UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

Dover Corporation

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

The number of shares outstanding of the Registrant’s common stock as of July 17, 2009 was 186,135,290.

 

 

Dover Corporation
Form 10-Q
Table of Contents

PART I – FINANCIAL INFORMATION

Page						Item
						Item 1. Financial Statements (unaudited)
	1					Condensed Consolidated Statements of Operations
						(For the three and six months ended June 30, 2009 and 2008)
	2					Condensed Consolidated Balance Sheets
						(At June 30, 2009 and December 31, 2008)
	2					Condensed Consolidated Statement of Stockholders’ Equity
						(For the six months ended June 30, 2009)
	3					Condensed Consolidated Statements of Cash Flows
						(For the six months ended June 30, 2009 and 2008)
	4					Notes to Condensed Consolidated Financial Statements
	14					Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	23					Item 3. Quantitative and Qualitative Disclosures About Market Risk
	23					Item 4. Controls and Procedures
	23					Item 4T. Controls and Procedures

PART II – OTHER INFORMATION

Page						Item
	23					Item 1. Legal Proceedings
	23					Item 1A. Risk Factors
	23					Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	23					Item 3. Defaults Upon Senior Securities
	24					Item 4. Submission of Matters to a Vote of Security Holders
	25					Item 5. Other Information
	25					Item 6. Exhibits
	26					Signatures
	27					Exhibit Index
EX-31.1
EX-31.2
EX-32
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

DOVER CORPORATION

		Three Months Ended June 30,								Six Months Ended June 30,
		2009				2008				2009				2008
Revenue		$	1,390,331			$	2,010,978			$	2,769,417			$	3,876,464
Cost of goods and services			897,021				1,271,359				1,793,963				2,457,299
Gross profit			493,310				739,619				975,454				1,419,165
Selling and administrative expenses			364,962				446,531				732,352				890,306
Operating earnings			128,348				293,088				243,102				528,859
Interest expense, net			24,840				27,388				47,238				50,819
Other expense (income), net			1,513				1,186				(223	)			3,719
Total interest/other expense, net			26,353				28,574				47,015				54,538
Earnings before provision for income taxes and discontinued operations			101,995				264,514				196,087				474,321
Provision for income taxes			1,121				77,604				34,118				139,480
Earnings from continuing operations			100,874				186,910				161,969				334,841
Loss from discontinued operations, net			(3,794	)			(51,634	)			(11,463	)			(52,387	)
Net earnings		$	97,080			$	135,276			$	150,506			$	282,454
Basic earnings (loss) per common share:
Earnings from continuing operations		$	0.54			$	0.99			$	0.87			$	1.76
Loss from discontinued operations, net			(0.02	)			(0.27	)			(0.06	)			(0.27	)
Net earnings			0.52				0.72				0.81				1.48
Weighted average shares outstanding			186,070				189,094				186,041				190,760
Diluted earnings (loss) per common share:
Earnings from continuing operations		$	0.54			$	0.98			$	0.87			$	1.74
Loss from discontinued operations, net			(0.02	)			(0.27	)			(0.06	)			(0.27	)
Net earnings			0.52				0.71				0.81				1.47
Weighted average shares outstanding			186,292				190,589				186,198				191,966
Dividends paid per common share		$	0.25			$	0.20			$	0.50			$	0.40
The following table is a reconciliation of the share amounts used in computing earnings per share:
		Three Months Ended June 30,								Six Months Ended June 30,
		2009				2008				2009				2008
Weighted average shares outstanding — Basic			186,070				189,094				186,041				190,760
Dilutive effect of assumed exercise of employee stock options/SAR’s			222				1,495				157				1,206
Weighted average shares outstanding — Diluted			186,292				190,589				186,198				191,966
Anti-dilutive options/SAR’s excluded from diluted EPS computation			13,365				3,778				13,538				3,778

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

		At June 30, 2009				At December 31, 2008
Current assets:
Cash and equivalents		$	693,560			$	547,409
Short-term investments			142,544				279,460
Receivables, net of allowances of $39,169 and $32,647			872,193				1,013,174
Inventories, net			592,160				636,121
Prepaid and other current assets			105,846				80,268
Deferred tax asset			74,015				73,687
Total current assets			2,480,318				2,630,119
Property, plant and equipment, net			849,466				872,134
Goodwill			3,256,503				3,255,566
Intangible assets, net			917,063				952,409
Other assets and deferred charges			112,079				103,904
Assets of discontinued operations			55,025				69,106
Total assets		$	7,670,454			$	7,883,238
Current liabilities:
Notes payable and current maturities of long-term debt		$	134,044			$	224,944
Accounts payable			348,971				373,436
Accrued compensation and employee benefits			179,739				305,572
Accrued insurance			107,777				104,938
Other accrued expenses			215,824				209,619
Federal and other taxes on income			14,135				35,005
Total current liabilities			1,000,490				1,253,514
Long-term debt			1,844,741				1,860,729
Deferred income taxes			328,437				314,405
Other deferrals			533,918				582,601
Liabilities of discontinued operations			58,960				79,123
Commitments and contingent liabilities
Stockholders’ Equity:
Total stockholders’ equity			3,903,908				3,792,866
Total liabilities and stockholders’ equity		$	7,670,454			$	7,883,238

DOVER CORPORATION

										Accumulated
		Common				Additional				Other												Total
		Stock				Paid-In				Comprehensive				Retained				Treasury				Stockholders’
		$1 Par Value				Capital				Earnings				Earnings				Stock				Equity
Balance at 12/31/2008		$	246,615			$	455,228			$	10,816			$	5,286,458			$	(2,206,251	)		$	3,792,866
Net earnings			—				—				—				150,506				—				150,506
Dividends paid			—				—				—				(93,033	)			—				(93,033	)
Common stock issued for options exercised			139				4,073				—				—				—				4,212
Tax benefit from the exercise of stock options			—				(245	)			—				—				—				(245	)
Stock-based compensation expense			—				10,345				—				—				—				10,345
Translation of foreign financial statements			—				—				33,517				—				—				33,517
Unrealized holding gains, net of tax			—				—				1,124				—				—				1,124
SFAS 158 amortization, net of tax			—				—				4,616				—				—				4,616
Balance at 6/30/2009		$	246,754			$	469,401			$	50,073			$	5,343,931			$	(2,206,251	)		$	3,903,908

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

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

		Six Months Ended June 30,
		2009				2008
Operating Activities of Continuing Operations
Net earnings		$	150,506			$	282,454
Adjustments to reconcile net earnings to net cash provided by operating activities:
Loss from discontinued operations			11,463				52,387
Depreciation and amortization			127,560				130,714
Stock-based compensation			11,039				14,033
Changes in current assets and liabilities (excluding effects of acquisitions, dispositions and foreign exchange):
Decrease (increase) in accounts receivable			152,340				(91,411	)
Decrease (increase) in inventories			58,915				(9,600	)
(Increase) decrease in prepaid expenses and other assets			(24,665	)			7,313
(Decrease) increase in accounts payable			(26,839	)			47,779
Decrease in accrued expenses			(119,433	)			(51,063	)
Decrease in accrued and deferred taxes, net			(14,512	)			(1,648	)
Other non-current, net			(19,072	)			5,020
Net cash provided by operating activities of continuing operations			307,302				385,978
Investing Activities of Continuing Operations
Purchase of short-term investments			(96,193	)			—
Proceeds from sale of short-term investments			226,794				—
Proceeds from the sale of property and equipment			8,727				4,620
Additions to property, plant and equipment			(58,451	)			(85,115	)
Proceeds from sales of businesses			1,375				8,000
Acquisitions (net of cash and cash equivalents acquired)			(34,288	)			(99,751	)
Net cash provided by (used in) investing activities of continuing operations			47,964				(172,246	)
Financing Activities of Continuing Operations
Decrease in notes payable, net			(92,270	)			(175,830	)
Reduction of long-term debt			(14,545	)			(166,606	)
Proceeds from long-term debt			—				594,120
Purchase of treasury stock			—				(352,393	)
Proceeds from exercise of stock options, including tax benefits			3,966				61,549
Dividends to stockholders			(93,033	)			(76,300	)
Net cash used in financing activities of continuing operations			(195,882	)			(115,460	)
Cash Flows From Discontinued Operations
Net cash (used in) provided by operating activities of discontinued operations			(18,664	)			8,465
Net cash (used in) investing activities of discontinued operations			(244	)			(1,603	)
Net cash (used in) provided by discontinued operations			(18,908	)			6,862
Effect of exchange rate changes on cash			5,675				31,374
Net increase in cash and cash equivalents			146,151				136,508
Cash and cash equivalents at beginning of period			547,409				606,105
Cash and cash equivalents at end of period		$	693,560			$	742,613

See Notes to Condensed Consolidated Financial Statements

DOVER CORPORATION

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, 2008, which provides a more complete understanding of Dover’s accounting policies, financial position, operating results, business properties and other matters. The year-end condensed consolidated balance sheet was derived from audited financial statements. It is the opinion of management that these financial statements reflect all adjustments necessary for a fair statement of the interim results. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year.

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

2. Acquisitions

The 2009 acquisition is wholly-owned and had an aggregate cost of $34.3 million, net of cash acquired, at the date of acquisition. The following table details the acquisition made during 2009.

2009 Acquisition

Date

Type

Acquired Companies

Location (Near)

Segment

Platform

Company

8-May

Asset

Tyler Refrigeration

Niles, MI

Engineered Systems

Engineered Products

Hill PHOENIX

For the Tyler acquisition, the Company is in the process of finalizing an appraisal 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 business becomes known. Accordingly, management has used its best estimate in the initial purchase price allocation as of the date of these financial statements.

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

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands, except per share figures)		2009				2008				2009				2008
Revenue from continuing operations:
As reported		$	1,390,331			$	2,010,978			$	2,769,417			$	3,876,464
Pro forma			1,411,800				2,067,430				2,845,155				4,000,384
Net earnings from continuing operations:
As reported		$	100,874			$	186,910			$	161,969			$	334,841
Pro forma			101,200				189,123				163,118				340,223
Basic earnings per share from continuing operations:
As reported		$	0.54			$	0.99			$	0.87			$	1.76
Pro forma			0.54				1.00				0.88				1.78
Diluted earnings per share from continuing operations:
As reported		$	0.54			$	0.98			$	0.87			$	1.74
Pro forma			0.54				0.99				0.88				1.77

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

In connection with certain acquisitions that occurred prior to January 1, 2009, the Company had reserves related to severance and facility closings of $26.4 million and $27.9 million at June 30, 2009 and December 31, 2008, respectively. The reserves were recorded as of the date of acquisition and in accordance with the provisions of Emerging Issues Task Force Issue No. 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.” During the six months ended June 30, 2009, the reserves were reduced by payments of $1.7 million.

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

3. Inventory

The following table displays the components of inventory:

		At June 30,				At December 31,
(in thousands)		2009				2008
Raw materials		$	305,493			$	319,407
Work in progress			139,707				144,017
Finished goods			201,775				231,507
Subtotal			646,975				694,931
Less LIFO reserve			54,815				58,810
Total		$	592,160			$	636,121
4. Property, Plant and Equipment
The following table displays the components of property, plant and equipment:
		At June 30,				At December 31,
(in thousands)		2009				2008
Land		$	49,267			$	49,015
Buildings and improvements			546,856				547,223
Machinery, equipment and other			1,811,051				1,792,615
			2,407,174				2,388,853
Accumulated depreciation			(1,557,708	)			(1,516,719	)
Total		$	849,466			$	872,134

5. Goodwill and Other Intangible Assets

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

										Other
										adjustments,
						Goodwill from				including
		At December 31,				2009				currency				At June 30,
(in thousands)		2008				acquisition				translations				2009
Electronic Technologies		$	976,706			$	—			$	265			$	976,971
Industrial Products			919,215				—				(1,669	)			917,546
Fluid Management			571,221				—				874				572,095
Engineered Systems			788,424				—				1,467				789,891
Total		$	3,255,566			$	—			$	937			$	3,256,503

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

		At June 30, 2009												At December 31, 2008
										Average
		Gross Carrying				Accumulated				Life				Gross Carrying				Accumulated
(dollar amounts in thousands)		Amount				Amortization				(Years)				Amount				Amortization
Amortized Intangible Assets:
Trademarks		$	66,949			$	14,330				15			$	32,223			$	12,453
Patents			128,686				82,746				13				129,233				79,241
Customer Intangibles			689,296				233,041				9				681,636				200,169
Unpatented Technologies			133,564				67,963				9				129,303				61,871
Non-Compete Agreements			3,479				3,414				5				3,475				3,400
Drawings & Manuals			13,718				5,995				5				13,653				5,441
Distributor Relationships			73,211				19,048				20				72,413				17,193
Other			18,382				11,614				14				22,725				10,270
Total			1,127,285				438,151				11				1,084,661				390,038
Unamortized Intangible Assets:
Trademarks			227,929												257,786
Total Intangible Assets		$	1,355,214			$	438,151							$	1,342,447			$	390,038

6. Income Taxes

The Company’s provision for income taxes for continuing operations in interim periods is computed by applying its estimated annual effective tax rate against earnings before income tax expense for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The effective tax rates for the three and six months ended June 30, 2009 were 1.1% and 17.4% compared to the prior year rates of 29.3% and 29.4%, respectively. The effective tax rates for the three and six months ended June 30, 2009 were favorably impacted by $28.4 million of net benefits recognized for tax positions that were effectively settled in the quarter.

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 $7.4 million. Adjustments made during the second quarter of 2009 were nominal.

2008

During the second quarter of 2008, the Company discontinued Triton in the Engineered Systems segment and recorded a $51.1 million write-down to the carrying value of Triton to its estimated fair market value and other adjustments.

During the first quarter of 2008, the Company recorded adjustments to the carrying value of a business held for sale and other adjustments resulting in a net after-tax loss of approximately $2.0 million.

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

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2009				2008				2009				2008
Revenue		$	13,457			$	26,354			$	26,333			$	53,119
Loss on sale, net of taxes (1)		$	(9	)		$	(50,993	)		$	(7,454	)		$	(52,972	)
Loss from operations before taxes			(2,912	)			(823	)			(2,884	)			(18	)
Benefit (provision) for income taxes			(873	)			182				(1,125	)			603
Loss from discontinued operations, net of tax		$	(3,794	)		$	(51,634	)		$	(11,463	)		$	(52,387	)

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

		At June 30,				At December 31,
(in thousands)		2009				2008
Assets of Discontinued Operations
Current assets		$	32,644			$	32,498
Non-current assets			22,381				36,608
		$	55,025			$	69,106
Liabilities of Discontinued Operations
Current liabilities		$	8,182			$	13,371
Non-current liabilities			50,778				65,752
		$	58,960			$	79,123

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

8. Hedging Activities and Debt

Hedging Activities

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

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities” and related amendments and interpretations, 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 portions of changes in the fair value of the derivative are recorded in other comprehensive earnings and are recognized in the statement of operations when the hedged item affects income. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings.

There is presently one outstanding swap agreement for a total notional amount of $50.0 million, or CHF65.1 million, which swaps the U.S. dollar 6-month LIBOR rate and the Swiss Franc 6-month LIBOR rate. This agreement hedges a portion of the Company’s net investment in non-U.S. operations and the fair value outstanding at June 30, 2009 was a loss of $10.4 million which was based on quoted market prices for similar instruments (using Level 2 inputs under the SFAS No. 157 hierarchy). The change in fair value of this hedge, which was not significant during the first six months of 2009, is recorded in Other Expense (Income), net and the $10.4 million is recorded in Other Deferrals in the Unaudited Condensed Consolidated Balance Sheet. This hedge is effective.

The Company’s other hedging activity is not significant; therefore tabular disclosures are not presented. There are no amounts excluded from the assessment of hedge effectiveness and there are no credit risk related contingent features in the Company’s derivative instruments. In addition, the amount of gains or losses from hedging activity recorded in earnings is not significant and the amount of unrealized gains or losses from cash flow hedges which are expected to be reclassified to earnings in the next twelve months is not significant to Dover.

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Debt

The Company’s long-term debt with a book value of $1,878.4 million, of which $33.6 million matures in less than one year, had a fair value of approximately $1,879.2 million at June 30, 2009. The estimated fair value of the long-term debt is based on quoted market prices, and present value techniques used to value similar instruments.

During the second quarter ended June 30, 2008, the Company repaid its $150 million 6.25% Notes due June 1, 2008. In addition, on March 14, 2008, Dover issued $350 million of 5.45% Notes due 2018 and $250 million of 6.60% Notes due 2038. The net proceeds of $594.1 million from the notes were used to repay borrowings under Dover’s commercial paper program, and were reflected in long-term debt in the Consolidated Balance Sheet at December 31, 2008. The notes and debentures are redeemable at the option of 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 first quarter of 2008, Dover entered into several interest rate swaps in anticipation of the debt financing completed on March 14, 2008 which, upon settlement, resulted in a net gain of $1.2 million which was deferred and will be amortized over the life of the related notes.

9. Commitments and Contingent Liabilities

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

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

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

(in thousands)		2009				2008
Beginning Balance January 1		$	56,137			$	55,437
Provision for warranties			15,219				21,608
Increase from acquisitions/dispositions			2,737				100
Settlements made			(16,924	)			(18,712	)
Other adjustments			66				649
Ending Balance June 30		$	57,235			$	59,082

From time to time, the Company will initiate various restructuring programs at its operating companies or record severance and other restructuring costs in connection with purchase accounting for acquisitions prior to January 1, 2009 (see Note 2 for additional detail). In the second half of 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 second quarter of 2009, $5.1 million and $13.4 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations. For the six months ended June 30, 2009, $17.9 million and $35.8 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

(in thousands)		Severance				Exit				Total
At December 31, 2008 (A)		$	7,203			$	23,754			$	30,957
Provision			41,320				12,306				53,626
Payments			(28,610	)			(4,784	)			(33,394	)
Other, including impairments			1,875				(4,150	)			(2,275	)
At June 30, 2009 (B)		$	21,788			$	27,126			$	48,914

10. Employee Benefit Plans

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

		Retirement Plan Benefits								Post Retirement Benefits
		Three Months Ended June 30,								Three Months Ended June 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
		Six Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2009				2008				2009				2008
Expected return on plan assets		$	(17,094	)		$	(17,324	)		$	—			$	—
Benefits earned during period			10,006				11,002				158				145
Interest accrued on benefit obligation			18,536				19,518				480				474
Curtailment gain			(337	)			—				—				—
Amortization (A):
Prior service cost			4,498				4,318				(86	)			(86	)
Recognized actuarial (gain) loss			2,596				2,376				(214	)			(248	)
Transition obligation			(20	)			(36	)			—				—
Net periodic expense		$	18,185			$	19,854			$	338			$	285

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

11. Comprehensive Earnings

Comprehensive earnings were as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
(in thousands)		2009				2008				2009				2008
Net Earnings		$	97,080			$	135,276			$	150,506			$	282,454
Foreign currency translation adjustment			69,193				12,796				33,517				76,330
Unrealized holding gains (losses), net of tax			8				9				99				(206	)
Derivative cash flow hedges, net of tax			392				(6	)			1,025				1,118
SFAS 158 amortization, net of tax			2,308				2,013				4,616				3,982
Comprehensive Earnings		$	168,981			$	150,088			$	189,763			$	363,678
12. Segment Information
Dover has four reportable segments which are based on management’s reporting structure used to evaluate performance. Segment financial information and a reconciliation of segment results to consolidated results follows:
(in thousands)		Three Months Ended June 30								Six Months Ended June 30,
		2009				2008				2009				2008
REVENUE
Industrial Products		$	382,948			$	649,006			$	817,739			$	1,265,780
Engineered Systems			467,417				538,729				868,201				1,037,951
Fluid Management			295,270				446,630				626,042				847,929
Electronic Technologies			245,953				379,958				459,988				731,715
Intra — segment eliminations			(1,257	)			(3,345	)			(2,553	)			(6,911	)
Total consolidated revenue		$	1,390,331			$	2,010,978			$	2,769,417			$	3,876,464
EARNINGS FROM CONTINUING OPERATIONS
Segment Earnings:
Industrial Products		$	25,421			$	87,925			$	59,966			$	166,763
Engineered Systems			57,462				80,045				100,767				143,041
Fluid Management			55,573				97,878				131,014				183,017
Electronic Technologies			17,993				51,029				5,883				87,263
Total segments			156,449				316,877				297,630				580,084
Corporate expense / other			(29,614	)			(24,975	)			(54,305	)			(54,944	)
Net interest expense			(24,840	)			(27,388	)			(47,238	)			(50,819	)
Earnings from continuing operations before provision
for income taxes and discontinued operations			101,995				264,514				196,087				474,321
Provision for taxes			1,121				77,604				34,118				139,480
Earnings from continuing operations — total consolidated		$	100,874			$	186,910			$	161,969			$	334,841

13. Recent Accounting Standards

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), 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 statement was effective for fiscal periods beginning after November 15, 2007 and did not require any new fair value measurements. The adoption of SFAS No. 157 on January 1, 2008 did not have a material effect on the Company’s consolidated financial statements. In February 2008, the FASB Staff Position No. 157-2 was issued which delayed the effective date of FASB Statement No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities, 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 SFAS No. 157 related to “non-financial assets” did not have a material effect on the Company’s consolidated financial statements.

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141(R)”). SFAS No. 141(R) retains the fundamental requirements in Statement 141 that the acquisition method of accounting (which Statement 141 called 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) broadens the guidance of SFAS No. 141, extending 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 statement prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The impact of SFAS No. 141(R) did not have a material effect on the Company’s consolidated financial statements since its adoption.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 requires that a noncontrolling interest in a subsidiary be reported as equity and the amount of consolidated net income specifically attributable to the noncontrolling interest be identified in the consolidated financial statements. It also requires consistency in the manner of reporting changes in the parent’s ownership interest and requires fair value measurement of any noncontrolling equity investment retained in a deconsolidation. The Company has applied the provisions of this statement prospectively, as required, beginning on January 1, 2009. The adoption of SFAS No. 160 did not have a material effect on the Company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS No. 161”).  SFAS No. 161 amends and expands the disclosure requirements of SFAS No. 133 with the intent to provide users of financial statements with an enhanced understanding of an entity’s derivative activity. The Company adopted this standard as of January 1, 2009 and has included related disclosures in Note 8.

In April 2008, the FASB issued FASB Staff Position No. 142-3 “Determination of the Useful Life of Intangible Assets” (“FSP No. 142-3”) to improve the consistency between the useful life of a recognized intangible asset (under SFAS No. 142) and the period of expected cash flows used to measure the fair value of the intangible asset (under SFAS No. 141(R)). FSP No. 142-3 amends the factors to be considered when developing renewal or extension assumptions that are used to estimate an intangible asset’s useful life under SFAS No. 142. The guidance in the new staff position is to be applied prospectively to intangible assets acquired after December 31, 2008. In addition, FSP No. 142-3 increases the disclosure requirements related to renewal or extension assumptions. The Company has applied the provisions of this statement to business combinations for which the acquisition date is on or after January 1, 2009. The impact of FSP No. 142-3 did not have a material effect on the Company’s consolidated financial statements since its adoption.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy).  This Statement was effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.”  The adoption of this statement did not have a material effect on the Company’s consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position SFAS No. 107-1 and APB No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP No. 107-1 and APB No. 28-1”).  This FSP amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments” and APB Opinion No. 28, “Interim Financial Reporting”, to require disclosures about fair value of financial instruments not measured on the balance sheet at fair value in interim financial statements as well as in annual financial statements. FSP No. 107-1 and APB No. 28-1 applies to all financial instruments within the scope of SFAS No. 107 and requires all entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments.  FSP No. 107-1 and APB No. 28-1 is effective for interim periods ending after June 15, 2009 and does not require comparative disclosure for earlier periods presented upon initial adoption. The adoption of this FSP did not have a material effect on the Company’s consolidated financial statements.

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

In April 2009, the FASB issued FSP No. 141R-1 “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” (“FSP No. 141R-1”). FSP No. 141R-1 amends the provisions in SFAS 141(R) for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. FSP No. 141R-1 eliminates the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria in SFAS 141(R) and instead carries forward most of the provisions in SFAS 141 for acquired contingencies. The Company has applied the provisions of this statement prospectively to business combinations for which the acquisition date is on or after January 1, 2009. The impact of FSP No. 141R-1 did not have a material effect on the Company’s consolidated financial statements since its adoption.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS No. 165”). SFAS No. 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009 and was adopted by the Company in the second quarter of 2009. The adoption of SFAS No. 165 did not have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS No. 167”). SFAS No. 167 amends FIN 46(R), “Consolidation of Variable Interest Entities (revised December 2003)—an interpretation of ARB No. 51” (“FIN 46(R)”) to require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as one with the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity that could potentially be significant to the variable interest. SFAS No. 167 will be effective as of the beginning of the annual reporting period commencing after November 15, 2009 and will be adopted by the Company in the first quarter of 2010. The Company is assessing the potential impact, if any, of the adoption of SFAS No. 167 on its consolidated financial statements.

14. Equity and Cash Incentive Program

In the first quarter of 2009, the Company issued stock appreciation rights (“SARs”) covering 3,099,326 shares, of which a portion could potentially be converted to performance shares subject to shareholder approval of certain plan changes detailed in Dover’s Proxy Statement. During the second quarter of 2009, the shareholders approved the plan changes and 303,571 SARs were converted into 75,892 performance shares. The modification of the SARs for this conversion did not have material impact on the consolidated results of operations. Additionally, in the second quarter of 2009, 29,577 SARs were granted.

In the first quarter of 2008, 2,234,942 SARs were issued.

For the six months ended June 30, 2009 and 2008, after-tax stock-based compensation expense totaled $7.2 million and $9.1 million, respectively.

The fair value of each SAR grant was estimated on the dates 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 with the following assumptions:

First Quarter 2009 and 2008 SAR Grant:

		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 SARs granted		$	6.58			$	10.97

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Second Quarter 2009 SAR and 2009 Performance Share Grants

						Performance
		SARs				Shares
Risk-free interest rate			3.44	%			1.23	%
Dividend yield			2.82	%			3.23	%
Expected life (years)			6.5				2.9
Volatility			32.20	%			30.24	%
Option grant price		$	35.50			$	29.45
Fair value of SARs/Shares granted		$	9.82			$	32.80

15. Subsequent Events

The Company assessed events occurring subsequent to June 30, 2009 through July 24, 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 July 24, 2009.

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

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

OVERVIEW

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

(1) FINANCIAL CONDITION:

Liquidity and Capital Resources

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

Cash and cash equivalents of $693.6 million at June 30, 2009 increased from the December 31, 2008 balance of $547.4 million. Cash and cash equivalents were invested in highly liquid investment grade money market instruments with a maturity of 90 days or less. Short-term investments consist of investment grade time deposits with original maturity dates between three months and one year. Short-term investments of $142.5 million at June 30, 2009 decreased from $279.5 million at December 31, 2008.

The Company’s total cash, cash and cash equivalents and short-term investment balance of $836.1 million as of June 30, 2009, includes $804.6 million held outside of the United States.

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

		Six Months Ended June 30,
Cash Flows from Continuing Operations (in thousands)		2009				2008
Net Cash Flows Provided By (Used In):
Operating activities		$	307,302			$	385,978
Investing activities			47,964				(172,246	)
Financing activities			(195,882	)			(115,460	)

Cash flows provided by operating activities for the first six months of 2009 decreased $78.7 million from the prior year period, primarily reflecting lower earnings on reduced sales from continuing operations and favorable working capital.

Cash provided by investing activities in the first six months of 2009 increased $220.2 million largely reflecting lower acquisition spending and capital expenditures, as well as net proceeds from short-term investments. Acquisition spending was $34.3 million during the first six months of 2009 compared to $99.8 million in the prior year period. Capital expenditures in the six months of 2009 decreased 31.3% to $58.5 million as compared to $85.1 million in the prior year period. The Company currently anticipates that any additional acquisitions made during 2009 will be funded from available cash and internally generated funds and, if necessary, through the issuance of commercial paper, use of established lines of credit or public debt markets.

Cash used in financing activities for the first six months of 2009 increased $80.4 million due to higher dividend payments of $16.7 million and higher net payments of debt, and a decrease in proceeds from the exercise of stock options in the 2009 period. In the 2008 period, higher purchases of the Company’s common stock and higher debt payments were significantly offset by proceeds from new debt issuances of $594.1 million. The Company has not purchased any of its common stock during the first six months of 2009.

Adjusted Working Capital (a non-GAAP measure calculated as accounts receivable, plus inventory, less accounts

payable) decreased from the prior year end by $160.5 million, or 12.6%, to $1,115.4 million which reflected a decrease in receivables of $141.0 million, a decrease in inventory of $44.0 million and a decrease in accounts payable of $24.5 million generally due to lower sales. Excluding acquisitions and the effects of foreign exchange translation of $23.9 million, Adjusted Working Capital would have decreased by $184.4 million, or 14.5%. “Average Annual Adjusted Working Capital” as a percentage of revenue (a non-GAAP measure calculated as the five-quarter average balance of accounts receivable, plus inventory, less accounts payable divided by the trailing twelve months of revenue) increased to 19.9% at June 30, 2009 from 18.3% at December 31, 2008 and inventory turns were 6.4 at June 30, 2009 compared to 7.1 at December 31, 2008.

In addition to measuring its cash flow generation and usage based upon the operating, investing and financing classifications included in the unaudited Condensed Consolidated Statements of Cash Flows, the Company also measures free cash flow (a non-GAAP measure). Management believes that free cash flow is an important measure of operating performance because it provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase Dover’s common stock. Dover’s free cash flow for the six months ended June 30, 2009 decreased $52.0 million compared to the prior year period. The decrease primarily reflected lower earnings from continuing operations, partially offset by lower capital expenditures.

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

		Six Months Ended June 30,
Free Cash Flow (in thousands)		2009				2008
Cash flow provided by operating activities		$	307,302			$	385,978
Less: Capital expenditures			58,451				85,115
Free cash flow		$	248,851			$	300,863
Free cash flow as a percentage of revenue			9.0	%			7.8	%

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

		At June 30,				At December 31,
Net Debt to Total Capitalization Ratio (in thousands)		2009				2008
Current maturities of long-term debt		$	33,637			$	32,194
Commercial paper and other short-term debt			100,407				192,750
Long-term debt			1,844,741				1,860,729
Total debt			1,978,785				2,085,673
Less: Cash, cash equivalents and short-term investments			836,104				826,869
Net debt			1,142,681				1,258,804
Add: Stockholders’ equity			3,903,908				3,792,866
Total capitalization		$	5,046,589			$	5,051,670
Net debt to total capitalization			22.6	%			24.9	%

The total debt level of $1,978.8 million at June 30, 2009 decreased $106.9 million from December 31, 2008, due to lower commercial paper borrowings. The net debt decrease was funded by cash from operations and reflects lower investment in capital expenditures and acquisitions.

Dover’s long-term debt with a book value of $1,878.4 million, of which $33.6 million matures in less than one year, had a fair value of approximately $1,879.2 million at June 30, 2009. The estimated fair value of the long-term debt is based on quoted market prices for similar issues, and present value techniques used to value similar instruments.

There is presently one outstanding swap agreement for a total notional amount of $50.0 million, or CHF65.1 million, which swaps the U.S. dollar 6-month LIBOR rate and the Swiss Franc 6-month LIBOR rate.  This agreement hedges a portion of the Company’s net investment in non-U.S. operations and the fair value outstanding at June 30, 2009 includes a loss of $10.4 million which was based on quoted market prices for similar instruments (using Level 2 inputs under the SFAS No. 157 hierarchy). The change in fair value of this hedge, which was not significant during the first six months of 2009, is recorded in Other Expense (Income), net and the $10.4 million is recorded in Other Deferrals in the Unaudited Condensed Consolidated Balance Sheet. This hedge is effective.

(2) RESULTS OF OPERATIONS:

CONSOLIDATED RESULTS OF OPERATIONS

Revenue for the second quarter of 2009 decreased 31% to $1,390.3 million from the comparable 2008 period, with decreases at all four segments. Dover’s revenue decrease was primarily attributed to declines in its core businesses of 28.7% and the impact of foreign exchange of 3.2% partially offset by an acquisition of 1.0%. Gross profit decreased 33.3% to $493.3 million from the prior year quarter while the gross profit margin decreased 130 basis points to 35.5%.

Revenue for the first six months of 2009 decreased 29% to $2,769.4 million from the comparable period, with decreases in all segments primarily driven by Industrial Products. Gross profit decreased 31.3% to $975.5 million from the prior year period while gross profit margin decreased 140 basis points to 35.2%. Dover’s revenue decrease was primarily attributed to declines in its core businesses of 26.1% and the impact of foreign exchange of 3.3%.

Selling and administrative expenses of $365.0 million for the second quarter of 2009 decreased by 18.3% or $81.6 million over the comparable 2008 period, primarily due to decreased revenue activity, cost containment efforts and integration programs partially offset by restructuring charges. Selling and administrative expenses as a percentage of revenue increased to 26.3% from 22.2% in the comparable 2008 period, reflecting reduced revenue levels and restructuring charges of $13.4 million.

Selling and administrative expenses of $732.4 million for the first six months of 2009 decreased by 17.7% or $158.0 million over the prior year period, mainly due to decreased revenue, cost containment efforts and integration programs partially offset by restructuring charges. Selling and administrative expenses as a percentage of revenue increased to 26.4% from 23.0% in the comparable period, reflecting reduced revenue levels and restructuring charges of $35.8 million.

Interest expense, net, for the second quarter of 2009 decreased by 9.3% or $2.5 million to $24.8 million compared to the same quarter last year, primarily due to lower average outstanding commercial paper balances during the quarter and a reduction of long-term debt. Other expense (income), net, of $1.5 million and $1.2 million for the three months ended June 30, 2009 and 2008, respectively, primarily related to the effects of foreign exchange fluctuations on assets and liabilities denominated in currencies other than the Company’s functional currency.

Interest expense, net, for the first six months of 2009 decreased 7.0% or $3.6 million to $47.2 million, compared to the same period last year, primarily due to lower average outstanding commercial paper balances during the period and a reduction of long-term debt. Other expense (income), net, for the first six months of 2009 decreased $3.9 million to $(0.2) million over the comparable 2008 period due to the effects of foreign exchange fluctuations and a favorable insurance settlement.

The effective tax rates for continuing operations for the three and six months ended June 30, 2009 were 1.1% and 17.4% compared to the prior year rates of 29.3% and 29.4%, respectively. The effective tax rates for the three and six months ended June 30, 2009 were favorably impacted by $28.4 million of net benefits recognized for tax positions that were effectively settled in the quarter. Higher 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 six months ended June 30, 2009 compared to the prior year periods, absent the settlement of tax positions in the second quarter of 2009.

Earnings from continuing operations for the second quarter decreased 46.0% to $100.9 million or $0.54 diluted EPS (“EPS”) compared to $186.9 million or $0.98 EPS in the prior year second quarter. The decrease was primarily a result of end-market weakness across all of the Company’s segments and restructuring charges offset by cost containment efforts and lower average borrowing costs. Earnings from continuing operations for the first six months of 2009 decreased 51.6% to $162.0 million or $0.87 diluted EPS compared to $334.8 million or $1.74 diluted EPS in the prior year period primarily driven by the same factors for the second quarter of 2009.

Loss from discontinued operations for the second quarter 2009 was $3.8 million, or $0.02 EPS, compared to a second quarter 2008 loss of $51.6 million or $0.27 EPS. The 2009 loss included a $0.09 million loss, net of tax, related to adjustments to the fair value of a business held for sale and other adjustments, as well as a loss from operations of $3.8 million, net of tax. The 2008 loss included losses from the sales of businesses, net of tax, of approximately $51.0 million and loss from operations of $0.6 million.

Loss from discontinued operations for the first six months of 2009 was $11.5 million or $0.06 EPS compared to a loss of $52.4 million or $0.27 EPS in the comparable 2008 period. The 2009 events includes the second quarter events mentioned above as well as first quarter adjustments to the carrying value of certain businesses held for sale. The loss from discontinued operations for the first six months of 2009 and 2008 included an impairment charge of $7.2 million and $51.0, net of tax, respectively.

Severance and Other Restructuring Reserves

From time to time, the Company will initiate various restructuring programs at its operating companies or record severance and other restructuring costs in connection with purchase accounting for acquisitions prior to January 1, 2009. In the second half of 2008, the Company announced plans to increase substantially the amount of restructuring efforts in response to the significant decline in global economic activity. During the first six months of 2009, the Company closed 16 facilities and reduced headcount by approximately 5,150 or 15.8% based on December 31, 2008 headcount. The Company expects to incur approximately $20 million in restructuring costs and reduce headcount by approximately 2,500 during the remainder of 2009. The Company expects the restructuring costs incurred during 2009 to yield savings of approximately $125 million in 2009.

At June 30, 2009 and December 31, 2008, the Company had reserves related to severance and other restructuring activities of $48.9 million and $31.0 million, respectively. During the second quarter of 2009, the Company recorded $18.5 million in additional charges and made $18.4 million in payments related to reserve balances. For the second quarter of 2009, $5.1 million and $13.4 million of restructuring charges were recorded in cost of goods and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

During the first six months of 2009, the Company recorded $53.7 million in charges and made payments of $33.4 million related to these reserves. For the first six months of 2009, $17.9 million and $35.8 million of restructuring charges were recorded in cost of goods sold and services and selling and administrative expenses, respectively, in the Unaudited Condensed Consolidated Statement of Operations.

Current Economic Environment

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

2009 Outlook

Dover currently anticipates that 2009 revenue will decline approximately 25% below 2008 levels. Although bookings improved across the majority of our segments, Dover does not anticipate a meaningful recovery in the latter half of 2009 from these demand levels. Based on these assumptions, Dover has projected that its continuing diluted earnings per share for 2009 will be in the range of $1.75 to $2.00 and expects its earnings to follow a traditional seasonal pattern of being higher in the third quarter and lower in the fourth quarter. If global or domestic economic conditions deteriorate further, Dover’s operating results for 2009 could be materially worse than currently projected.

SEGMENT RESULTS OF OPERATIONS

Earnings at the platform level are defined as earnings before interest, taxes, depreciation and amortization.

Industrial Products

		Three Months Ended June 30,												Six Months Ended June 30,
(in thousands)		2009				2008				% Change				2009				2008				% Change
Revenue
Material Handling		$	153,574			$	306,988				-50	%		$	340,225			$	594,196				-43	%
Mobile Equipment			229,521				342,228				-33	%			477,813				671,951				-29	%
Eliminations			(147	)			(210	)							(299	)			(367	)
		$	382,948			$	649,006				-41	%		$	817,739			$	1,265,780				-35	%
Segment earnings		$	25,421			$	87,925				-71	%		$	59,966			$	166,763				-64	%
Operating margin			6.6	%			13.5	%							7.3	%			13.2	%
Acquisition related depreciation and amortization expense*		$	7,709			$	8,070				-4	%		$	16,096			$	17,285				-7	%
Bookings
Material Handling		$	126,224			$	313,199				-60	%		$	244,567			$	609,477				-60	%
Mobile Equipment			245,937				318,059				-23	%			456,495				678,383				-33	%
Eliminations			(202	)			(385	)							(224	)			(681	)
		$	371,959			$	630,873				-41	%		$	700,838			$	1,287,179				-46	%
Backlog
Material Handling														$	93,247			$	235,284				-60	%
Mobile Equipment															368,315				549,430				-33	%
Eliminations															(143	)			(186	)
														$	461,419			$	784,528				-41	%