2. Forward Looking Statements
We want to remind everyone that our comments may
contain certain forward-looking statements that are
inherently subject to uncertainties. We caution everyone
to be guided in their analysis of Dover Corporation by
referring to our Form 10-K for a list of factors that could
cause our results to differ from those anticipated in any
such forward looking statements.
We would also direct your attention to our internet site,
www.dovercorporation.com, where considerably more
information can be found.
2
3. Dover’s Q3 2006 Performance
Continuing Earnings Per Share
2006 Q3 Highlights Q3 2005
$2.17 Revenue $1.7 billion +21%
0.80
0.75
EPS $0.76 +26%
0.70
0.65
Organic Growth 10.4%
$2.17
0.60
Segment Margin 14.5% +20 bps
0.55
$1.77
0.50
Operating 15.5%
0.45
Leverage
0.40
0.35 Free Cash Flow $240.4 million +92%
0.30
• Revenue and orders up at all 6
0.25
0.20
Segments
0.15
0.10 • Free cash flow was 14.6% of
0.05
revenue
0.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
• YTD 2006 EPS is equal to full year
2004 2006
2005
2005 3
4. Results From Continuing Operations
Q3 2006 Q3 2005 % Change
Revenue $1,651.9 $1,364.6 21%
EBT $206.3 $165.8 24%
Earnings $156.3 $123.0 27%
EPS $0.76 $0.60 26%
Bookings $1,672.6 $1,372.5 22%
Backlog $1,373.5 $1,038.8 32%
FAS 123(R) expense was $4.1 million, net of tax or $0.02 EPS in Q3 2006
($ in millions except per share figures)
4
5. Year-to-Date 2006 Results
YTD 2006 YTD 2005 % Change
Revenue $4,813.6 $3,922.8 23%
EBT $619.6 $443.7 40%
Earnings $446.3 $324.1 38%
EPS $2.17 $1.59 37%
Bookings $5,012.4 $4,094.3 22%
FAS 123(R) expense was $13.2 million, net of tax or $0.064 EPS YTD 2006
($ in millions except per share figures)
5
6. Performance Counts
Targets Q3 2006 Q3 2005
Inventory turns* 8 6.3 5.4
Earnings growth 10% 27% 28%
Operating margin 15% 14.5% 14.3%
Working capital as
% of revenue* 20% 19.3% 21.5%
ROI (Operating)* 25% 21.1% 20.5%
* Trailing Twelve Months
Dover exceeded 2 out of 5 target metrics in the third quarter
6
8. Revenue & Earnings Distribution by Segment
Nine months ended September 30, 2006
Revenue Earnings
8
9. Diversified
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $196.4 $185.1 6%
Earnings $23.1 $23.1 -
Operating Margin 11.7% 12.5%
Revenue growth driven by strong energy and heat
exchanger markets. Flat earnings impacted by Industrial
Equipment challenges.
Industrial Equipment: Revenue +2%; Earnings -17%
Strong revenue in the commercial aerospace market, partially offset by a soft
powersports market.
Earnings fell 17% as margin declined on a shift in product mix, rising material
costs and plant productivity initiatives.
Process Equipment: Revenue +15%; Earnings +19%
Strong HVAC, Boiler, and energy markets fueled revenue growth.
Earnings increase on additional revenue despite higher material costs.
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10. Electronics
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $225.5 $112.8 100%
Earnings $31.6 $5.2 507%
Operating Margin 14.0% 4.6%
Knowles and Colder acquisitions plus 29% organic growth
drove impressive revenue and earnings increases.
Components: Revenue +126%; Earnings +356%
Growth from acquisitions and core businesses with improved margins in
frequency control, ceramic and microwave product businesses.
Q3 order levels remained strong in the cell phone (MEMS), military and
telecom markets.
Commercial Equipment: Revenue +33%; Earnings +10X
ATM business up compared to depressed prior year period due to Hurricane
Katrina.
10
11. Industries
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $221.4 $206.3 +7%
Earnings $31.4 $28.2 +11%
Operating Margin 14.2% 13.7%
Revenue increases reflect continued strength in Mobile Equipment
and market share gains across a number of businesses.
Productivity gains and reduced warranty expenditures drove
operating leverage in Mobile Equipment.
Mobile Equipment Group: Revenue +14%; Earnings +29%
Revenue growth from transport markets and market share gains in the Refuse
business.
Earnings improved for the seventh consecutive quarter as revenue gains and
increased productivity offset a meaningful increase in material costs.
Service Equipment Group: Revenue - 4%; Earnings -14%.
Continued weakness in the automotive repair and car wash markets accounted
for the volume shortfall.
Earnings were impacted by the volume shortfalls, offset in part by actions taken
to lower SG & A costs.
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12. Resources
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $463.9 $390.2 19%
Earnings $76.6 $65.1 18%
Operating Margin 16.5% 16.7%
All markets were strong with the exception of automotive and light
construction. Oil & Gas along with Paladin accounted for most of the
revenue growth.
Oil & Gas Equipment Group: Revenue +37%; Earnings +58%
Activity remains robust although global energy prices have softened.
Selective capacity additions continue at 3 companies in this market sector.
Fluid Solutions: Revenue +10%; Earnings +4%
Revenue rise driven by strength in new markets and new products.
Material price increases have impacted earnings and margins.
Material Handling: Revenue +13%; Earnings flat
Revenue growth reflects softness in automotive and light construction offset by the
addition of Paladin and strength in utility, mobile crane, and petroleum markets.
Margins impacted by automotive market weakness.
12
13. Systems
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $217.5 $197.1 10%
Earnings $24.9 $29.2 -15%
Operating Margin 11.5% 14.8%
Revenue was strong at both the Food Equipment and Packaging
Equipment Groups. Margin decline at Food Equipment due to rising
commodity costs, customer delays and capacity challenges.
Food Equipment: Revenue + 8%; Earnings -24%
Revenue increase driven by both supermarket and food service equipment.
Material cost increases were significant factor in reduced margins along with
customer delays and capacity challenges.
Packaging Equipment: Revenue +20%; Earnings +34%
Strong leverage on increased sales in can necking and trimming equipment.
13
14. Technologies
($ in millions) Q3 2006 Q3 2005 % Change
Revenue $330.8 $275.6 20%
Earnings $52.3 $44.6 17%
Operating Margin 15.8% 16.2%
Revenue and earnings growth driven by acquisitions,
semiconductor market and overall product ID growth.
Automation & Measurement: Revenue +18%; Earnings
+19%
Consumables grew as a percentage of revenue with improved margins.
Sales, earnings and bookings have decreased sequentially, reflecting
softer overall semiconductor and circuit board markets.
Product Identification: Revenue + 22%; Earnings +30%
Acquisitions from the last two years are performing well and provided over
half the revenue growth.
Core businesses continue to grow, particularly in North American, Latin
American and Asian markets.
14
15. Third Quarter 2006 Overview
Revenue Growth
Organic Growth 10.4%
Acquisitions 9.4%
Currency Translation 1.3%
Total 21.1%
Free Cash Flow (defined as Cash from operations less Capex)
Strong quarter and year-to-date at 14.6% and 9.5% of revenue, respectively.
Full year expectations: greater than 10% of revenue.
YTD Capital Expenditures: $137.6 million - up 56% over prior year.
Acquisitions
Acquired Paladin Brands (DRI) in August.
Markem acquisition (DTI) to close during the fourth quarter.
Net Debt to Capital Ratio
Currently 24.1%, down from YE 2005 of 28.9%.
Effective Tax Rate (ETR)
Third quarter : 24.2%, down from 25.8% in the prior year.
Full year rate expected to remain in the range of 28 - 30%.
Discrete $7.8 million benefit in Q3 2006 and $12.2 million net benefit in Q3 2005.
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