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") is 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:
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, 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.
The Company has maintained uninterrupted access to the commercial paper markets at historically competitive rates. If there were changes in the global markets or economy which were to negatively affect its access to commercial paper the Company would rely on available cash and/or the existing $1 billion credit facility which expires in 2012.
Cash and cash equivalents of $575.9 million at September 30, 2008 decreased 5% from the December 31, 2007 balance of $606.1 million. Cash and cash equivalents were invested in liquid investment grade money market instruments with a maturity of 90 days or less.
During the third quarter ended September 30, 2008 the Company purchased $219.4 million of bank term deposits. These investments have maturity dates that range from five to nine months and earn a weighted average interest rate of 5.14%.
The following table is derived from the Condensed Consolidated Statements of Cash Flows: