 2005. The estimated fair value of the long-term notes is based on quoted market prices for similar issues.

On September 1, 2005, Dover entered into a $400 million 364-day unsecured revolving credit facility with Bank of America, N.A. This credit facility has substantially the same terms as the Company’s $600 million 5-year credit agreement and is intended to be used primarily as liquidity back-up for the Company’s commercial paper program. The Company has not drawn down any loan under either the 364-day or 5-year credit facility, and does not anticipate doing so. As of September 30, 2005, the Company had commercial paper outstanding in the principal amount of $274.4 million, which reflects the application of the net proceeds from the subsequent sale of notes and debentures described below.

Subsequent to the quarter ended September 30, 2005, on October 26, 2005, the Company closed a new $1 billion 5-year unsecured revolving credit facility with a syndicate of banks that replaces both the $400 million 364-day facility and the 5-year $600 million facility. The credit facility has substantially the same terms as the facilities it replaces and is intended for the same purposes. The Company has not drawn down any loans under the $1 billion facility and does not anticipate doing so.

Subsequent to the quarter ended September 30, 2005, on October 13, 2005, Dover issued $300 million of 4.875% notes due 2015 and $300 million of 5.375% debentures due 2035. The net proceeds of $588.6 million from the notes and debentures were used to repay borrowings under Dover’s commercial paper program, and are reflected in long-term debt in the Company’s Condensed Consolidated Balance Sheet at September 30, 2005. The notes and debentures are redeemable at the option of Dover in whole or in part at any time at a redemption price that includes a make-whole premium, with accrued interest to the redemption date.

During the third quarter, Dover entered into several interest rate swaps related to the October 13, 2005 notes and debentures. As of September 30, 2005, Dover recorded a net unrealized gain related to these swaps in other comprehensive income of $1.5 million. The swap contracts were settled on October 13, 2005 and the resulting gain of $3.0 million will be deferred and amortized over the life of the related notes and debentures.

There are presently two interest rate swap agreements outstanding for a total notional amount of $100.0 million, designated as fair value hedges on part of the Company’s $150.0 million 6.25% Notes due on June 1, 2008, to exchange fixed-rate interest for variable-rate. The swap agreements have reduced the effective interest rate on the notes to 4.98%. There is no hedge ineffectiveness, and the fair value of the interest rate swaps outstanding as of September 30, 2005 was determined through market quotation.

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9. Commitments and Contingent Liabilities

A few of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites under federal and state statutes that provide for the allocation of such costs among “potentially responsible parties.” In each instance, the extent of the Company’s liability appears to be very small in relation to the total projected expenditures and the number of other “potentially responsible parties” involved, and is anticipated to be immaterial to the Company. In addition, a few of the Company’s subsidiaries are involved in ongoing remedial activities at certain 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. Management and legal counsel periodically 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, in the opinion of management, based on these reviews, it is remote 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 or cash flows 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 carrying amount of product warranties through September 30, 2005 and 2004 are as follows:

(in thousands)		2005				2004
Beginning Balance January 1		$	45,480			$	35,482
Provision for warranties			19,899				20,201
Settlements made			(18,621	)			(15,017	)
Other adjustments			(435	)			13
Ending Balance September 30		$	46,323			$	40,679

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)		2005				2004				2005				2004
Expected return on plan assets		$	6,408			$	6,877			$	—			$	—
Benefits earned during period			(3,897	)			(3,358	)			(75	)			(91	)
Interest accrued on benefit obligation			(5,866	)			(5,654	)			(261	)			(318	)
Amortization
Prior service cost			(1,769	)			(1,223	)			145				59
Unrecognized actuarial losses			(1,334	)			(936	)			(15	)			29
Transition			260				268				—				—
Net periodic expense		$	(6,198	)		$	(4,026	)		$	(206	)		$	(321	)

		Retirement Plan Benefits								Post Retirement Benefits
		Nine Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2005				2004				2005				2004
Expected return on plan assets		$	19,224			$	20,631			$	—			$	—
Benefits earned during period			(11,691	)			(10,074	)			(271	)			(549	)
Interest accrued on benefit obligation			(17,598	)			(16,962	)			(943	)			(1,438	)
Amortization
Prior service cost			(5,307	)			(3,669	)			187				(397	)
Unrecognized actuarial losses			(4,002	)			(2,808	)			(65	)			(47	)
Transition			780				804				—				—
Net periodic expense		$	(18,594	)		$	(12,078	)		$	(1,092	)		$	(2,431	)

During the third quarter of 2005, the Company contributed $18.0 million to the Knowles Electronics Holdings, Inc. pension plan. The Company does not anticipate making any additional employer discretionary contributions to defined benefit plan assets during the year ending December 31, 2005.

11. Comprehensive Income

Comprehensive income was as follows:

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2005				2004				2005				2004
Net Income		$	122,680			$	120,264			$	394,015			$	315,640
Foreign currency translation adjustment			5,637				10,313				(106,233	)			(17,791	)
Unrealized holding losses, net of tax			(40	)			(82	)			(320	)			(489	)
Unrealized gain on derivative cash flow hedges, net of tax			1,678				—				1,266				—
Comprehensive Income		$	129,955			$	130,495			$	288,728			$	297,360

12. Segment Information

Dover has six reportable segments which are based on the management 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,
		2005				2004				2005				2004
REVENUE
Diversified		$	185,222			$	148,128			$	566,969			$	449,526
Electronics			132,264				118,016				409,349				341,648
Industries			219,333				201,514				652,374				590,860
Resources			404,653				337,139				1,170,557				943,542
Systems			197,076				169,092				530,682				451,915
Technologies			426,767				412,414				1,162,780				1,115,629
Intramarket eliminations			(2,559	)			(2,418	)			(7,731	)			(6,891	)
Total consolidated revenue		$	1,562,756			$	1,383,885			$	4,484,980			$	3,886,229
INCOME FROM CONTINUING OPERATIONS
Diversified		$	23,123			$	16,586			$	66,512			$	54,076
Electronics			6,286				9,179				29,794				30,665
Industries			29,265				23,714				78,461				68,516
Resources			65,940				55,818				196,418				158,480
Systems			29,221				19,095				78,168				50,538
Technologies			54,557				58,065				121,204				137,464
Total segments			208,392				182,457				570,557				499,739
Corporate expense/other			(13,220	)			(13,695	)			(43,473	)			(38,868	)
Net interest expense			(16,248	)			(15,933	)			(47,598	)			(45,949	)
Income from continuing operations before provision for income taxes and discontinued operations			178,924				152,829				479,486				414,922
Provision for income taxes			46,329				40,185				128,566				116,561
Income from continuing operations — total consolidated		$	132,595			$	112,644			$	350,920			$	298,361

13. New Accounting Standards

In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS 154”), which replaces Accounting Principles Board Opinion (“APB”) No. 20 “Accounting Changes,” and SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements.” SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle, and applies to all voluntary changes in accounting principles, as well as changes required by an accounting pronouncement in the unusual instance that it does not include specific transition provisions. Specifically, SFAS 154 requires retrospective application to prior periods’ financial statements, unless it is impracticable to determine the period-specific effects or the cumulative

effect of the change. SFAS 154 does not change the transition provisions of any existing pronouncement. SFAS 154 is effective for Dover for all accounting changes and corrections of errors made beginning January 1, 2006.

In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”). FIN 47 clarifies that a conditional asset retirement obligation, as used in SFAS No. 143, “Accounting for Asset Retirement Obligations,” refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. FIN 47 is effective for the Company no later than the end of the 2005. The effect of FIN 47 will be immaterial to Dover’s consolidated results of operations, cash flows or financial position.

In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” (“SFAS 123R”). SFAS No. 123R revises previously issued SFAS 123 “Accounting for Stock-Based Compensation,” supersedes APB No.25 “Accounting for Stock Issued to Employees,” and amends SFAS Statement No. 95 “Statement of Cash Flows.” SFAS 123R will require Dover to expense the fair value of employee stock options and other forms of stock-based compensation for the annual periods beginning after June 15, 2005. The cost will be recognized over the period during which an employee is required to provide services in exchange for the award. The share-based award must be classified as equity or as a liability and the compensation cost is measured based on the fair value of the award at the date of the grant. In addition, liability awards will be re-measured at fair value each reporting period. Based on current guidance, Dover will begin to expense the fair value of employee stock options and other forms of stock-based compensation in the first quarter of 2006. The effect of the adoption of SFAS 123R will not be materially different from the pro-forma results included in Note 2 — Stock-Based Compensation.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary assets, an amendment of APB No. 29, Accounting for Nonmonetary Transactions” (“SFAS 153”). The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. The statement was effective for the Company beginning July 1, 2005 and was applied prospectively. The effect of the adoption of SFAS 153 was immaterial to Dover’s consolidated results of operations, cash flows or financial position.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of Accounting Research Bulletin No. 43, Chapter 4” (“SFAS 151”). SFAS 151 requires that abnormal amounts of idle capacity and spoilage costs should be excluded from the cost of inventory and expensed when incurred. The provisions of SFAS 151 are applicable to inventory costs incurred beginning January 1, 2006. The effect of the adoption of SFAS 151 will be immaterial to Dover’s consolidated results of operations, cash flow or financial position.

14. Other Events

Repatriation of Dividends

During the third quarter of 2005, the Company recorded a net tax provision of $9.7 million related to the planned repatriation of $290 million of foreign dividends under the provisions of the American Jobs Creation Act of 2004, which provides for a favorable income tax rate on repatriated earnings, provided the criteria of the law are met.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

OVERVIEW

Dover Corporation (“Dover” or the “Company”) is a multinational, diversified manufacturing corporation comprised of 48 stand-alone operating companies which manufacture a broad range of specialized industrial products and sophisticated manufacturing equipment. Dover also provides some engineering and testing services, which are not significant in relation to consolidated revenue. Dover’s operating companies are based primarily in the United States of America and Europe. The Company reports its results in six reportable segments and discusses their operations in 13 groups.

(1) FINANCIAL CONDITION:

Management assesses Dover’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. Significant factors affecting liquidity are: cash flows generated from operating activities, capital expenditures, acquisitions, dispositions, dividends, adequacy of available bank lines of credit and the ability to attract long-term capital with satisfactory terms.

Cash and cash equivalents of $323.2 million at September 30, 2005 decreased from the December 31, 2004 balance of $355.7 million. Cash and cash equivalents were invested in highly liquid investment grade money market instruments with a maturity of 90 days or less.

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

		Nine Months Ended September 30,
Cash Flows from Continuing Operations (in thousands, unaudited)		2005				2004
Cash Flows Provided By (Used In):
Operating activities		$	373,385			$	360,563
Investing activities			(1,025,222	)			(300,682	)
Financing activities			647,938				(140,254	)

Cash flows provided by operating activities for the first nine months of 2005 increased $12.8 million from $360.6 million in the prior year period, which included a tax refund of approximately $41 million in the first quarter of 2004. In addition, the increase in cash flows provided by operations reflected increased net income which was partially offset by an $18.0 million pension contribution in the current period and higher benefits and compensation payouts in 2005.

The level of cash used in investing activities for the first nine months of 2005 increased $724.5 million compared to the prior year period, largely reflecting an increase in acquisition and capital expenditure activity, partially offset by an increase in proceeds from dispositions. Acquisition expenditures for the first nine months of 2005 increased $766.0 million to $1,079.5 million from $313.5 million in the prior year period. Capital expenditures in the first nine months of 2005 increased $35.7 million to $104.7 million as compared to $69.0 million in the prior year period due to investments in plant expansions, plant machinery and information systems. Proceeds from sales of discontinued businesses in the first nine months of 2005 increased $75.0 million to $142.9 million from $67.9 million of proceeds in the prior year period. The Company currently anticipates that any additional acquisitions made during 2005 will be funded from available cash and internally generated funds and, if necessary, through the issuance of commercial paper, established lines of credit or public debt markets.

Cash provided by financing activities for the first nine months of 2005 totaled $647.9 million as compared to cash used in financing activities of $140.3 million during the similar period last year. The net change in

cash provided by financing activities of $788.2 during the first nine months of 2005 primarily reflected an increase in borrowings that were used to fund current year acquisitions.

Operational working capital (calculated as accounts receivable, plus inventory, less accounts payable) increased from the prior year period by $129.5 million or 10.2% to $1,394.4 million, primarily driven by increases in receivables of $155.0 million and increases in inventory of $6.1 million, offset by increases in payables of $31.5 million. Excluding the impact of changes in foreign currency of $38.7 million and acquisitions of $74.5 million, operational working capital increased approximately 1.3% when compared to the prior year period. The Company continues to focus on working capital management.

In addition to measuring its cash flow generation and usage based upon the operating, investing and financing classifications included in the Condensed Consolidated Statements of Cash Flows, the Company also measures free cash flow (a non-GAAP measure). Management believes that free cash flow is an important measure of operating performance because it provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase Dover’s common stock. Dover’s free cash flow for the nine months ended September 30, 2005, decreased $22.9 million compared to the prior year period, which included a tax refund of approximately $41 million in the first quarter of 2004. In addition, 2005 results reflected an $18 million contribution to the Knowles Electronics Holdings, Inc. pension plan, higher benefits and compensation payouts, and increased capital expenditures, partially offset by higher net income.

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

		Nine Months Ended September 30,
Free Cash Flow (in thousands, unaudited)		2005				2004
Cash flows provided by operating activities		$	373,385			$	360,563
Less: Capital expenditures			(104,692	)			(69,010	)
Free cash flow		$	268,693			$	291,553

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

		At September 30,				At December 31,
Net Debt to Total Capitalization Ratio (in thousands, unaudited)		2005				2004
Current maturities of long-term debt		$	251,102			$	252,677
Commercial paper and other short-term debt			292,808				86,588
Long-term debt			1,339,883				753,063
Total debt			1,883,793				1,092,328
Less: Cash and cash equivalents			323,242				355,725
Net debt			1,560,551				736,603
Add: Stockholders’ equity			3,268,163				3,113,032
Total capitalization		$	4,828,714			$	3,849,635
Net debt to total capitalization			32.3	%			19.1	%

The total debt level of $1,883.8 million at September 30, 2005 increased from December 31, 2004 as a result of an increase in borrowings to fund current year acquisitions. During the third quarter, Dover entered into a $400 million, 364-day unsecured revolving credit facility, which provides Dover with a total of $1 billion in unsecured revolving credit. The facilities are primarily used as liquidity back up for the Company’s commercial paper program. In addition, on October 13, 2005, the Company completed a public offering of $300 million in 4.875% notes due 2015 and $300 million in 5.375% debentures due 2035, the proceeds of which reduced commercial paper borrowings, and are reflected in long-term debt in the Company’s Condensed Consolidated Balance Sheet as of September 30, 2005. Further, on October 26, 2005, Dover completed a new 5-year, $1 billion unsecured revolving credit facility to replace its two existing facilities.

The net debt increase of $823.9 million was also primarily as a result of the increased borrowings described above. The net debt-to-total capitalization ratio increased from 19.1% at December 31, 2004 to 32.3%.

Dover’s long-term notes with a book value of $1,339.9 million, of which $251.1 million matures in the current year, had a fair value of approximately $1,664.5 million at September 30, 2005. The estimated fair value of the long-term notes is based on quoted market prices for similar issues.

During the third quarter, Dover entered into several interest rate swaps related to the October 13, 2005 notes and debentures. As of September 30, 2005, Dover recorded a net unrecognized gain related to these swaps in other comprehensive income of $1.5 million. The swap contracts were settled on October 13, 2005 and the resulting gain of $3.0 million will be deferred and amortized over the life of the related notes and debentures.

There are presently two interest rate swap agreements outstanding for a total notional amount of $100.0 million, designated as fair value hedges of part of the Company’s $150.0 million 6.25% Notes due on June 1, 2008, to exchange fixed-rate interest for variable-rate. The swap agreements have reduced the effective interest rate on the notes to 4.98%. There is no hedge ineffectiveness, and the fair value of the interest rate swaps outstanding as of September 30, 2005 was determined through market quotation.

(2) RESULTS OF OPERATIONS:

CONSOLIDATED RESULTS OF OPERATIONS

Revenue and Gross Profit

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, unaudited)		2005				2004				% Change				2005				2004				% Change
Revenue		$	1,562,756			$	1,383,885				13	%		$	4,484,980			$	3,886,229				15	%
Cost of goods and services			1,026,589				911,447				13	%			2,947,986				2,540,070				16	%
Gross profit			536,167				472,438				13	%			1,536,994				1,346,159				14	%
Gross profit margin			34.3	%			34.1	%							34.3	%			34.6	%

Revenue for the third quarter of 2005 increased 13% or $178.9 million from the comparable 2004 period, driven by increases of $67.5 million at Resources, $37.1 million at Diversified, $28.0 million at Systems, $17.8 million at Industries, $14.4 million at Technologies and $14.2 million at Electronics. Foreign currency had an immaterial effect on revenue in the quarter. Acquisitions completed subsequent to the third quarter of 2004 contributed $72.5 million to consolidated revenue during the quarter ended September 30, 2005.

Revenue for the nine months of 2005 increased 15% or $598.8 million from the comparable 2004 period, driven by increases of $227.0 million at Resources, $117.4 million at Diversified, $78.8 million at Systems, $67.7 million at Electronics, $61.5 million at Industries, and $47.2 million at Technologies. Revenue would have increased 14% to $4,438.9 million if 2004 foreign currency translation rates were applied to 2005 results. Acquisitions completed subsequent to the third quarter of 2004 contributed $176.3 million to consolidated revenue during the nine months ended September 30, 2005.

Selling and Administrative Expenses

Selling and administrative expenses for the third quarter and first nine months of 2005 increased $38.1 million and $137.1 million from the comparable 2004 periods, respectively, primarily due to increased revenue activity, while selling and administrative expenses as a percentage of revenue remained essentially flat.

Interest Expense, Net and Other Income, Net

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, unaudited)		2005				2004				% Change				2005				2004				% Change
Interest expense, net		$	16,248			$	15,933				2	%		$	47,598			$	45,949				4	%
Other income, net			(2,406	)			(1,645	)			46	%			(14,226	)			(1,775	)

Interest expense, net for the third quarter of 2005 remained essentially flat when compared to the prior year. Interest expense, net for the first nine months of 2005 increased $1.6 million, primarily due to an increase in commercial paper borrowings. Other income, net of $2.4 million and $14.2 million for the three and nine months ended September 30, 2005, respectively, primarily relates to the effects of foreign exchange fluctuations on assets and liabilities denominated in currencies other than the functional currency.

Income Taxes

The effective tax rate for continuing operations was 25.9% for the third quarter compared to the prior year quarter rate of 26.3%. The tax rate for the three months ended September 30, 2005, includes a $9.7 million provision related to the planned repatriation of approximately $290 million of dividends and a $21.9 million benefit primarily related to the conclusion of several federal and state income tax issues. The nine-month tax rate for continuing operations, which includes the two items above and a $5.5 million first quarter benefit related to a favorable federal tax resolution, was 26.8%, compared to 28.1% in the prior-year period. Excluding the aforementioned benefits and the repatriation provision, the current year nine-month tax rate for continuing operations was 30.4%. The nine-month increase over the prior year was primarily due to an increase in revenue not qualifying for United States tax incentives under the extraterritorial income exclusion regulations.

Discontinued Operations

Net loss from discontinued operations for the quarter was $9.9 million or $0.05 EPS compared to net income of $7.6 million or $0.04 EPS for the same period last year. In the third quarter of 2005, Dover discontinued and sold Somero Enterprises, which previously reported within the Mobile Equipment group of the Industries segment. Dover also discontinued and entered into an agreement to sell Tranter PHE, which previously reported within the Process Equipment group of the Diversified segment, and Dover discontinued one other business, which previously reported within the Packaging group of the Systems segment.

SEGEMENT RESULTS OF OPERATIONS

Diversified

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, unaudited)		2005				2004				% Change				2005				2004				% Change
Revenue		$	185,222			$	148,128				25	%		$	566,969			$	449,526				26	%
Segment Income			23,123				16,586				39	%			66,512				54,076				23	%
Operating margins			12.5	%			11.2	%							11.7	%			12.0	%
Bookings			184,600				166,815				11	%			615,240				501,372				23	%
Book-to-Bill			1.00				1.13								1.09				1.12
Backlog															296,561				239,057				24	%

Diversified revenue and income increases over the prior year quarter reflect improvements at both Industrial Equipment and Process Equipment. Bookings continued the trend of exceeding prior year levels with growth in the aerospace, defense, heat exchanger, and oil and gas markets.

Industrial Equipment revenue and income were up 26% and 25%, respectively, over the prior year quarter, primarily due to strong demand in the commercial aerospace and construction markets. The margin was essentially flat reflecting higher volume with moderating increases in steel prices, offset by unfavorable product mix. The automotive and powersports businesses were down, as gains in the North American professional racing market were impacted by lower international, aftermarket, and OEM sales. Bookings increased 11%, generating a book-to-bill ratio of 0.96, and backlog increased 22%.

Process Equipment achieved a 57% income improvement on a 23% increase in revenue, compared to the prior year quarter. Income growth was driven by higher volume, pricing adjustments, and productivity gains. The robust oil and gas market for bearings and the expanding European and Far East HVAC markets for heat exchangers were the primary drivers for these gains. Bookings increased 10%, backlog grew 31%, and the book-to-bill ratio was 1.07.

For the nine months ended September 30, 2005, the increases in Diversified revenue, income and bookings reflected improvements at both Industrial Equipment and Process Equipment. Industrial Equipment had revenue and income increases of 29% and 17%, respectively. Bookings increased 24% and the book-to-bill ratio was 1.07. Process Equipment had revenue and income increases of 19% and 35%, respectively. Bookings increased 20% and the book-to-bill ratio was 1.12.

Electronics

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, unaudited)		2005				2004				% Change				2005				2004				% Change
Revenue		$	132,264			$	118,016				12	%		$	409,349			$	341,648				20	%
Segment Income			6,286				9,179				-32	%			29,794				30,665				-3	%
Operating margins			4.8	%			7.8	%							7.3	%			9.0	%
Bookings			136,025				111,565				22	%			418,147				349,527				20	%
Book-to-Bill			1.03				0.95								1.02				1.02
Backlog															116,619				97,184				20	%

The increase in revenue over the prior year quarter in Electronics primarily reflects the Colder and Corning Frequency Controls (CFC) acquisitions, partially offset by the disruption to the Triton ATM business caused by Hurricane Katrina. The disruption in Triton’s business due to the hurricane, coupled with acquisition costs, resulted in a decrease in income, which was partially mitigated by improvements in the component businesses. Sequentially, quarterly revenue and income declined 7% and 52%, respectively, while bookings increased by 1%, resulting in a quarter-end backlog of $117 million.

Components recorded a 25% increase in revenue over the prior year quarter reflecting the impact of the CFC and Colder acquisitions. Income increased by 133% over the prior year quarter driven by the acquisitions, as well as cost reductions and efficiency gains in the core businesses. The margin was up 460 basis points compared to the prior year quarter. Sequentially, revenue was essentially flat as the

positive impact of acquisitions was offset by weaker shipments from core businesses. Sequential quarterly income increased by 21% due to the impact of Colder as well as improved core business margins. Orders finished on a strong note for the quarter, with a bookings increase of 37%, resulting in a book-to-bill ratio of 0.99, and backlog increased 17% compared to the prior year quarter.

Commercial Equipment revenue and income decreased 15% and 92%, respectively, from the prior year quarter due to hurricane Katrina’s disruption of the ATM business, with operations in Long Beach, Mississippi, and lower shipments in the chemical dispensing business. Losses related to the hurricane, which disrupted operations significantly in September, are estimated to be in the $5 to $6 million range for the quarter. It is expected that ATM operations will be restored to full capacity in the fourth quarter. Bookings were impacted to a lesser extent, declining 6% compared to the prior year quarter, resulting in a book-to-bill ratio of 1.15 and a 70% increase in backlog.

For the nine months ended September 30, 2005, the increases in Electronics revenue and bookings reflected improvements at both Components and Commercial Equipment, while income was essentially flat as a result of the disruption of the ATM business caused by hurricane Katrina. Components had revenue and income increases of 28% and 33%, respectively. Bookings increased 27% and the book-to-bill ratio was 1.02. Commercial Equipment revenue increased 3%, while income decreased 26%, due to the disruption in the ATM business. Bookings increased 3% and the book-to-bill ratio was 1.02.

Industries

		Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, unaudited)		2005				2004				% Change				2005				2004				% Change
Revenue		$	219,333			$	201,514				9	%		$	652,374			$	590,860				10	%
Segment Income			29,265				23,714				23	%			78,461				68,516				15	%
Operating margins			13.3	%			11.8	%							12.0	%			11.6	%
Bookings			227,825				199,904				14	%			662,863				628,379				5	%
Book-to-Bill			1.04				0.99								1.02				1.06
Backlog															213,376				208,961				2	%