DOVER CORP - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NO. 1-4018

DOVER CORPORATION
(Exact name of Registrant as specified in its charter)

DELAWARE 53-0257888
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

280 PARK AVENUE 10017
NEW YORK, NY (Zip Code)
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(212) 922-1640
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS

NONE

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 (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past ninety days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities and Exchange Act of
1934). Yes [X] No [ ]
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The aggregate market value of the voting and non-voting common stock held
by non-affiliates of the Registrant as of the close of business June 30, 2004
was $8,559,923,012.7. Registrant's closing price as reported on the New York
Stock Exchange-Composite Transactions for June 30, 2004 was $42.10 per share.

The number of outstanding shares of the Registrant's common stock as of
February 28, 2005 was 203,697,833.

DOCUMENTS INCORPORATED BY REFERENCE

PART III -- CERTAIN PORTIONS OF THE PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON APRIL 19, 2005 (THE "2005 PROXY
STATEMENT").

SPECIAL NOTES REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, and the documents that are incorporated by
reference, particularly sections of the Annual Report to Stockholders under the
headings "Letter to Shareholders," and "Management's Discussion and Analysis,"
contain forward-looking statements within the meaning of the Securities Exchange
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. Such statements relate to,
among other things, the U.S. and global economies, earnings, cash flow,
operating improvements, and industries in which the Company operates, and may be
indicated by words or phrases such as "anticipates," "supports," "plans,"
"projects," "expects," "believes", "should," "would," "could," "hope,"
"forecast," "management is of the opinion," use of the future tense and similar
words or phrases. Such statements may also be made by management orally.
Forward-looking statements are subject to inherent uncertainties and risks,
including among others: continued events in the Middle East and possible future
terrorist threats and their effect on the worldwide economy; economic
conditions; increasing price and product/service competition by foreign and
domestic competitors including new entrants; technological developments and
change which can impact the Company's Electronics and Technologies segments
significantly; the ability to continue to introduce competitive new products and
services on a timely, cost-effective basis; changes in the cost or availability
of raw materials or energy, particularly steel and other raw materials; changes
in customer demand; the extent to which the Company is successful in expanding
into new geographic markets, particularly outside of North America; the extent
to which the Company is successful in integrating acquired businesses; the
relative mix of products and services which impacts margins and operating
efficiencies; the achievement of lower costs and expenses; domestic and foreign
governmental and public policy changes including environmental regulations and
tax policies (including domestic and foreign export subsidy programs, R&E
credits and other similar programs, some of which were changed in 2004);
unforeseen developments in contingencies such as litigation; protection and
validity of patent and other intellectual property rights; the success of the
Company's acquisition program; and the cyclical nature of some of the Company's
businesses. In addition, such statements could be affected by general industry
and market conditions and growth rates, and general domestic and international
economic conditions including interest rate and currency exchange rate
fluctuations. In light of these risks and uncertainties, actual events and
results may vary significantly from those included in or contemplated or implied
by such statements. Readers are cautioned not to place undue reliance on such
forward-looking statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.

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PART I

ITEM 1. BUSINESS

OVERVIEW

Dover Corporation ("Dover" or the "Company"), originally incorporated in
1947 in the State of Delaware, became a publicly traded company in 1955. It is a
diversified industrial manufacturing corporation encompassing 49 operating
companies that primarily manufacture a broad range of specialized industrial
products and sophisticated manufacturing equipment, and seek to expand their
range of related services. Additional information is contained in Items 7 and 8.

The Company's businesses have been divided into four business segments.
Diversified builds packaging and printing machinery, heat transfer equipment,
food refrigeration and display cases, specialized bearings, construction and
agricultural cabs, as well as sophisticated products for use in the defense,
aerospace and automotive industries. Industries makes products for use in the
waste handling, bulk transport, automotive service, commercial food service and
packaging, welding, cash dispenser and construction industries. Resources
manufactures products primarily for the automotive, fluid handling, petroleum,
original equipment manufacturers (OEM), engineered components and chemical
equipment industries. Technologies builds sophisticated automated assembly and
testing equipment and specialized electronic components for the electronics
industry, and industrial printers for coding and marking.

Effective January 1, 2005, the Company organized its 49 operating companies
into 13 groups within six segments, adding the Electronics and Systems
subsidiaries. Beginning with the first quarter 2005 earnings announcement in
April 2005, the Company will report its results in these six business segments
and discuss its operating companies in 13 groups. Management believes this new
operating structure will enhance the Company's market focus, acquisition
capacity and executive leadership.

BUSINESS STRATEGY

The Company operates with certain fundamental objectives. First, it seeks
to acquire and own businesses with proprietary, engineered industrial products
which make them leaders in the niche markets which they serve. Second, these
businesses should be customer focused, innovative and well managed to achieve
above average profit margins by supplying customers with value-added products
and related services. Third, the Company expects that these types of businesses
will generate strong cash flow which can not only sustain such operations, but
also provide excess cash flow which the Company can then reinvest in similar
business opportunities.

The Company expects to manage its cash flow so that the mix of its external
debt levels and capital structure are optimized to support continued ready
access to the capital markets.

MANAGEMENT PHILOSOPHY

The Company practices a highly decentralized management style. The
presidents of the operating companies are given a great deal of autonomy and
have a high level of independent responsibility for their businesses and their
performance. This is in keeping with the Company's operating philosophy that
independent operations are better able to serve customers by focusing closely on
their products and reacting quickly to customer needs. The Company's executive
management role is to provide management oversight, allocate and manage capital,
assist in major acquisitions, evaluate, motivate and, as necessary, replace
operating company management and provide selected other services.

ACQUISITIONS AND DIVESTITURES

The Company has a long-standing acquisition program. The Company seeks to
acquire and develop "platform" businesses, which are marked by growth,
innovation and higher than average profit margins. Each of its businesses should
be a leader in its market as measured by market share, customer service,
innovation, profitability and return on assets. The Company traditionally
focused on acquiring new businesses that could
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operate independently from other Dover companies ("stand-alones"). Since 1993,
an increased emphasis has been placed on acquiring businesses that can be added
on to existing operations ("add-ons"). The target companies are generally
manufacturers of high value-added, engineered products sold to a broad customer
base of industrial or commercial users. One of the most critical factors in the
decision to acquire a business is the Company's judgment of the skill, energy,
ethics and compatibility of the top executives at the acquisition target. Dover
generally expects that acquired companies will continue to be operated by the
management team in place at acquisition, with a high degree of autonomy in
keeping with the Company's decentralized structure. From January 1, 2000 through
December 31, 2004, the Company made 58 acquisitions at a total acquisition cost
of $1,809.0 million. These acquisitions have had a substantial impact on the
Company's sales and earnings since 2000. During the three years 2001-2003, the
overall number of Company acquisitions and dollars invested was lower than in
previous years. This largely reflected the general economic conditions and the
lack of attractive acquisition candidates. In 2004, the Company acquired eight
add-on businesses for an aggregate of $514.3 million, its highest acquisition
spending level since 1999. For more details regarding acquisitions completed
over the past two years, see Note 2 to the Consolidated Financial Statements in
Item 8. The Company's future growth depends in large part on finding and
acquiring successful businesses, as a substantial number of the Company's
current businesses operate in relatively mature markets where sustained internal
growth objectives are difficult to achieve.

While the Company generally expects to buy and hold businesses, it does
periodically reassess each business to verify that it continues to represent a
good long-term investment. There may also be situations where a Company business
represents a very attractive acquisition for another company based on specific
market conditions. Based on these criteria, the Company has divested businesses.
Over the past three years, the Company has been more proactive in evaluating its
operating companies against internal growth and profitability criteria. During
that time, the Company has discontinued 13 and sold 15 operations for an
aggregate consideration of $99.9 million. For more details, see the
"Discontinued Operations" discussion below and Note 7 to the Consolidated
Financial Statements in Item 8.

BUSINESS SEGMENTS

For more financial information about our business segments, see Note 14 to
the Consolidated Financial Statements in Item 8.

DIVERSIFIED

Diversified's twelve stand-alone operating companies manufacture equipment
and components for industrial, commercial and defense applications. A
description of each stand-alone operating company is provided below.

Hill Phoenix's U.S. manufacturing facilities provide refrigeration systems,
display cases, walk-in coolers and freezers, electrical distribution products,
and engineering services for sale to the supermarket industry, as well as to
commercial/industrial refrigeration, big box retail and convenience store
customers. Hill Phoenix sells equipment primarily in North America directly to
the end user with a small percentage of sales through a dealer network and
independent distributors.

The Sargent companies design, manufacture and maintain fluid control
assemblies and structural components for the global aerospace and U.S. defense
industries, supporting the full product life cycle, from the original design and
build through the aftermarket. They specialize in complex fluid control
assemblies with typical end-use applications such as U.S. submarines, aircraft
control systems and engine thrust reverser systems, land and amphibious utility
vehicle actuation systems, helicopter rotary systems, engine pneumatic ducting
and cooling systems, aircraft environmental control systems, and general
airframe and engine structures. With manufacturing and repair facilities
throughout North America, the businesses share common customers throughout the
commercial aerospace and defense industries and sell direct to their end users:
OEMs, airlines and government agencies.

Performance Motorsports sells primarily internal engine components and
other engine accessories into motorsport and powersport markets that include
high performance racing, motorcycles, all-terrain vehicles,
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snowmobiles and watercraft. Performance Motorsports products include forged and
cast pistons, connecting rods, crankshafts and cylinder liners along with their
complementary components, including piston rings, bearings, gaskets, and a
variety of other internal valve train and engine components, as well as
suspension, braking, clutching, and chassis components. Products are
manufactured in the U.S. and Europe for sale through distributors.

SWEP is a global leader in the design and manufacture of copper-brazed
compact heat exchangers. It also manufactures heat exchangers and design
software for district heating and district cooling substations. SWEP products
are manufactured in Sweden, Switzerland, Malaysia and the U.S. and are sold via
a direct sales force, through wholly-owned sales companies in the U.S., Europe
and Asia, and by sales agents throughout the world for various applications in a
wide variety of industries.

Tranter PHE manufactures gasketed plate and frame heat exchangers, welded
plate heat exchangers and all-welded heat exchangers for a wide range of
applications in a variety of industries. PHE's products are manufactured in the
U.S., Sweden, India and the U.K. Sales are split approximately 60/40 between
Eurasia and the Americas. Products are sold through a network of manufacturers'
representatives in North America, through wholly-owned sales companies in Europe
and Asia, and by sales agents and manufacturers' representatives in the rest of
the world.

Belvac is a world leader in the beverage can-making industry in its global
supplying of high-speed trimming, necking, bottom reforming, re-profiling, and
flanging equipment. For that same industry, Belvac designs and manufactures
shaping, bottom rim coating, and inspection equipment as enhancements to its
core product line. In addition, Belvac designs and produces high-speed trimming
and burnishing equipment for the plastic container industry, with an emphasis on
containers for dry foods, condiments and specialty beverages. Belvac's products
are designed and manufactured in the U.S., and sold through a direct sales force
with offices in both the U.S. and Europe, supplemented by key agent-distributor
relationships in South America and Asia.

Crenlo fabricates operator cabs and rollover structures for sale to OEM
manufacturers in the construction, agriculture, and commercial equipment
markets, such as Caterpillar, John Deere & Company, and Case New Holland. In
addition, Crenlo produces standard and custom high volume sheet metal enclosures
for the electronics, telecommunications and electrical markets. Crenlo operates
manufacturing facilities in the U.S., which is its primary market.

Mark Andy manufactures printing/converting equipment and accessories
primarily for the specialty packaging-printing segment at locations in the U.S.
and Europe. Its major applications are product decoration, identification, and
information applied to the exterior of a package. The company specializes in the
fabrication of narrow web printing presses used for producing pressure sensitive
labels, small folding cartons and flexible packaging for the food, cosmetic,
pharmaceutical and logistics markets. Products are sold primarily in the
Americas and Europe through distributors.

Hydratight Sweeney designs and manufactures products for critical bolting
applications and joint integrity solutions, mainly in the oil and gas industry.
Secondary markets include power generation, aviation and general industrial.
Hydratight Sweeney's product lines reflect different approaches to bolting and
joint integrity including torque products, tension products and a service
division which provides custom solutions ranging from straightforward rental of
torque or tension equipment through full management of a bolting application
using company technicians and engineers. The company has manufacturing plants
and rental/sales offices in the U.S. and the U.K., and additional sales offices
in Germany, The Netherlands, Brazil, and Saudi Arabia.

Waukesha Bearings Corporation manufactures bearings for certain rotating
machinery applications including turbo machinery, motors and generators, for use
in the industrial, utility, naval and commercial marine industries. Waukesha's
product lines include polymer, ceramic and magnetic designs for specific
customer applications, as well as hydrodynamic bearing design applications. Its
Central Research Laboratories business makes remote control manipulators for
material handling applications in hazardous or sterile environments. The company
operates manufacturing facilities in the U.S. and the U.K. and sales are made
primarily in Europe and North America both directly and through agents in
several different countries.

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Graphics Microsystems manufactures color measurement and control systems
for printing presses. Primary markets served are catalog, book, publication and
newspaper printing. Products are designed to add economic value to printing
processes by automating manual processes, providing quality control and reducing
waste. Products are sold primarily in the Americas and Europe directly to
printing firms as well as printing press manufacturers.

SWF Companies manufacture packaging automation and robotic machinery
utilized in forming, loading and sealing folding carton stock and corrugated
board packaging. SWF's products are sold primarily in the U.S. through direct
representation as well as indirect channels. Approximately 30% of the company's
machines are installed and operated outside of North America. SWF's new modular
platform products are expected to provide a more competitive offering.

Effective January 1, 2005, Hill Phoenix, Belvac and SWF became part of the
new Dover Systems subsidiary segment. Hill Phoenix and DI Foodservice (from
Dover Industries) are the "Food Equipment" companies group, and SWF joins Belvac
and Tipper Tie (also from Dover Industries) to become the "Packaging Equipment"
companies group. At the same time, Mark Andy joined Imaje to form the Printing
and Labeling group within Dover Technologies.

INDUSTRIES

Industries is comprised of twelve stand-alone operating companies that
manufacture a diverse mix of equipment and components for use in the waste
handling, bulk transport, automotive service, commercial food service,
packaging, and construction equipment industries. A description of each
stand-alone operating company is provided below.

Heil Environmental manufactures a wide variety of refuse collection bodies
(garbage trucks) including manual and automated side loaders, front loaders,
rear loaders and a variety of recycling units. Bayne, a separately held company
of Heil Environmental, manufactures container lifts for the refuse collection
industry as well as for commercial applications. Both organizations sell
products to municipal customers, national accounts, and independent waste
haulers through a network of distributors, and directly in certain geographic
areas. Also, under the Heil name, another separately held company of Heil
Environmental manufactures a line of dump truck bodies/hoists for the hauling
industry. Between all of these Heil Environmental organizations, products are
manufactured in the U.S. for sales primarily in North America, and in the U.K.
for the European market.

Rotary Lift manufactures a wide range of vehicle service and storage lifts,
which are sold through equipment distributors, and directly to a wide variety of
markets including independent service and repair shops, national chains and
franchised service facilities, new car and truck dealers, national and local
governments, and government maintenance and repair locations. Rotary has
manufacturing operations located in the U.S. and Germany and sells primarily in
the Americas and Europe.

Heil Trailer International produces a complete line of tank trailers
including aluminum, stainless steel and steel trailers that carry petroleum,
chemical, edible, dry bulk and waste products. Heil also manufactures specialty
trailers focused on the heavy haul, oil field, and recovery niches. Trailers are
marketed both directly and indirectly through distributors to customers in the
construction, trucking, railroad, oil field, towing and recovery, and heavy haul
industries, as well as to various government agencies, both domestically and
internationally. Heil Trailer International has manufacturing facilities in the
United States, Argentina and Thailand, as well as service facilities in the
United States and the United Kingdom.

Tipper Tie develops and manufactures in the U.S. and Europe a wide variety
of packaging machinery which employs a clip as the means of flexible package
closure. These machines and clips are sold worldwide primarily for use with
meat, poultry and other food products. Tipper Tie also produces a line of woven
netting products used in many industries, including the meat and poultry,
horticulture, Christmas tree, and environmental markets. International sales,
primarily in Europe, currently generate over 60% of total sales.

Marathon Equipment manufactures on-site waste management and recycling
systems, including a variety of stationary compactors, roll-off hoists and
vertical, horizontal and two ram balers. Equipment is manufac-
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tured and sold primarily in the U.S. to distribution centers, malls, stadiums,
arenas, hotels/motels, warehouses, office complexes, apartment buildings, retail
stores, businesses, and recycling centers.

Triton manufactures a full line of ATM hardware, software and services for
retail and financial institutions. As the largest provider of retail ATMs in
North America, there are more than 120,000 units installed in over 17 countries.
Triton continues to pioneer innovative solutions to increase ATM functionality
and lower ATM service costs. Triton's line of retail ATMs are found in numerous
major retail chains and in many convenience stores, airports, hotels, office
buildings, restaurants, shopping centers, supermarkets and casinos. In the
financial institution market, Triton's line of PC-based ATMs and software
packages run multi-vendor platforms, features specific to this market.

PDQ Manufacturing, Inc. manufactures touch free vehicle wash systems, which
are sold primarily in the U.S. and Canada to major oil companies as well as to
investors. Sales are made through an industry distribution network that installs
the equipment and provides after-sale service and support.

DI Foodservice Companies, through its Groen, Randell, and Avtec brands,
manufactures commercial foodservice cooking equipment, cook-chill production
systems, refrigeration products, custom food storage and preparation products,
kitchen ventilation, air handling systems and conveyer systems. DI Foodservice
serves the institutional and commercial foodservice markets worldwide through
its network of distributors, manufacturer's representatives, and direct sales
force. The primary market for DI Foodservice products is North America.

Kurz-Kasch manufactures electromagnetic products and specialty plastic
components, primarily electromagnetic stators that regulate electronic fuel
injectors, electronic fuel pumps for the heavy truck and automotive industries,
phenolic brake pistons and electronic valve assemblies. Kurz-Kasch also
manufactures specialty plastic components used in aerospace, electrical,
telecommunications and other industries. All products are manufactured in the
U.S. and sold directly to OEMs.

Chief Automotive Systems manufactures vehicle collision measuring and
repair systems, including pulling equipment and computerized measuring and
inspection products. Chief markets its equipment worldwide in over 40 countries
throughout Europe, Asia and the Americas, utilizing direct sales, manufacturer
representatives, and distributors along with service and training organizations.

Koolant Koolers manufactures standard and custom industrial liquid
chillers, coolers and heat exchanger packages that extend the useful life and
productivity of equipment. Chillers are used in a wide variety of applications
that include the cooling of lasers, medical diagnostic equipment, spindles,
filtration & heat treating equipment, water jet intensifiers, spot welding
machines, electronic equipment, semiconductor processing equipment, machine
tools and plastic injection molding equipment. All products are manufactured in
the U.S. for sale directly and through indirect sales channels in North America.

Somero Enterprises manufactures highly specialized laser guided concrete
screeding equipment used in the commercial construction industry. Products are
built in the U.S. and sold globally through a direct sales force, sales
representatives and dealers.

Effective January 1, 2005, Tipper Tie and DI Foodservice became part of the
Packaging and Food Equipment companies groups, respectively, at Dover Systems, a
new segment subsidiary. At the same time, Kurz-Kasch and Triton, joined the new
Dover Electronics segment subsidiary.

RESOURCES

Resources' twelve stand-alone operating companies manufacture components
and equipment for the oil and gas production industry, petroleum retailing,
refining and transportation industries, general process industries, automotive
industries, recreational and off-road vehicle market, and other select
commercial markets. A description of each stand-alone operating company is
provided below.

Warn Industries is the market leader for high performance recreational
winches, winch mounts, four-wheel drive (4WD) hubs, and other accessories for
4WD vehicles, including both light trucks and all-terrain

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vehicles (ATV). In addition, Warn provides a range of patented, technologically
advanced 4WD and all-wheel drive (AWD) powertrain systems to leading automotive
OEMs around the world, primarily North America.

The Energy Products Group (EPG) consists of six North American operating
units, US Synthetic, Norris, Alberta Oil Tool (AOT), Quartzdyne,
Ferguson-Beauregard and Norriseal, which primarily serve the upstream oil and
gas exploration and production industry. US Synthetic, which was acquired August
31, 2004, is a leading supplier of polycrystalline diamond cutters (PDCs) used
in drill bits for oil and gas well drilling. Norris and AOT produce forged steel
sucker rods and accessories, integral parts of artificial lift systems used
primarily in on-shore oil and gas production. Quartzdyne manufactures precision
pressure transducers using proprietary quartz-resonator sensor technology to
provide continuous monitoring of pressure, temperature, and flow, in "downhole"
oil and gas exploration and production applications. Ferguson-Beauregard
provides products that improve production from natural gas wells and electronic
well controllers for remotely monitoring, controlling, and optimizing production
from natural gas fields. Norriseal provides control valves, butterfly valves,
and control instrumentation primarily for oil and gas production applications
and, to a lesser extent, the general industrial, refining, chemical processing,
and marine markets. Sales are made directly to customers and through various
distribution channels. The Energy Products Group's market is global, but sales
are predominantly in North America, with the bulk of international sales
occurring in South America.

OPW Fueling Components is a global leader in high quality vehicle fueling
solutions. OPW offers an extensive line of fuel dispensing products including
conventional, vapor recovery, and CleanEnergy (LPG, CNG, and Hydrogen) nozzles,
swivels and breakaways, as well as Vaporsaver 1 -- a tank pressure management
system. OPW provides a complete line of environmental products for both
aboveground and underground storage tanks, suction system equipment, flexible
piping, and secondary containment systems. The ECO Air products line offers an
array of tire inflation and vacuum systems, while its OPW Fuel Management
Systems group specializes in unattended fuel management, integrated tank
monitoring, and Point-of-Sale systems. OPW Fueling Component's products are
marketed globally through a network of distributors and company sales offices
located throughout the world.

De-Sta-Co manufactures and sells a variety of modular automation and
workholding components, including manual toggle clamps, pneumatic and hydraulic
clamps, automation power clamps, automation shuttles and lifters, grippers,
slides, end-effectors, and other "end of robot arm" devices. De-Sta-Co serves
the automotive, electronics, and general industrial markets from plant
facilities in the U.S., Germany, Thailand, France, and Brazil, and its products
are marketed globally on a direct basis and through a network of distributors.

Blackmer manufactures pumps and compressors for the transfer of liquid and
gas products in a wide variety of markets, including the refined fuels, LPG,
pulp & paper, wastewater, food/sanitary, military/marine, transportation, and
chemical process industries. Pump technologies include positive displacement,
sliding vane and eccentric disc pumps in addition to centrifugal process pumps.
Compressor technologies include reciprocating, rotary vane, and screw
compressors. Blackmer sells to OEMs directly, and to other markets through a
global network of distributors, primarily in the Americas, Europe and Asia.

OPW Fluid Transfer Group supplies engineered products, including valves,
electronic controls, loading arms, swivels, and couplings, for the transfer,
monitoring, measuring, and protection of hazardous, liquid and dry bulk
commodities in the chemical, petroleum, and transportation industries. These
products are manufactured in the U.S., India, Brazil and the Netherlands. OPW
Fluid Transfer Group's products are sold globally, both directly and through
distributors.

Wilden produces a wide range of air-operated double-diaphragm pumps made of
a variety of metals and engineered plastics. Wilden pumps are used in a wide
variety of fluid transfer applications in general industrial, process industry,
and specialized applications. Sales are predominantly through distributors, with
over half of Wilden's sales derived from international markets. Wilden acquired
Almatec GmbH in December of 2004. Almatec is located near Dusseldorf, Germany,
and it designs, manufactures and markets air-operated double-diaphragm pumps
used primarily in the biopharmaceutical, chemical and electronics process
industries, with its primary markets in Europe.

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C. Lee Cook is comprised of three units: C. Lee Cook, Compressor Components
(CCI), and Cook Manley. C. Lee Cook is a leading manufacturer of piston rings,
seal rings, and packings for reciprocating compressors used in the natural gas
production and distribution markets, and petrochemical and petroleum refining
industries. These products are sold as original equipment parts to compressor
manufacturers, and as aftermarket replacement parts. CCI manufactures
replacement valves, rods, rings, high performance plastic bushings, and other
compressor components, and provides compressor repair services through its
service centers, primarily for the North American gas production and
distribution markets. Cook Manley designs and manufactures engineered valves for
engines and compressors and injection-molded specialty plastic components for
gas compressor markets worldwide. C. Lee Cook's products are sold both directly
and through various sales channels, largely in North America.

Texas Hydraulics designs and manufactures highly engineered welded
hydraulic cylinders for work platform, aerial utility truck, material handling,
construction, and mining industry OEMs throughout North America. Through its
Hydromotion subsidiary located in Spring City, Pennsylvania, Texas Hydraulics
also provides custom hydraulic swivels and electric slip rings for its markets.
Cylinders are manufactured in Texas and Tennessee for sale directly to
customers.

The Tulsa Winch Group includes Tulsa Winch, DP Manufacturing, Pullmaster
Winch, and the Greer Company. The primary markets served by the group include
the construction, marine, lumber, railroad, refuse, petroleum, military towing
and recovery and utility markets, which are served through original equipment
manufacturers and an extensive dealer network. Products manufactured by the
group include worm gear and planetary winches, worm gear and planetary hoists,
traction (constant pull) winches, rotation drives, speed reducers, capstan
drives, high capacity bumper/winch packages, electronic monitoring systems and
other related products.

RPA Process Technologies designs and manufactures engineered liquid
filtration equipment and systems for the petroleum refining, chemical, food &
beverage, pulp and paper, hydrometallurgy, and other process industries on a
global basis. The filtration product range includes mechanically self-cleaning
filters, backwashing filters, bags and cartridge filters, belt filters, drum
filters and vacuum table filters, and they are marketed and sold under the
leading brand names of Ronningen-Petter, Filtres Philippe, Filtres Vernay and
UCEGO.

Hydro Systems manufactures chemical proportioning and dispensing systems
used to dilute and dispense concentrated cleaning chemicals to the food service,
health care, supermarket, institutional, school, building service contractor and
industrial markets. Hydro Systems' products are generally sold to manufacturers
of concentrated cleaning chemicals who market them with their branded chemicals
to offer a complete chemical management system to their end user customers.

Effective January 1, 2005, Hydro Systems became a part of the new Dover
Electronics subsidiary segment.

TECHNOLOGIES

Technologies is comprised of thirteen stand-alone operating companies that
manufacture products in three broad groupings: Circuit Board Assembly and Test
equipment (CBAT), Specialized Electronic Components (SEC), and Marking and
Imaging systems. In 2004 Technologies completed three larger and three small
add-on acquisitions. A description of each stand-alone operating company is
provided below.

Circuit Board Assembly and Test (CBAT)

Universal Instruments manufactures high-speed precision machinery used to
assemble components onto printed circuit boards. Its products include thru-hole
component assembly machines, surface mount placement equipment, and odd
component assembly cells. It also provides complete assembly lines by
integrating equipment and software required for turnkey assembly solutions.
Universal manufactures in the U.S. and in China, with sales and service
operations in more than 30 countries.

Everett Charles Technologies (ECT) makes machines, test fixtures and
related products used in testing "bare" and "loaded" electronic circuit boards
and semiconductors. Its products generally connect the device
8

under test to the in-circuit or functional test set. ECT also manufactures
spring loaded probes which are used in many of its products and also sold
separately. Machines are built in the U.S., Europe and China and test fixtures
are made at locations worldwide. Products are marketed directly on a worldwide
basis.

DEK produces high-speed precision screen printers and related tools and
consumables to apply solder paste and epoxy glue to substrates at the start of
the printed circuit board assembly process. Advanced applications include
printing solder paste bumps onto semiconductor wafers used in the "flip chip"
process and onto "ball grid" array packages. DEK manufactures in the U.K. and
China and has sales/service offices throughout Europe, North America, and Asia
Pacific, with a network of distributors and agents providing further support in
these territories.

OK International manufactures specialized and manual industrial tools for
the professional electronics workbench, including precision manual soldering and
desoldering tools, ball grid array rework and inspection stations, fluid
dispensing systems and other hand tools. Products are made at various U.S. and
Chinese locations for sale to customers in the electronics, aerospace and
telecom industries through sales organizations around the world that manage
distributors and independent representatives.

Vitronics Soltec manufactures automated soldering systems for high volume
electronic circuit board manufacturing. With factories in the U.S., the
Netherlands, and China, it makes wave soldering machines primarily applied to
thru-hole assembly, reflow soldering systems typically used for surface mount
circuits and selective soldering to automatically solder specific components or
provide solder connections in selective areas of printed circuit boards.
Vitronics Soltec has sales and service offices in Europe, North America, and
Asia, but also sells through distributors and agents.

Alphasem manufactures die attach equipment to attach semiconductor die to
their protective packages, providing interconnections to the next level of
packaging. These "packages" are vital components in all kinds of simple and
sophisticated electronic systems used in computers, automotive applications,
space, communication devices, medical systems, and aircraft. SSE, a recent
acquisition, manufactures and distributes production equipment for the
semiconductor, telecom/optoelectronics and flat panel display markets. Alphasem
is based in Switzerland and has sales and service offices in Europe, Asia, and
North America.

Hover-Davis manufactures component feeders, direct die feeders, and label
feeders that are used on high-speed component placement machines as part of
automated circuit board assembly lines. Headquartered in Rochester, New York,
Hover-Davis sells certain products directly to assembly equipment manufacturers
including Universal Instruments, while other products, fitting different
assembly equipment, are being sold to end users. Sales and service is supported
by a network of independent manufacturing representatives and distributors.

Effective January 1, 2005, the CBAT companies were renamed the Circuit
Assembly and Test (CAT) companies to better reflect the broader market served.

Specialty Electronic Components (SEC)

Vectron International designs and manufactures frequency control/select
components and modules, employing quartz technologies. Products are manufactured
at multiple locations in the U.S. and Germany and are sold to communication
equipment, defense and aerospace, medical and industrial customers. In September
2004, Vectron completed the acquisition of the Corning Frequency Control
business, which is expected to strengthen Vectron's position in the precision
frequency generation and control industry by expanding its product offerings and
capabilities to provide custom-engineered solutions to customers.

Dow-Key Microwave is a specialty manufacturer of microwave
electro-mechanical switches for sale to the medical, wireless, defense and
aerospace industries. Design and manufacturing operations are in the U.S. and
sales are made worldwide through representatives. K&L Microwave designs and
manufactures radio frequency and microwave filters and integrated assemblies.
K&L has manufacturing operations in the U.S. and the Dominican Republic and
sells its products to communication equipment and defense and aerospace
customers.

9

Novacap is a specialty manufacturer of multi-layer ceramic capacitors and
planar arrays for custom high voltage, high reliability applications. It
manufactures products in the U.S. and the U.K. for sale to communications,
medical, defense and aerospace and automotive manufacturers.

Dielectric Laboratories is a manufacturer of single and multi-layer high
frequency capacitors for use in the communications, defense and automotive
industries. Design and manufacturing operations are in the U.S. and sales are
made worldwide through representatives.

Effective January 1, 2005, the SEC companies became part of the new Dover
Electronics segment.

Marking and Imaging

Imaje is a major worldwide supplier of industrial marking and coding
systems. Its primary product is a Continuous Ink Jet (CIJ) printer, which is
used for marking variable information (such as date codes or serial numbers) on
consumer products. Markpoint, acquired in 2001, added two new technologies to
Imaje's product lineup: Drop on Demand (DOD) printers and thermal printers used
for marking on secondary packaging such as cartons. Datamax International,
acquired in December of 2004, manufactures bar code printers and related
products. This acquisition will strengthen Dover's position in the Automatic
Identification and Data Capture (AIDC) market. Imaje has also added laser and
thermal transfer printers to its broad array of marking and coding solutions.
Imaje's markets are very broad and include food, beverage, cosmetics,
pharmaceutical, electronics, automotive and other applications where variable
marking is required. Products are made in Europe, the U.S. and China, where
Imaje engages in both printer assembly and the formulation of ink. Imaje's
direct sales/service network has subsidiaries in 30 countries and sells in over
90 countries. Datamax sells primarily through distributors.

DISCONTINUED OPERATIONS

In August of 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets," which was effective for fiscal
years beginning after December 15, 2001. SFAS No. 144 establishes accounting and
reporting standards for the impairment and disposal of long-lived assets and
discontinued operations. The Company elected to early adopt SFAS No. 144 in
2001. The application of these standards results in the classification, and
separate financial presentation, of certain entities as discontinued operations,
which are not included in continuing operations. The earnings (loss) from
discontinued operations include charges to reduce these businesses to estimated
fair value less costs to sell. Fair value is determined by using quoted market
prices, when available, or other accepted valuation techniques. All interim and
full year reporting periods have been restated to reflect the discontinued
operations discussed below. Please refer to Note 7 to the Consolidated Financial
Statements in Item No. 8 of this Form 10-K for additional information.

The Company's executive management performs periodic reviews at all of its
operating companies to assess their growth prospects under its ownership based
on many factors including end market conditions, financial viability and their
long term strategic plans. Based upon these reviews, management, from time to
time, has concluded that some businesses had limited growth prospects under its
ownership due to relevant domestic and international market conditions, ongoing
financial viability or the fact that they did not align with management's
long-term strategic plans.

During 2004, the Company discontinued and sold one business in the
Technologies segment in the first quarter of 2004 and sold five businesses that
were discontinued in 2003.

During 2003, the Company discontinued five businesses, three in the
Diversified segment and one business in each of the Industries and Resources
segments, all of which were classified as held for sale as of December 31, 2003.
In aggregate, these businesses were not material to the Company's results. In
2004, these five businesses plus one additional business were disposed of or
liquidated for a net after tax loss of $2.4 million.

During 2002, the Company discontinued seven businesses, four in the
Technologies segment and three in the Resources segment. In 2002, two of these
businesses, one from each of Technologies and Resources, were
10

sold for a net after tax loss of $4.5 million. The five remaining businesses
were classified as held for sale as of December 31, 2002. In 2003, all five
businesses were disposed of or liquidated for a net after tax gain of $4.9
million.

Charges to reduce these discontinued businesses to their estimated fair
values have been recorded in earnings (losses) from discontinued operations net
of tax. For the years ended December 31, 2003 and 2002, pre-tax charges were
recorded to write-off goodwill of $17.3 million and $31.6 million, respectively,
and other long-lived asset impairments and other charges were recorded of $0.2
million and $12.3 million, respectively. No charges related to the write-off of
goodwill or other long-lived asset impairments were recorded in 2004.

Also during 2003, in connection with the completion of a federal income tax
audit and commercial resolution of other issues, the Company adjusted certain
reserves established in connection with the sales of previously discontinued
operations and recorded a gain on the sales of discontinued operations net of
tax of $16.6 million, and additional tax benefits of $5.1 million related to
losses previously incurred on sales of business. These amounts were offset by
charges of $13.6 million, net of tax, to reduce discontinued businesses to their
estimated fair value, and a loss on the sale of discontinued operations net of
tax of $6.0 million related to contingent liabilities from previously
discontinued operations. Total losses from discontinued operations in 2002
primarily relate to charges to reduce discontinued businesses to their estimated
fair value.

RAW MATERIALS

Dover's operating companies use a wide variety of raw materials, primarily
metals and semi-processed or finished components, which are generally available
from a number of sources. As a result, shortages or the loss of any single
supplier have not had, and are not likely to have, a material impact on
operating profits. During 2002, steel tariffs were imposed on the importation of
certain steel products, which had a slight adverse impact on a number of Dover
operating companies that use large amounts of steel. These tariffs remained in
effect throughout most of 2003 and were repealed late in the year. In 2004,
there were meaningful increases in raw material costs, particularly steel, and
higher energy costs, including an estimated increase in unrecovered steel costs
of $35 million. These increases primarily affected all three of the Company's
industrial segments. Although steel prices are expected to remain relatively
high during 2005 and will continue to have an impact on a number of Dover
operating companies, the Company expects that the overall raw material cost
impact will be less in 2005 than it was in 2004.

RESEARCH AND DEVELOPMENT

Dover's operating companies are encouraged to develop new products as well
as to upgrade and improve existing products to satisfy customer needs, expand
sales opportunities, maintain or extend competitive advantages, improve product
reliability and reduce production costs. During 2004, approximately $188.3
million was spent on research and development, compared with $158.7 million and
$166.2 million in 2003 and 2002, respectively.

For the Technologies companies, efforts in these areas tend to be
particularly significant because the rate of product development by their
customers is often quite high. In general, the Technologies companies that
provide electronic assembly equipment and services can anticipate that the
performance capabilities of such equipment are expected to improve significantly
over time, with a concurrent expectation of lower operating costs and increasing
efficiency. Significant new product development and introduction costs were
realized in 2003-2004, which are expected to moderate in 2005. Likewise,
Technologies companies developing specialty electronic components for the
datacom and telecom commercial markets anticipate a continuing rate of product
performance improvement and reduced cost, such that product life cycles
generally average less than five years with meaningful sales price reductions
over that time period.

The Industries, Resources and Diversified segments contain many businesses
that are also involved in important product improvement initiatives. These
businesses also concentrate on working closely with customers on specific
applications, expanding product lines and market applications, and continuously
improving manufacturing processes. Only a few of these businesses experience the
same rate of change in their markets and products that is experienced generally
by the Technologies businesses.
11

INTELLECTUAL PROPERTY

The Company owns many patents, trademarks, licenses and other forms of
intellectual property, which have been acquired over a number of years and, to
the extent relevant, expire at various times over a number of years. A large
portion of the Company's intellectual property consists of confidential and
proprietary information constituting trade secrets that the Company seeks to
protect in various ways including confidentiality agreements with employees and
suppliers where appropriate. While the Company's intellectual property is
important to its success, the loss or expiration of any significant portion of
these rights probably would not materially affect the Company or any of its
segments. The Company believes that its commitment to continuous engineering
improvements, new product development and improved manufacturing techniques, as
well as strong sales, marketing and service efforts, are significant to its
general leadership position in the niche markets that it serves.

SEASONALITY

In general, Dover's operations, while not seasonal, tend to have stronger
revenues in the second and third quarters. In particular, those companies
serving the transportation, construction, waste hauling, petroleum, commercial
refrigeration and food service markets tend to be strong during the second and
third quarters. Companies serving the major equipment markets, such as power
generation, chemical and processing industries, tend to have long lead times
geared to seasonal, commercial or consumer demands, which tend to delay or
accelerate product ordering and delivery to coincide with those market trends.

CUSTOMERS

Dover's businesses serve thousands of customers, no one of which accounted
for more than 10% of the Company's consolidated revenues in 2004. Within each of
the four segments, no customer accounted for more than 10% of that segment's
sales in 2004.

The Technologies Specialty Electronic Component (SEC) group addresses the
military, space, aerospace, commercial and datacom/telecom infrastructure
markets. Their customers include some of the largest customers in these markets
including Raytheon (military) and Lucent, Cisco and Huawei (datacom/telecom). In
addition, many of the OEM customers of the SEC group outsource their
manufacturing to Electronic Manufacturing Services (EMS) companies. The
Technologies' Circuit Board Assembly and Test group customers also include many
of the largest global EMS companies including Jabil, Solectron, Celestica and
Flextronics and the newer emerging EMS companies in China such as Foxconn,
Asustek, Inventec and Wistron.

In the other Dover segments, customer concentrations are quite varied.
Companies supplying the automotive and commercial refrigeration industries tend
to deal with a few large customers that are significant within those industries.
This also tends to be true for companies supplying the power generation,
aerospace and chemical industries. In the other markets served, there is usually
a much lower concentration of customers, particularly where the companies
provide a substantial number of products and services, applicable to a broad
range of end use applications.

BACKLOG

Backlog generally is not a significant factor in most of Dover's
businesses, as most of Dover's products have relatively short order-to-delivery
periods. It is more relevant to those businesses in the segments which produce
larger and more sophisticated machines or have long-term government contracts,
primarily in the Diversified segment as well as the Heil companies from the
Industries segment and the CBAT and SEC companies from the Technologies segment.
Total company backlog as of December 31, 2004 and 2003 was $1,057.4 million and
$822.9 million, respectively.

12

COMPETITION

Dover's competitive environment is complex because of the wide diversity of
the products it manufactures and the markets it serves. In general, most Dover
companies are market leaders which compete with only a few companies and the key
competitive factors are customer service, product quality and innovation. In
addition, since most of Dover's manufacturing operations are in the United
States, Dover usually is a more significant competitor domestically than in
foreign markets.

In the Technologies segment, Dover competes globally against a few very
large companies, primarily operating in Japan, Europe and the Far East. Its
primary competitors are Japanese producers, including Fuji Machine, Panasonic
and TDK, and European manufacturers like Philips and Siemens.

Within the other segments, competition is primarily domestic, although an
increasing number of Dover companies see more international competitors and
several serve markets which are predominantly international, particularly
Belvac, Quartzdyne, RPA Process Technologies, Tipper Tie, Tranter, and Waukesha.

INTERNATIONAL

For foreign sales, export sales and an allocation of the assets of the
Company's continuing operations, see Note 14 to the Consolidated Financial
Statements in Item No. 8 of this Form 10-K.

Although international operations are subject to certain risks, such as
price and exchange rate fluctuations and foreign governmental restrictions,
Dover intends to increase its expansion into foreign markets including South
America, Asia and Eastern Europe.

The countries where most of Dover's foreign subsidiaries and affiliates are
based are France, Germany, the U.K., The Netherlands, Sweden, Switzerland and,
with increased emphasis, China.

ENVIRONMENTAL MATTERS

Dover believes its operations generally are in substantial compliance with
applicable regulations. In a few instances, particular plants and businesses
have been the subject of administrative and legal proceedings with governmental
agencies or private parties relating to the discharge or potential discharge of
regulated substances. Where necessary, these matters have been addressed with
specific consent orders to achieve compliance. Dover believes that continued
compliance will not have any material impact on the Company's financial position
going forward and will not require significant capital expenditures.

EMPLOYEES

The Company had approximately 28,100 employees as of December 31, 2004.

OTHER INFORMATION

Dover makes available free of charge through the "Financial Reports" link
on its Internet website, http://www.dovercorporation.com, the Company's annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, and any amendments to the reports. Dover posts each of these reports on the
website as soon as reasonably practicable after the report is filed with the
Securities and Exchange Commission. The information on the Company's Internet
website is not incorporated into this Form 10-K.

13

ITEM 2. PROPERTIES

The number, type, location and size of the Company's properties as of
December 31, 2004 are shown on the following charts, by segment:

The facilities are generally well maintained and suitable for the
operations conducted. In 2005, the Company expects to make modest increases in
capacity for a few businesses experiencing strong growth demands.

ITEM 3. LEGAL PROCEEDINGS

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 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 or patent
infringement, litigation and administrative proceedings involving employment
matters, and commercial disputes. 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 or any need for additional reserves,
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 Company's financial position, results of
operations, cash flows or competitive position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Company's security holders in the
last quarter of 2004.

EXECUTIVE OFFICERS OF THE REGISTRANT

All officers are elected annually at the first meeting of the Board of
Directors following the annual meeting of stockholders and are subject to
removal at any time by the Board of Directors. The executive

14

officers of Dover as of February 28, 2005, and their positions with the Company
(and, where relevant, prior business experience) for the past five years are as
follows:

15

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

The principal market in which the Company's common stock is traded is the
New York Stock Exchange. Information on the high and low sales prices of such
stock, and the frequency and the amount of dividends paid during the last two
years is as follows:

DOVER CORPORATION COMMON STOCK CASH DIVIDENDS AND MARKET PRICES(1)

- ---------------

(1) As reported in the Wall Street Journal

The number of holders of record of the Company's Common Stock as of
February 28, 2005 was approximately 14,000. This figure includes participants in
the Company's 401(k) program.

On November 15, 2004 pursuant to the Dover Corporation 1996 Non-Employee
Directors' Stock Compensation Plan (the "Directors' Plan"), the Company issued
an aggregate of 9,120 shares of its Common Stock to its eight outside directors
(after withholding an aggregate of 3,904 additional shares to satisfy tax
obligations), as compensation for serving as directors of the Company during
2004.

Under the Dover Corporation Directors' Plan as amended effective November
4, 2004, non-employee Directors receive annual compensation in an amount set
from time to time by the Board, payable partly in cash and partly in common
stock as such allocations may be adjusted from time to time by the Board of
Directors, subject to the limitation set forth in the Directors' Plan on the
maximum number of shares that may be granted to any Director in any year (10,000
shares). For 2003 and 2004, annual compensation was set at $90,000, payable 25%
in cash and 75% in common stock. For 2004, the annual compensation of $90,000
was paid by $22,500 in cash and 1,628 shares of common stock, based on the fair
market value of common stock on November 15, 2004.

Dover purchased a number of its shares during the fourth quarter of 2004.
The shares listed below were acquired by Dover from the holders of its employee
stock options when they tendered previously owned shares as full or partial
payment of the exercise price of such stock options. These shares are applied
against the exercise price at market price on the date of exercise. The
following table depicts the purchase of these shares made during the fourth
quarter of the year:

16

ITEM 6. SELECTED FINANCIAL DATA

Selected Dover Corporation financial information for the years 2000 through
2004 is set forth in the following 5-year Consolidated Table.

- ---------------

All results and data in this section reflect continuing operations, which
exclude discontinued operations unless otherwise noted.

(1) Includes pre-tax restructuring charges of $28.7 million and inventory
charges of $12.0 million.

(2) Includes pre-tax restructuring charges of $17.2 million and inventory
charges of $63.8 million.

(3) Includes pre-tax gain on sale of marketable securities of $13.7 million.

17

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

2004 COMPARED WITH 2003

SUMMARY

Sales for 2004 of $5,488.1 million were up $1,074.8 million or 24% from
2003, primarily driven by increases of $396.9 million at Technologies and $354.6
million at Resources. Technologies' sales were impacted by positive trends in
the global electronics industry, particularly in the back-end semiconductor
market, as well as expansion of the Chinese manufacturing capacity. Resources'
sales increased due to improved market conditions and the full year impact of
the 2003 acquisition of Warn Industries. Industries' sales increased $181.2
million and Diversified's sales increased by $142.6 million. Sales would have
increased 20.9% to $5,336.9 million if 2003 foreign currency translation rates
were applied to 2004 results. Acquisitions completed during 2004 contributed
$104.1 million to sales and contributed gross profit of $38.6 million. Gross
profit of $1,894.4 million in 2004 represented a 25% increase compared to
$1,520.4 million in 2003. Gross profit margins for both 2004 and 2003 were 34.5%
as volume increases in the current year were offset by rising commodity prices.

Selling and administrative expenses for 2004 were $1,282.2 million or 23%
of net sales, compared to $1,076.7 million or 24% of net sales in 2003. The
increase in selling and administration expenses includes the costs related to
Sarbanes-Oxley requirements and increases in compensation and pension benefits.
Operating profit of $612.2 million for 2004 increased $168.4 million compared to
the prior year due primarily to the 24% increase in revenues, benefits from the
Company's restructuring programs undertaken during 2002 and 2001, and slightly
improved global economic conditions. Operating profit margin for 2004 was 11.2%
compared to 10.1% for 2003.

Net interest expense decreased 1% to $61.3 million for 2004, compared to
$62.2 million for 2003. The primary reason for the decrease in net interest
expense was income related to the Company's outstanding interest rate swaps
related to a portion of its long-term debt.

Other net income for 2004 was $1.2 million and includes gains on
dispositions, favorable settlements and miscellaneous credits of $9.9 million
which were largely offset by foreign exchange losses of $8.7 million. Other
expenses of $9.7 million for 2003 primarily related to foreign exchange losses
of $6.2 million. The foreign exchange losses in both 2004 and 2003 primarily
relate to appreciation of the Euro against the U.S. dollar.

Dover's effective 2004 tax rate for continuing operations was 25.9%
compared to the 2003 rate of 23.3%. The low effective tax rate for both years is
largely due to the continuing benefit from tax credit programs such as those for
R&E combined with the benefit from U.S. export programs, lower effective foreign
tax rates from the utilization of net operating loss carry forwards and the
recognition of certain capital loss benefits which were higher in 2003.

Net earnings from continuing operations for 2004 were $409.1 million or
$2.00 per diluted share compared to $285.2 million or $1.40 per diluted share
from continuing operations in 2003. For 2004, net earnings before cumulative
effect of change in accounting principle were $412.8 million or $2.02 per
diluted share, including $3.6 million or $.02 per diluted share in earnings from
discontinued operations, compared to $292.9 million or $1.44 per diluted share
for 2003, which included $7.7 million or $.04 per diluted share in earnings from
discontinued operations.

Discontinued operations earnings for 2004 were $3.6 million compared to
earnings of $7.7 million in 2003. During 2003, in connection with the completion
of a federal income tax audit and commercial resolution of other issues, the
Company adjusted certain reserves, established in connection with the sales of
previously discontinued operations, and recorded a gain on the sales of
discontinued operations net of tax of $16.6 million, and additional tax benefits
of $5.1 million related to losses previously incurred on sales of business.
These amounts were offset by charges of $13.6 million, net of tax, to reduce
discontinued businesses to their estimated fair value, and a loss on the sale of
discontinued operations net of tax of $6.0 million related to contingent
liabilities from previously discontinued operations. Total losses from
discontinued operations in

18

2002 primarily relate to charges to reduce discontinued businesses to their
estimated fair value. Please refer to Note 7 in the Consolidated Financial
Statements in Item 8.

For 2002, the impact of the adoption of the Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets," resulted in
a net loss of $121.3 million. The adoption resulted in a goodwill impairment
charge of $345.1 million ($293.0 million, net of tax, or $1.44 diluted earnings
per share). The adoption of the standard also discontinued the amortization of
goodwill effective January 1, 2002. There were no goodwill impairments charges
in 2004 and 2003.

DIVERSIFIED

Diversified's earnings increased 14% on a 12% sales increase, as capital
equipment markets improved throughout the year. The earnings increase was
achieved mainly through higher sales volumes, new products and successful
marketing programs. Most of the companies, especially SWEP, Tranter PHE and Hill
Phoenix, were negatively affected by significantly increased raw material
prices. Crenlo, Mark Andy, Graphics Microsystems, and Hydratight Sweeney
accounted for most of the earnings gain, which was somewhat offset by declines
at SWF and Belvac. Segment bookings improved 22% over prior year, and
Diversified enters 2005 with a record year-end backlog.

Hill Phoenix reported record sales and bookings, and earnings were the
second best ever at 3% below last year's record. Despite slower overall market
conditions and consolidations in the supermarket industry, Hill Phoenix
continues to grow sales through expansion of its customer base by offering
industry-leading product innovations and strong customer service. Earnings at
Refrigeration Systems and National Cooler both exceeded last year. These
increases were offset by lower earnings at Display Cases, which was heavily
impacted by the unprecedented rise in commodity costs and a slow down in new
construction and remodels by two of its major customers. Margins were down
slightly as the rise in material prices outpaced the businesses' ability to
increase prices or fully offset them with cost-reduction initiatives. Revenue
growth is expected to continue in 2005 as Hill Phoenix finished the year with
its highest backlog in three years.

Sargent reported record sales, fueled by the continued recovery of the
commercial and defense aerospace markets. Earnings improved 10%, however margins
were negatively impacted by start-up investments in a facility in Mexico and
increased operational support for Sargent Canada's 89% volume increase. Raw
material availability and increasing cost remained a challenge at all business
units, especially at Sonic. Record bookings improved 23% over prior year, led by
the Marine Division being awarded a large U.S. military order for a submarine
ship set.

Performance Motorsports produced excellent operating leverage as earnings
increased 15% on a 4% sales increase. Their performance was driven by the
recovery of the automotive racing and powersports markets, the addition of new
customers and improved operating efficiency. Earnings records were set at three
of their business units, JE Pistons, ProX and Carrillo. JE Pistons and Carrillo
achieved market share gains with a number of NASCAR racing teams, while ProX
benefited from new products and improved distribution. Wiseco's margins declined
as a result of manufacturing inefficiencies associated with the shift from
2-cycle to 4-cycle pistons. Performance Motorsports exceeded prior year sales,
earnings and margins in every quarter of 2004.

19

SWEP achieved record bookings, sales and earnings, while margins decreased
slightly due to significant material cost increases. Order activity was steady
throughout the year in both its heat pump and boiler markets, and production
capacity was increased with both capital investments and productivity programs
to meet the growing demand. Earnings were up 12%, driven by volume increases,
cost reduction and favorable currency rates. Due to brisk sales in Asia, the
plant in Malaysia increased production volume by almost 100% for the year.

Tranter PHE set new bookings and sales records in 2004, though earnings
dropped below last year by 2%. Earnings benefited from the higher sales volume,
but were more than offset by significantly increased stainless steel and
titanium prices and costs associated with the implementation of a new business
system. Prior investment made in its low-cost facility in India produced
increased capacity and allowed it to double output in 2004. Margins improved
significantly in the fourth quarter, due to an improved sales mix, better
pricing and a reduced workforce. Tranter PHE has had success in selling to new
markets such as ethanol plants in the U.S. and processing plants in Brazil.

Belvac finished the year with flat sales compared to 2003. Earnings were
down 16% due to investments in product development, start-up costs associated
with opening a new facility in the Czech Republic, and increases in commodity
costs. Bookings, especially in the second half, were very strong and increased
by 41% for the full year. The increase in bookings is related to a growing
requirement for can size diversity, conversions in can top sizes, and growth in
the European market. A significant portion of its business includes spares and
retrofits that improve productivity of its customer's equipment. Backlog at
year-end was at its highest point in seven years and was 72% higher than the
prior year.

Crenlo achieved record bookings and sales, due to increased cab volumes
with key customers in the construction/agriculture equipment market. In addition
to the higher volume, its earnings and margins increased significantly as a
result of solid execution of its performance improvement plan. Although steel
costs continued to be a significant issue, it was able to pass through the
majority of the price increase to its customers. Its specialty enclosure
business reported flat sales and earnings for the year. Crenlo's backlog
increased each quarter, and ended the year at 49% above 2003.

Mark Andy's results were much improved over prior year, as it achieved
record sales and bookings and more than doubled earnings. Significant growth in
label press orders were driven by the strength of the Euro, U.S. tax incentives
and improvements in sales strategies. A number of new product introductions in
both the Mark Andy and Comco product lines have enhanced its technology
leadership position in the industry. Growth was seen in both the domestic and
international markets, and indications are that it has taken market share from
competitors.

Hydratight Sweeney had a record year, as earnings grew 57% on a sales gain
of 23%. Its tension and service business drove the performance with strong sales
to the robust oil and gas markets, especially in the North Sea and the Middle
East. Both its Morgrip and Hevilift product lines made strong contributions to
its results in 2004. The Torque business unit's results were down to prior year
due to low hydraulic sales, partially offset by increased industrial and aero
sales, especially to military customers.

Waukesha Bearings reported slightly lower earnings on flat sales as the
power generation market is experiencing a slow recovery. However, its oil and
gas markets continue to be buoyant and are expected to remain strong in 2005.
The decline in earnings is primarily the result of significant one-time charges
associated with a warranty reserve, employee redundancy and recruitment costs,
and a write-down of a facility held for sale, partially offset by a favorable
legal settlement. Bookings and backlog were up due to a large order in the
nuclear equipment market for its CRL business unit.

Graphics Microsystems had an outstanding year with record bookings, sales
and earnings, as it won significant business from six new key customers for its
color and ink control products. It has been successful at changing its business
model, moving its customer base from small and medium size printers in the
aftermarket to large printers and the high-end new press OEM market. A new
product was added, ribbon control, which was successfully approved by an OEM
customer as the standard for its presses. A sizeable R&D operation was

20

established in India, which directly contributed to Graphics Microsystems'
market growth by improving software quality and the overall development process.

SWF had a disappointing year, with declines in sales and a loss for the
year. Results continued to be adversely affected by high warranty costs and
product development expenses. The lack of sustained bookings at a level for
efficient production was another significant negative factor in its performance.
Although market activity improved, the closing cycle for capital investment in
packaging automation continued to increase. The acquisition of GSMA Systems in
March of 2004 increased the company's capabilities by being able to provide
robotic solutions to complex handling problems.

INDUSTRIES

Dover Industries sales increased 17% reflecting continued market share
gains helped by considerable new product introductions. Sales have now increased
for seven consecutive quarters. Earnings grew 14%, driven by sales gains but
were offset by rising steel prices. The largest contributors to earnings
increases were Heil Environmental due to share gains and Chief Automotive which
benefited from new product introductions.

Heil Environmental's performance improved versus 2003 despite significant
steel cost increases, as a small decline in the Refuse Collection Vehicle market
was offset by market share gains. An increase in buying in municipal markets,
increases in market share within the national account segment, further
penetration into the independent hauler segment, and an active New York City
market drove revenues to double-digit gains. Bayne, a 2001 acquisition, also
contributed with record performance during the year driven primarily by newly
gained distribution. Heil's European business grew as well, increasing market
share in the municipal market.

Rotary Lift delivered improved sales driven partially by market share gains
in the important 2-post segment of the market, although much of the increase in
revenues was due to new product categories introduced in the latter half of 2003
that carry lower margins. Earnings were also hampered by escalating steel costs
and margin pressures from low-cost Asian imports. Rotary continues to focus on
providing productivity-based solutions, which has partially insulated it from
severe pricing pressures seen at the commodity end of the business. Rotary's
European operations, enhanced by the acquisition of Blitz in mid-2003, delivered
double digit gains in their first full year as Rotary Lift Europe. Total Rotary
year-end backlog is up over 40% compared to 2003.

Heil Trailer, the only global manufacturer of tank trailers, recovered from
a weak 2003. A stronger US tank market, improved results in Argentina due to
pent-up demand in the Argentine and surrounding economies, and strong
governmental sales at Kalyn Siebert drove the favorable comparisons. However, a
stagnant Asian market hurt by ambivalent enforcement of truck weight limits,
plant shut-down expenses in the UK, and material cost escalations partially
offset this gain. Revenues were positively impacted by a full year of military
shipments, although rising steel costs impacted profitability.

Tipper Tie reported its best results in over four years. Tipper's
international operations, which account for 60% of sales, had another strong
year, building from 2003's solid results. Despite weakness in the German market,
the result of a consolidating retail environment, international sales increased
over 10% driven by strength in Eastern Europe, primarily Russia, Poland,
Romania, Hungary and the Baltic states. Alpina, a Swiss company acquired in
2000, delivered record sales and earnings surpassing its record performance in

21

2003. The US business rebounded moderately amid continued pricing pressures.
Tipper Tie benefited from strength in the European currencies which was offset
by increased aluminum costs.

Marathon delivered record sales driven by strength across its product line.
Recycling products had a strong year as baler sales increased behind new product
introductions and product redesigns. Marathon increased its market share due in
part to a large one-time order from a national account, by leveraging its broad
product line, and by focusing engineering efforts on identifying customer needs.
This has led to increased new product activity that will continue into 2005.
Accordingly, backlogs are up 19%.

Investments in products for major retail, financial institutions, and
global customers drove Triton's sales to the highest level in its history.
During the year, Triton produced its 100,000(th)ATM while achieving sales of
over 20,000 units. This year marked the transition from serving primarily
low-end retail ATM markets to becoming a player in the mid to high-end market of
major retail and financial institutions. Costs associated with these endeavors
hampered margins, but set the stage for positive returns in 2005 and beyond. In
Canada, unit sales were at an all time high, while European unit sales climbed
over 30%.

PDQ's revenues were flat with the prior year as the "in bay automatic'
domestic market held relatively flat throughout the year. After a relatively
strong start to the year, poor weather and rising gas prices were negative
influences on orders, which began to fall off in the third quarter. Sales to
major oil companies were up for the year, but investor sales were flat as
hurricanes and heavy rain reduced near-term car wash volume and therefore made
current investors reconsider their replacement and expansion plans for the year.
New products introduced during the year were well received. Both the G5
S-Series, a higher-end Laser wash, and the Access machine, a wash activation
unit, delivered sales gains in excess of 50% but were not enough to make up for
a less active jobber market.

DI Foodservice, which includes Groen, Randell, and Avtec, reported a
revenue decline and a 70% decline in earnings. Continued weakness in municipal
spending negatively impacted the institutional equipment market for the third
consecutive year. 2004 saw numerous chain restaurant new-store openings being
delayed or put on hold. Earnings results were also impacted by a number of
adverse accrual adjustments that occurred during the year. A management change
has been implemented, and performance is expected to improve in 2005.

Kurz-Kasch's revenues increased over 40% in 2004, primarily driven by the
effect of the acquisition of Wabash Magnetics at the end of 2003. Strong
specialty plastics sales offset weakness in stator sales. Performance at Wabash
was above expectations driven primarily by strength in its irrigation markets.
Profits at Kurz-Kasch Consolidated increased over 2003 levels, but were impacted
by unfavorable product mix and plant closing costs associated with the Wabash
acquisition.

Despite a continued soft economy, consolidation of the auto repair market,
rising steel prices, and insurance industry trends negatively impacting the
collision industry, Chief delivered its best performance since 2001. Rebounding
from a difficult year in 2003, Chief grew sales and earnings at double digit
rates fueled by the introduction of new pulling products and a 75% increase in
measuring equipment unit sales.

Somero grew sales and earnings as the introduction of two new products
contributed to gains both domestically and internationally. The SXP large screed
was developed to replace the original laser screed machine and sales of large
screeds doubled from 2003 levels. The Copperhead XD, a product that primarily
serves the upper deck and smaller floor concrete screeding markets, was improved
to add more power and torque and contributed to an 18% sales gain in Copperhead
revenue. International sales increased to 30% of total revenue, driven by new
market penetration in Europe and Australia.

Koolant Koolers rode a recovery in the machine tool industry and posted
double digit sales and earnings gains. In addition, Koolant Koolers continued
its diversification into other markets and applications, making significant
inroads into the food processing market in 2004. At Schreiber, a recovery in the
plastics and welding markets was partially offset by a slowdown in medical
shipments.

22

RESOURCES

Dover Resources' 2004 sales increased 36%, or $355 million, to $1,337
million primarily due to relatively strong conditions in markets served by Dover
Resources companies. The strength was most prevalent in those companies in the
oil and gas equipment group (Energy Products Group and C. Lee Cook) and those in
the material handling group (Tulsa Winch, Texas Hydraulics, and Warn) that serve
the construction equipment, mobile crane, recovery vehicle, and power sports
markets. All 12 Resources companies increased bookings versus 2003 and Dover
Resources ended the year with a backlog that was 57% above prior year. Earnings
increased by 58%, or $79 million to $216 million and operating margins increased
2.3 points to 16.2%.

Warn, which was acquired on October 1, 2003, continued to generate strong
growth and earnings in the first full year as a Dover company. Warn experienced
record sales in power sports products, strong growth in its branded truck
products, and continued growth in powertrain products driven by increased demand
for light trucks and sport utility vehicles. Sales increases of 22% generated
earnings increases of 13%, which included the impact of increased material costs
that could not be immediately passed on to OEM customers. The new WARN Works(R)
line of lifting and pulling products gained market acceptance at two major home
improvement retailers. The continued flow of new products at Warn is expected to
fuel future growth.

The Energy Products Group financials include four months of the results of
US Synthetic, which was acquired on August 31, 2004. 2004 was a strong year for
the Energy Products Group in terms of sales and earnings growth. The business
did an excellent job of offsetting material price increases and managing through
difficult issues of material shortages.

OPW Fueling Components continued to grow both sales and earnings, a result
of continued expansion of new environmental regulations, as well as an increase
in retail service station construction and remodeling. OPW also benefited from
the opening of a new manufacturing facility in China and an expanded presence in
Brazil. The business generated significant cost savings from its global sourcing
efforts and continued expansion of its Six Sigma quality process.

OPW Fluid Transfer Group increased earnings 26% on a 22% sales increase and
had strong performance at each of its business units. The rail tank car market
experienced stronger growth than recent years and was a factor in the improved
results at Midland. Civacon, Engineered Systems, and European operations all saw
improvement in their transportation and loading equipment markets. The Group
continued to strengthen its global presence with the expansion into Brazil. The
synergy generated across its business units outside the U.S. has been a driver
of international growth.

Wilden grew both sales and earnings in 2004 with exceptionally good growth
outside the U.S. Sales increased 8%, excluding the impact of the Almatec
acquisition, which was completed on December 17, 2004.

Blackmer benefited from restructuring and consolidation initiatives in
2003. The business generated strong earnings leverage as a result of these
initiatives and from actions to grow revenue. Earnings increased significantly
on a sales increase of 13%. Blackmer's French operations also had a strong year
with increases in sales and earnings resulting from initiatives to further
expand its presence outside of France.

De-Sta-Co leveraged an 8% sales increase into a very strong earnings
performance. Most of De-Sta-Co's markets were solid in 2004 with strong growth
in robotics tooling and through major industrial catalog sales.

23

These strengths were dampened by slow growth in the automotive tooling and work
holding markets. Germany was a solid contributor to the improved business
results, due in part to a weaker U.S. dollar.

The Tulsa Winch Group achieved record sales in 2004 with positive market
conditions in most segments served by Tulsa Winch. In particular, the petroleum,
military, construction equipment, and mobile crane markets rebounded in early
2004 and provided increased opportunities for growth. The business has been able
to realize synergy in sales and engineering from the acquisitions of DP,
Pullmaster, and Greer, which were acquired in 2000. The product synergies are
expected to provide even more growth opportunities as electronic sensing is
further expanded across the traditional mechanical and hydraulic winch product
offering.

Texas Hydraulics experienced record bookings in 2004 and was challenged to
overcome capacity constraints and material cost and availability issues. To
accommodate both sales and earnings increases of over 60%, Texas Hydraulics
undertook a number of improvements, including further expansion of "lean
concepts," selective outsourcing and capital investments, which have proven to
be positive factors. The company is now positioned to benefit from these
improvements in 2005.

C. Lee Cook generated a 21% earnings improvement on a 7% sales increase.
The markets served by Cook (gas compression and transmission) were exceptionally
strong in 2004, both in the OEM equipment and the maintenance and service
sectors. Even though Cook had a facility destroyed by a fire in January 2004,
the business was able to recover and get back into operation without a loss of
customers or profitability.

Hydro Systems finished 2004 on a strong note and for the full year achieved
an earnings increase of 5% on a sales increase of 7%. Results were dampened by a
legal settlement in early 2004. The business achieved strong results from its
European operations, benefited from a downsizing in one of its U.S. facilities,
and has begun to see growth in its newly established Brazil business.

RPA Process Technologies completed a year of "rebuilding." After
implementing a restructuring of its French operations in mid-2004, the business
returned to profitability in the second half of 2004. The business achieved
record levels of bookings in 2004 and has a backlog that exceeds 40% of its
sales plan for 2005. There are still challenges facing the business in terms of
global positioning and the need to re-invigorate the product offering, but the
management team is clearly focused on making the necessary changes.

TECHNOLOGIES

Technologies sales increased to $1,628 million, a 32% increase over 2003.
Earnings increased $77 million or 91%. The overall electronics industry
continued its recovery, which commenced in 2003. Particularly strong was the
mid-year activity in the back-end semiconductor markets. However, by the fourth
quarter, the semiconductor and related markets had slowed significantly as did
the level of Chinese contract manufacturers' capital expenditures.

MARKING AND CODING

Imaje had record sales (up 16%) and earnings (up 7%) and continues to see
growth in all of its product areas: Continuous Ink Jet (CIJ) applications in
primary packaging and Drop on Demand (DOD) and Thermal Transfer on Line (TTOL)
applications in secondary packaging and large character printing. CIJ unit
volume for the year was at a record level although non-CIJ products are becoming
an increasing percentage of

24

Imaje's business. The newly released Print & Apply product is being very
well-received in the market. The industrial markets served by Imaje and its
competitors continue to be very competitive with pressure on pricing.

Imaje continues to invest in globalizing its infrastructure. During 2004,
Imaje opened a new and larger manufacturing facility in Shanghai, China,
relocated from Xiamen, China. In addition, during December, Imaje completed the
acquisition of Datamax International, a Florida-based manufacturer of bar code
printers, which will operate as a separate business unit. As this acquisition
closed near year end, Datamax had very little impact on the sales and earnings
of Imaje for 2004.

CIRCUIT BOARD ASSEMBLY AND TEST (CBAT)

Technologies' CBAT businesses reported earnings of $117 million, an
increase of $73 million or 167%. Sales increased 42% to $1,037 million, while
bookings increased 33% to $1,015 million. Most of this growth came from the
companies serving the back-end semiconductor markets (ECT and Alphasem) and from
new technology requirements in solder paste management and soddering (DEK and
Vitronics Soltec).

Everett Charles Technologies (ECT) had an excellent year. Sales increased
62% while earnings increased 129%. ECT acquired the test handling company Rasco
GmbH in June 2004. Rasco contributed approximately 16% of the overall growth in
sales and 35% of the growth in earnings. All areas of ECT performed well, in
particular all of its divisions serving the back end semiconductor markets and
its Probe division, although business activity fell off considerably during the
fourth quarter.

Universal Instruments saw an increase in both sales and profits over 2003.
Universal's second half roll out of new products is beginning to see market
acceptance in competitive situations although margin improvement is still a
challenge. There still remain some transition challenges for 2005, but year end
activity indicates a potential for growing market share.

DEK reported a strong year with sales increases of 50%, resulting in an
earnings increase of 352%. Even with the strong growth, the strengthening of the
UK currency had a negative impact on its margins as a significant portion of its
operating costs are in the United Kingdom. DEK continues to focus on increasing
its recurring revenue base of consumable products -- stencils, spare parts and
other process support products.

Vitronics Soltec performed very well in 2004. Sales and earnings not only
grew 67% and 425%, respectively, but exceeded the record sales and earnings
level of 2000. Vitronics Soltec is gaining market share due to its leadership
role in lead free soldering, strong market acceptance of its selective soldering
machines, and its product breadth that addresses the specific needs of the North
American, European and Asian markets.

Despite the significant fall off in the integrated circuit segment of the
die-attach equipment market during the second half of 2004, Alphasem was able to
expand its business in the memory, chip attach and special application segments,
resulting in sales growth of 75% and earnings improvement of 106% over the prior
year. The acquisition of SSE GmbH in June 2004 has increased Alphasem's ability
to serve special applications.

OK International reported a 20% increase in sales, and a 9% operating
margin, up from a 1.5% margin in 2003. The improvement is in part due to it
having completed the restructuring of its domestic operations into a
25

single manufacturing facility in southern California, further development of its
China manufacturing platform and roll out of a new low-cost soldering system.

Hover-Davis increased sales 49% and had positive earnings for the current
year compared to a small loss in 2003. This growth was attributed primarily to
its circuit assembly feeders. Though not contributing significantly this year,
label feeders and direct die feeders are expected to increase their contribution
to the sales and earnings of Hover-Davis in 2005.

SPECIALTY ELECTRONIC COMPONENTS (SEC)

In Technologies' SEC companies, sales for the year were $257.2 million
compared to $211.6 million last year, an increase of 21.6%. Excluding 2004
acquisitions and divestitures, sales were up 11.1% with stronger demand from
communication equipment customers, which peaked in the second quarter of 2004.

Earnings improved significantly to $15.6 million compared to $7.3 million
last year. During the first half of 2004, SEC margins showed continuous
improvement over 2003, but peaked in the second quarter. The decline in
shipments during the second half of 2004, the downsizing charges at some
companies, and high insurance charges resulted in second half margins of only
4%. Cost reduction/containment, strong sales/product management and integration
activities are the areas of focus for management entering 2005.

Vectron reported an increase in sales of 31% for the year inclusive of
acquisition and divestiture activities. Excluding the impact of these
activities, Vectron saw double digit sales growth. Vectron's earnings for the
year increased by 57% compared to 2003 mostly from the revenue gains on the old
Vectron business. In September 2004, Vectron completed the acquisition of
Corning Frequency Control. This acquisition strengthens Vectron's position in
the precision frequency generation and control industry (primarily wireless
telecom customers) by expanding Vectron's product offerings and capabilities to
provide custom-engineered solutions to customers.

The capacitor companies, Novacap and Dielectric, recorded a combined sales
increase of 22%. Sales of the capacitor companies were enhanced by the
acquisition of Voltronics in May 2004. Voltronics primarily serves the medical
imaging market which remained strong through the second half of 2004, offsetting
the weakness experienced by Novacap and Dielectric from communication equipment
customers. However, pricing pressure from customers in Asia and the impact of
non-recurring insurance charges led to an overall decline in earnings at the
capacitor companies.

K&L Microwave posted a loss in 2004, down from the loss realized in 2003,
but still reflective of an organization and structure that had not been
adequately sized for current business levels. Operational realignment charges
impacted 2004 earnings in the third quarter. K&L posted a profit in the fourth
quarter as a result of this realignment.

Dow Key, which has a strong military and aerospace business, ended the year
with an 9% earnings gain on flat sales. The company experienced strong bookings
in the second half of 2004, which boosted its backlog going into 2005.

26

CRITICAL ACCOUNTING POLICIES

The Company's consolidated financial statements and related public
financial information are based on the application of generally accepted
accounting principles in the United States of America ("GAAP"). GAAP requires
the use of estimates, assumptions, judgments and subjective interpretations of
accounting principles that have an impact on the assets, liabilities, revenue
and expense amounts reported. These estimates can also affect supplemental
information contained in the public disclosures of the Company, including
information regarding contingencies, risk and its financial condition. The
Company believes its use of estimates and underlying accounting assumptions
conform to GAAP and are consistently applied. Valuations based on estimates are
reviewed for reasonableness on a consistent basis throughout the Company.
Primary areas where the financial information of Dover is subject to the use of
estimates, assumptions and the application of judgment include the following
areas.

Revenue is recognized and earned when all of the following circumstances
are satisfied: a) persuasive evidence of an arrangement exists, b) price is
fixed or determinable, c) collectibility is reasonably assured and d) delivery
has occurred. In revenue transactions where installation is required, revenue
can be recognized when the installation obligation is not essential to the
functionality of the delivered products. Revenue transactions involving
non-essential installation obligations are those which can generally be
completed in a short period of time, at insignificant cost and the skills
required to complete these installations are not unique to the Company and in
many cases can be provided by third parties or the customers. If the
installation obligation is essential to the functionality of the delivered
product, revenues are deferred until installation is complete. In a limited
number of revenue transactions, other post shipment obligations such as training
and customer acceptance are required and, accordingly, revenues are deferred
until the customer is obligated to pay, or acceptance has been confirmed.
Service revenues are recognized and earned when services are performed and are
not significant to any period presented.

Allowances for doubtful accounts are estimated at the individual operating
companies based on estimates of losses related to customer receivable balances.
Estimates are developed by using standard quantitative measures based on
historical losses, adjusting for current economic conditions and, in some cases,
evaluating specific customer accounts for risk of loss. The establishment of
reserves requires the use of judgment and assumptions regarding the potential
for losses on receivable balances. Though Dover considers these balances
adequate and proper, changes in economic conditions in specific markets in which
the Company operates could have a material effect on reserve balances required.
In times of rapid market decline, such as affected a number of Technologies'
companies in 2001 and 2002, reserve balances need to be adjusted in response to
these unusual circumstances.

Inventory for the majority of the Company's subsidiaries, including all
international subsidiaries and the Technologies segment, are stated at the lower
of cost, determined on the first-in, first-out (FIFO) basis, or market. Other
domestic inventory is stated at cost, determined on the last-in, first-out
(LIFO) basis, which is less than market value. Under certain market conditions,
estimates and judgments regarding the valuation of inventory are employed by the
Company to properly value inventory. Technologies companies tend to experience
higher levels of inventory value fluctuations, particularly given the relatively
high rate of product obsolescence over relatively short periods of time.

Occasionally, the Company will establish restructuring reserves at an
operation in accordance with appropriate accounting principles. These reserves,
for both severance and exit costs, require the use of estimates. Though Dover
believes that these estimates accurately reflect the anticipated costs, actual
results may be different than the estimated amounts.

Dover has significant tangible and intangible assets on its balance sheet
that include goodwill and other intangibles related to acquisitions. The
valuation and classification of these assets and the assignment of useful
depreciation and amortization lives involves significant judgments and the use
of estimates. The testing of these intangibles under established accounting
guidelines (including SFAS No. 142) for impairment also requires significant use
of judgment and assumptions, particularly as it relates to the identification of
reporting units and the determination of fair market value. Dover's assets and
reporting units are tested and reviewed for impairment on an annual basis during
the fourth quarter or when there is a significant change in
27

circumstances. The Company believes that its use of estimates and assumptions
are reasonable and comply with generally accepted accounting principles. Changes
in business conditions could potentially require future adjustments to these
valuations.

The valuation of Dover's pension and other post-retirement plans requires
the use of assumptions and estimates that are used to develop actuarial
valuations of expenses and assets/liabilities. These assumptions include
discount rates, investment returns, projected salary increases and benefits, and
mortality rates. The actuarial assumptions used in Dover's pension reporting are
reviewed annually and compared with external benchmarks to assure that they
accurately account for Dover's future pension obligations. Changes in
assumptions and future investment returns could potentially have a material
impact on Dover's pension expenses and related funding requirements. Dover's
expected long-term rate of return on plan assets is reviewed annually based on
actual returns and portfolio allocation.

Dover has significant amounts of deferred tax assets that are reviewed for
recoverability and valued accordingly. These assets are evaluated by using
estimates of future taxable income streams and the impact of tax planning
strategies. Reserves are also estimated for ongoing audits regarding federal,
state and international issues that are currently unresolved. The Company
routinely monitors the potential impact of these situations and believes that it
is properly reserved. Valuations related to tax accruals and assets can be
impacted by changes in accounting regulations, changes in tax codes and rulings,
changes in statutory tax rates and the Company's future taxable income levels.

Dover has significant accruals and reserves related to its risk management
program. These accruals require the use of estimates and judgment with regard to
risk exposure and ultimate liability. The Company estimates losses under these
programs using actuarial assumptions, Dover's experience, and relevant industry
data. Dover considers the current level of accruals and reserves adequate
relative to current market conditions and Company experience.

Dover has established reserves for environmental and legal contingencies at
both the operating company and corporate levels. A significant amount of
judgment and use of estimates is required to quantify Dover's ultimate exposure
in these matters. The valuation of reserves for contingencies is reviewed on a
quarterly basis at the operating and corporate levels to assure that Dover is
properly reserved. Reserve balances are adjusted to account for changes in
circumstances for ongoing issues and the establishment of additional reserves
for emerging issues. While Dover believes that the current level of reserves is
adequate, future changes in circumstances could impact these determinations.

The Company from time to time will discontinue certain operations for
various reasons. Estimates are used to adjust, if necessary, the assets and
liabilities of discontinued operations to their estimated fair value less costs
to sell. These estimates include assumptions relating to the proceeds
anticipated as a result of the sale. The adjustments to fair market value of
these operations provide the basis for the gain or loss when sold. Changes in
business conditions or the inability to sell an operation could potentially
require future adjustments to these estimates.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company'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 commercial paper and available bank lines of credit and the ability
to attract long-term capital with satisfactory terms. The Company continues to
generate substantial cash from operations and remains in a strong financial
position, with enough liquidity available for reinvestment in existing
businesses and strategic acquisitions while managing the capital structure on a
short and long-term basis.

28

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

Cash flow provided from operating activities during 2004 were up 4.2%
compared to 2003. Increases in cash flows from operations were primarily driven
by increased net earnings of $119.9 million in 2004, while $104.6 million in tax
refunds were received in 2003.

Cash used in investing activities for 2004 rose to $524.9 million from the
prior year, reflecting an increase in acquisition activity from the prior year.
The acquisition expenditures for 2004 were $506.1 million compared to $362.1
million in 2003 as the Company completed eight new purchases. The Company is
hopeful that 2005 acquisition activity will be consistent with the 2004 level
but that will depend largely upon the availability and pricing of appropriate
acquisition candidates. Capital expenditures of $107.4 million for the year were
$11.0 million higher than in 2003. Capital expenditures during 2004 and 2003
were funded by internal cash flow. Capital expenditures for 2005 are expected to
increase over 2004 levels.

Cash used in financing activities during 2004 and 2003 were essentially
flat. Dividends paid of $126.1 million in 2004 were the primary use of the cash
for financing activities in 2004. Cash used in financing activities during 2003
primarily reflected a net $13.5 million increase of debt and dividend payments
of $115.5 million. During 2004, Dover repaid approximately $9 million of
long-term debt and had $65 million of commercial paper outstanding as of
December 31, 2004.

In addition to measuring its cash flow generation and usage based upon the
operating, investing and financing classifications included in the Consolidated
Statements of Cash Flow, the Company also measures free cash flow. 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 and repay debt.
Dover's free cash flow for 2004 and 2003 remained essentially flat including a
large tax refund in 2003. The following table is a reconciliation of free cash
flow with cash flows from operating activities:

The Company's cash and cash equivalents decreased 3% during 2004 to $358
million at December 31, 2004, compared to $370 million at December 31, 2003.

Adjusted working capital (calculated as accounts receivable, plus
inventory, less accounts payable) increased from December 31, 2003 by $220.9
million or 20.0% to $1,324 million, primarily driven by increases in receivables
of $165.1 million to $912.7 million and increases in inventory of $136.4 million
to $775.7 million, offset by increases in payables of $80.6 million to $364.4
million. Excluding the impact of acquisitions on working capital of $105.4
million and changes in foreign currency of $33.2 million, working capital
increased by $82.1 million or 7.4% from December 31, 2003. Increases in
receivables were driven by acquisitions of $49.8 million, increases due to
foreign currency fluctuations of $31.1 million and increased sales activity.
Inventory balances increases were driven by acquisitions of $70.5 million,
increases due to foreign currency

29

fluctuations of $18.7 million and increases due to operational efforts to build
up inventory for the ramping up of production, particularly in the Technologies
segment. Increases in accounts payable were driven by acquisitions of $15.0
million, foreign currency fluctuations of $16.6 million and a concerted effort
by management to better align the payable cycle with the Company's cash receipts
cycle.

Other assets and deferred charges remained essentially flat and were $195.7
million as of December 31, 2004.

At December 31, 2004, the Company's net property, plant, and equipment
amounted to $756.7 million compared to $717.9 million at the end of the
preceding year. The increase in net property, plant and equipment reflected
acquisitions of $63.2 million, capital expenditures of $107.4 million and
increases related to foreign currency fluctuation of $17.4 million, offset by
depreciation.

Goodwill and intangible assets increased $305.1 million and $154.2 million,
respectively. Increases were primarily driven by acquisitions which resulted in
goodwill of $278.7 million and intangible assets of $158.6 million and
fluctuations in foreign currency exchange rates of $26.4 million, offset by
amortization.

The aggregate of current and deferred income tax assets and liabilities
increased from $330.8 million net deferred tax liability at the beginning of the
year to $429.7 million at year-end. This resulted primarily from the increase in
deferrals related to intangible assets ($278.7 acquisition-related), offset by
increases in deferred tax assets from accrued compensation.

Current accrued expenses increased $49.5 million to $471.4 million at
December 31, 2004. Increases during 2004 related to increased accrued
compensation and employee benefits of $30.3 million, increased insurance
accruals of $18.0 million and increases in other accrued expenses of $.7
million.

Retained earnings increased from $3,342.0 million at the beginning of 2004
to $3,628.7 million at December 31, 2004. The $286.7 million increase resulted
from 2004 net earnings of $412.8 million, reduced by cash dividends which
aggregated $126.1 million. Stockholders' equity increased from $2,742.7 million
to $3,118.7 million. The $376.0 million increase resulted mainly from the
increase in retained earnings and increased equity adjustments related to
foreign currency translation of $75.5 million.

Dover's consolidated pension benefit obligation increased by $33.2 million
in 2004. The increase was due principally to plan amendments related to
increased participation in the supplemental benefit plan. In addition, plan
assets increased $15.5 million due to gains on plan investments during the year
which were partially offset by payout of benefits. During 2004, plan amendments
created an increase in the benefit obligation of $26.0 million. Due to the
decrease in the net funded status of the plans and the increase in the
amortization of unrecognized losses, it is estimated that pension expense will
increase from $15.9 to approximately $24.9 million in 2005. The Company
anticipates discretionary contributions to its pension benefit plans of $32
million in 2005, including supplemental benefits.

The Company utilizes the total debt and net debt to total capitalization
calculations to assess its overall financial leverage and believes the
calculations are useful to its stockholders for the same reasons. The total debt
level of $1,092.3 million as of December 31, 2004 increased $24.7 million from
December 31, 2003 as a result of drawing down approximately $25 million more of
short-term commercial paper. As of December 31, 2004, net debt of $734.5 million
represented 19.1% of total capital, a decrease of 1.1 percentage points from
December 31, 2003. Borrowings under the Company's commercial paper program were
minimal throughout 2004, never exceeding $65 million during the year. Commercial
paper outstanding as of December 31, 2004 and 2003 was $65 million and $40
million, respectively. In November 2005, the Company is scheduled to repay $250
million of long term debt.

30

The following table reconciles net debt and net debt to total
capitalization:

On September 8, 2004, the Company entered into a $600 million five-year
unsecured revolving credit facility with a syndicate of fifteen banks. The
Credit Agreement replaced an existing 364-day credit facility and a 3-year
credit facility in the same aggregate principal amount and on substantially the
same terms and is intended to be used primarily as liquidity back-up for the
Company's commercial paper program. As described above, the Credit Agreement has
a five-year term, whereas the prior facilities had respective terms of 364 days
and three years and would otherwise have expired in October 2004 and October
2005, respectively. The Company has not drawn down any loan under the Credit
Agreement, and does not anticipate doing so, and as of December 31, 2004, had
commercial paper outstanding in the principal amount of $65 million.

At the Company's election, loans under the Credit Agreement will bear
interest at a Eurodollar or alternative currency rate based on LIBOR, plus an
applicable margin ranging from 0.19% to 0.60% (subject to adjustment based on
the rating accorded the Company's senior unsecured debt by S&P and Moody's), or
at a base rate pursuant to a formula defined in the Credit Agreement. In
addition, the Company will pay a facility fee and a utilization fee in certain
circumstances, as described in the Credit Agreement. The Credit Agreement
imposes various restrictions on the Company that are substantially identical to
those in the replaced facilities. Among other things, the Credit Agreement
generally requires the Company to maintain an interest coverage ratio of EBITDA
to consolidated net interest expense of not less than 3.5 to 1. The Company is
and has been in compliance with this covenant and the ratio was 12.6 to 1 as of
December 31, 2004, and 9.4 to 1 as of December 31, 2003.

The Company established a Canadian Credit Facility in November of 2002 with
the Bank of Nova Scotia. Under the terms of this Credit Agreement, the Company
has a Canadian (CAD) $30 million bank credit availability and has the option to
borrow in either Canadian Dollars or U.S. Dollars. At December 31, 2004 and
2003, the outstanding borrowings under this facility were approximately CAD $21
million and U.S. $17 million, respectively. The covenants and interest rates
under this facility match those of the primary $600 million revolving credit
facility. The Canadian Credit Facility was renewed for an additional year prior
to its expiration date of November 25, 2004, and now expires on November 22,
2005. The Company intends to replace the Canadian Credit Facility on or before
its expiration date. The primary purpose of this agreement is to facilitate
borrowings in Canada for efficient cash and tax planning.

The Company may, from time to time, enter into interest rate swap
agreements to manage its exposure to interest rate changes. Interest rate swaps
are agreements to exchange fixed and variable rate payments based on notional
principal amounts. As of December 31, 2004, the Company had three interest rate
swaps outstanding for a total notional amount of $150.0 million, designated as
fair value hedges of part of the $150.0 million 6.25% Notes due on June 1, 2008,
to exchange fixed-rate interest for variable-rate interest. There was no hedge
ineffectiveness as of December 31, 2004 and the aggregate fair value of these
interest rate swaps of $0.7 million determined through market quotation was
reported in other assets and long-term debt. During the first quarter of 2004,
the Company terminated an interest rate swap with a notional amount of $50.0
million for an immaterial gain, which is being recognized over the remaining
term of the debt issuance.
31

This interest rate swap was designated as a fair value hedge of the 6.25% Notes,
due June 1, 2008. During the second quarter of 2004, Dover entered into an
interest rate swap with a notional amount of $50.0 million, at more favorable
rates to replace the interest rate swap terminated during the first quarter.
This interest rate swap is designated as a fair value hedge of the 6.25% Notes
due June 1, 2008. The swap is designated in a foreign currency and exchanges
fixed-rate interest for variable-rate interest, which also hedges a portion of
the Company's net investment in foreign operations. Subsequent to December 31,
2004, one interest rate swap with a notional amount of $50.0 million was
terminated with no material impact to the Company.

Dover's long-term debt instruments had a book value of $1,005.7 million on
December 31, 2004 and a fair value of approximately $1,093.0 million. On
December 31, 2003, the Company's long-term debt instruments had a book value of
$1,007.2 million and a fair value of approximately $1,103.0 million.

Management is not aware of any potential impairment to the Company's
liquidity, and the Company is in compliance with all its long-term debt
covenants. It is anticipated that in 2005 any funding requirements above cash
generated from operations will be met through the issuance of commercial paper
or, depending upon market conditions, through the issuance of long-term debt or
some combination of the two.

The Company's credit ratings are as follows for the years ended December
31:

A summary of the Company's undiscounted long-term debt, commitments and
obligations as of December 31, 2004 and the years when these obligations come
due is as follows:

The Company believes that existing sources of liquidity are adequate to
meet anticipated funding needs at comparable risk-based interest rates for the
foreseeable future. Acquisition spending would increase company debt but
management anticipates that the debt to capital ratio will remain generally
consistent with historical levels. Operating cash flow and access to capital
markets are expected to satisfy the Company's various cash flow requirements,
including acquisition spending and pension funding as needed.

NEW ACCOUNTING STANDARDS

In July 2002, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 146, "Accounting for Costs Associated with Exit or Disposal Activities,"
which is effective for exit and disposal activities initiated after December 31,
2002. The standard replaces EITF Issue 94-3 and requires companies to recognize
costs associated with exit or disposal activities when they are incurred, as
defined in SFAS No. 146, rather than at the date of a commitment to an exit or
disposal plan. The provisions of SFAS 146 are to be applied prospectively. The
effect of the adoption of SFAS No. 146 was immaterial to the Company's
consolidated results of operations and financial position.

In November of 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of
32

Others, an interpretation of FASB Statements No. 5, 57 and 107 and Rescission of
FASB Interpretation No. 34." FIN 45 clarifies the requirements of FASB Statement
No. 5, "Accounting for Contingencies," relating to the guarantor's accounting
for, and disclosure of, the issuance of certain types of guarantees. The
disclosure requirements of FIN 45 are effective for financial statements of
interim or annual periods that end after December 15, 2002 and have been
incorporated into the footnotes. The provisions for initial recognition and
measurement are effective on a prospective basis for guarantees that are issued
or modified after December 31, 2002, irrespective of the guarantor's year-end.
FIN 45 requires that upon issuance of a guarantee, the entity must recognize a
liability for the fair value of the obligation it assumes under that guarantee.
The effect of the adoption of FIN 45 was immaterial to the Company's
consolidated results of operations and financial position. The Company has also
adopted the disclosure requirements of FIN 45.

In December of 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure -- an amendment of SFAS 123,"
which is effective for fiscal years ending after December 15, 2002 regarding
certain disclosure requirements which have been incorporated into the footnotes.
This Statement amends FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee compensation. It also amends the disclosure provisions of that
Statement to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation. Finally, this Statement amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The effect of the adoption of SFAS No. 148 had no
impact on the Company's consolidated results of operations or financial
position.

In January 2003, FASB Interpretation No. 46 (FIN 46), "Consolidation of
Variable Interest Entities" was issued. FIN 46 provides guidance on
consolidating variable interest entities and applies immediately to variable
interests created after January 31, 2003. In December 2003, the FASB revised and
superseded FIN 46 with the issuance of FIN 46R in order to address certain
implementation issues that were adopted the first reporting period ending after
March 15, 2004. The interpretation requires variable interest entities to be
consolidated if the equity investment at risk is not sufficient to permit an
entity to finance its activities without support from other parties or the
equity investors lack certain specified characteristics. The effect of the
adoption of FIN 46 was immaterial to the Company's consolidated results of
operations and financial position.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. SFAS
No. 150 applies specifically to a number of financial instruments that companies
have historically presented within their financial statements either as equity
or between the liabilities section and the equity section, rather than as
liabilities. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The effect of the adoption
of SFAS No. 150 was immaterial to the Company's consolidated results of
operations and financial position.

In December 2003, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 104 (SAB 104), Revenue Recognition. SAB 104 supersedes
SAB 101, Revenue Recognition in Financial Statements, to include the guidance
from Emerging Issues Task Force EITF 00-21 "Accounting for Revenue Arrangements
with Multiple Deliverables." The adoption of SAB 104 did not have a material
effect on the Company's consolidated results of operations or financial
position.

In December 2003, the FASB published a revision to SFAS No. 132 "Employers'
Disclosure about Pensions and Other Postretirement Benefits an amendment of FASB
Statements No. 87, 88, and 106." SFAS No. 132R requires additional disclosures
to those in the original SFAS No. 132 about the assets, obligations, cash flows,
and net periodic benefit cost of defined benefit pension plans and other defined
benefit postretirement plans. The provisions of SFAS No. 132 remain in effect
until the provisions of SFAS No. 132R are adopted. SFAS No. 132R is effective
for financial statements with fiscal years ending after December 15,

33

2003. The adoption of SFAS No. 132R did not have a material impact on the
Company's consolidated results of operations or financial position.

In May 2004, the FASB issued FASB Staff Position No. FAS 106-2 (FSP 106-2),
"Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003," which supersedes FSP 106-1.
FSP 106-2 provides guidance on the accounting for the effects of the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 (the "Act") for
employers that sponsor postretirement health care plans that provide
prescription drug benefits. It also requires certain disclosures regarding the
effect of the federal subsidy provided by the Act. This FSP is effective for the
first interim or annual period beginning after June 15, 2004. The effect of
adoption has not been material to the Company's results of operations, cash flow
or financial position.

In November of 2004, the FASB issued SFAS No. 151, "Inventory Costs," an
amendment of ARB No. 43, Chapter 4 "Inventory Pricing." SFAS No. 151 adopts the
IASB view related to inventories 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 No. 151 are applicable to inventory costs
incurred during fiscal years beginning after June 15, 2005. The effect of the
adoption of SFAS No. 151 will be immaterial to the Company's consolidated
results of operations and financial position.

In December of 2004, the FASB issued SFAS No. 123R, "Share-Based Payment."
SFAS No. 123R revises previously issued SFAS 123 "Accounting for Stock-Based
Compensation," supersedes Accounting Principles Board (APB) Opinion No. 25
"Accounting for Stock Issued to Employees," and amends SFAS Statement No. 95
"Statement of Cash Flows." SFAS No. 123R requires the Company to expense the
fair value of employee stock options and other forms of stock-based compensation
for the interim or annual periods beginning after June 15, 2005. 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. The effect of the adoption of SFAS No. 123R will not be materially
different from the pro-forma results included in Note 1 Stock-Based
Compensation.

2003 COMPARED WITH 2002

SUMMARY

Sales for 2003 of $4,413.3 million were up $359.7 million or 9% from 2002,
primarily driven by increases of $194.8 million at Technologies and $109.8
million at Resources. Technologies' sales were impacted by recovery in the
electronics industry. Resources' sales increased due to improved market
conditions and the acquisition of Warn Industries. Diversified's sales increased
$52.5 million, while Industries' sales were essentially flat. Sales would have
increased 4.6% to $4,238.1 million if 2002 foreign currency translation rates
were applied to 2003 results. Acquisitions completed during 2003 contributed
$67.7 million to sales and contributed gross profit of $18.4 million. Gross
profit of $1,520.4 million in 2003 represented a 14% improvement compared to
$1,330.9 million in 2002. Gross profit for 2002 included approximately $12.0
million of inventory provisions primarily incurred by Technologies and, to a
lesser extent, Diversified. Gross profit margins of 34.5% for 2003 compared to
32.8% for 2002 and were positively impacted by increased volume levels and the
prior year's operational realignment and restructuring.

Selling and administrative expenses for 2003 were $1,076.7 million or 24%
of net sales, compared to $996.2 million or 25% of net sales in 2002. Selling
and administrative expenses for 2002 included approximately $28.7 million of
restructuring provisions primarily incurred by Technologies and to a lesser
extent Industries and Diversified. Operating profit of $443.8 million for 2003
increased $109.0 million compared to the prior year due primarily to the 9%
increase in revenues, benefits from the Company's restructuring programs
undertaken during 2002 and 2001 and slightly improved global economic
conditions. Operating profit margin for 2003 was 10.1% compared to 8.3% for
2002.

Net interest expense decreased 4% to $62.2 million for 2003, compared to
$64.8 million for 2002. The primary reasons for the decrease in net interest
expense were the decrease in long-term debt during the year of

34

approximately $26 million, higher levels of interest bearing cash equivalents,
and interest income related to the Company's outstanding interest rate swaps on
some of its long-term debt.

Other net expenses for 2003 were $9.7 million and primarily related to
foreign exchange losses of $6.2 million and legal settlements at the Industries
and Resources segments. Other expenses of $6.6 million for 2002 primarily
related to foreign exchange losses of $6.0 million. The foreign exchange losses
in both 2003 and 2002 primarily relate to appreciation of the Euro against the
U.S. dollar.

Dover's effective 2003 tax rate for continuing operations was 23.3%,
compared to 2002's rate of 21.1%. The low effective tax rate for both years is
largely due to the continuing benefit from tax credit programs such as those for
R&E combined with the benefit from U.S. export programs, lower effective foreign
tax rates from the utilization of net operating loss carryforwards and the
recognition of certain capital loss benefits.

Net earnings from continuing operations for 2003 were $285.2 million or
$1.40 per diluted share compared to $207.8 million or $1.02 per diluted share
from continuing operations in 2002. For 2003, net earnings before cumulative
effect of change in accounting principle were $292.9 million or $1.44 per
diluted share, including $7.7 million or $.04 per diluted share in earnings from
discontinued operations, compared to $171.8 million or $.84 per diluted share
for 2002, which included $36.1 million or $.18 per diluted share in losses from
discontinued operations.

Discontinued operations earnings for 2003 were $7.7 million compared to
losses of $36.1 million in 2002. During 2003, in connection with the completion
of a federal income tax audit and commercial resolution of other issues, the
Company adjusted certain reserves, established in connection with the sales of
previously discontinued operations and recorded a gain on the sales of
discontinued operations net of tax of $16.6 million, and additional tax benefits
of $5.1 million related to losses previously incurred on sales of business.
These amounts were offset by charges of $13.6 million, net of tax, to reduce
discontinued businesses to their estimated fair value, and a loss on the sale of
discontinued operations net of tax of $6.0 million related to contingent
liabilities from previously discontinued operations. Total losses from
discontinued operations in 2002 and 2001 primarily relate to charges to reduce
discontinued businesses to their estimated fair value. Please refer to Note 7 in
the Consolidated Financial Statements in Item 8.

For 2002, the impact of the adoption of the Statement of Financial
Accounting Standard No. 142, "Goodwill and Other Intangible Assets," resulted in
a net loss of $121.3 million. The adoption resulted in a goodwill impairment
charge of $345.1 million ($293.0 million, net of tax, or $1.44 diluted earnings
per share). The adoption of the standard also discontinued the amortization of
goodwill effective January 1, 2002.

DIVERSIFIED

Diversified's earnings increased 3% in 2003 on a 5% sales increase, as
capital equipment markets remained soft. The earnings increase was achieved
mainly through operational improvements, volume and cost reduction efforts.
Record segment bookings improved 7% over the prior year. Hill Phoenix, SWEP and
Belvac accounted for a large portion of the earnings gain, which was somewhat
offset by declines at Waukesha, Performance Motorsports, Graphics Microsystems
and Crenlo.

In 2003, Hill Phoenix reported its second consecutive record year, setting
new highs in sales, earnings and cash flow, again leading Diversified in each of
these three categories. Despite its overall market being down,

35

Hill Phoenix benefited from growth at several of its largest customers as well
as securing new key accounts. Hill Phoenix has been able to outperform its
competition and gain market share in recent years, due largely to industry
leading product innovation and strong customer service. The improvement was
across all its business units, as Display Cases, Refrigeration Systems, National
Cooler and EDP all showed a year-over-year earnings increase. A three point
operating margin improvement was achieved, largely the result of leveraging
value-added pricing and productivity gains. All growth in 2003 and 2002 was
internal, as there were no acquisitions impacting results.

Sargent's earnings were slightly down compared to the prior year, as strong
military business and a successful add-on acquisition were offset by the
extended commercial aerospace downturn. Record bookings improved 32% over the
prior year, led by the Marine Division being awarded a large U.S. military order
for submarine ship sets. Margins fell in 2003 largely due to an unfavorable
sales mix and the decision to invest in several development programs. The Sonic
business unit was hurt by continued airline cutbacks and a significant reduction
in production at their largest customer. Sargent Aerospace Canada, a
manufacturer of airplane components in Montreal, Canada, was acquired in April
and produced positive results throughout the year.

Performance Motorsports' earnings declined for the first time since being
acquired by Diversified in 1998, due to several production issues and a weak
powersports market. Performance Motorsports struggled throughout the year
integrating its December 2002 acquisition of Chambon, where volumes declined and
significant losses resulted. Perfect Bore absorbed high production costs and
also reported a loss, due to lingering production problems resulting from
internalizing a key manufacturing process that had previously been outsourced.
Performance Motorsports' two largest business units, Wiseco and JE Pistons, both
had steady years and reported sales and earnings slightly ahead of prior year.
After four consecutive quarters of unfavorable comparisons to the prior year,
Performance Motorsports saw order intake increase in the fourth quarter and
earnings improved over the prior year. Despite market softness in 2003,
Performance Motorsports maintained its market share and was well positioned to
improve as its markets recovered.

SWEP exceeded prior year bookings, sales, and earnings in every quarter in
2003. Though the year started slow, order activity improved in both its heat
pump and boiler markets and was very strong in the last nine months of the year.
Production capacity was increased with both capital investments and productivity
programs to meet the growing demand. Backlog at the end of 2003 was 67% above
last year. Earnings were up 60% on a 24% increase in sales, driven by cost
reduction, favorable currency rates, and a robust market. Its new central
warehouse in Germany was fully consolidated in 2003, which drove down lead times
and reduced selling and administrative expenses. Though the price of stainless
steel dropped slightly late in the year, potential increases in metal prices
threatened to affect near term margins.

In 2003, Belvac reported its highest earnings in five years, improving 64%
over the prior year. As the only independent global supplier of can forming
equipment, Belvac's recent success was in the non-U.S. market, especially Russia
and Australia, where can manufacturing and consumer use is growing. A
significant portion of its business includes spares and retrofits that improve
the productivity of its customer's equipment. Further investment and advancement
in its plastic container equipment was beginning to complement its can forming
business, and opening up new opportunities for growth. In 2003, Belvac began the
process of establishing a warehouse, service center and related supply chains in
the Czech Republic.

Waukesha had a strong finish to the year, but still recorded a 15% earnings
decline on a 6% drop in revenue. The weak power generation market continued to
negatively impact the Bearings division, and costs to close its South Carolina
facility further reduced earnings. This was the third time in two years that
Bearings down-sized its capacity due to the soft market demand. On a positive
note, the Magnetics Bearing group had a record year in sales and earnings as
project development work began to show a payback. After a slow start to the
year, the Hydratight Sweeney division had a solid comeback in the last three
quarters on strong Torque and Service business. The Tension business was down
for the year, though bookings in its Oil & Gas markets improved in the fourth
quarter setting a good foundation for 2004. Central Research Labs' sales and
earnings were significantly down as orders for a number of large nuclear waste
clean-up projects were delayed into 2004. CRL continues to develop the use of
their products with large OEM's in the pharmaceutical markets.

36

Tranter PHE set new bookings and sales records in 2003, though earnings
dropped below 2002 by 6%. Marine bookings came back strong especially with
shipyards in South Korea. Another solid contributor was the North America
ethanol market that is being driven by investments in alternative energy
sources. Favorable currency translations due to the weakening of the dollar and
higher Eurasian business also increased reported sales. Investments were made in
the India operations to add manufacturing and engineering capability to make
welded products for the Eurasia market. This facility attained the highest
quality approvals for its industry in 2003: PED (Pressure Equipment Directive)
for Europe, and ASME (American Society of Mechanical Engineers) for North
America. Significant gains in productivity, reduced lead times and on-time
delivery in the Swedish manufacturing operations were also achieved.

Mark Andy earnings declined 12% on slightly lower sales, as cost reduction
efforts did not offset weaker gross margins. An unfavorable product mix,
production start-up problems on a new label press, and higher warranty expenses
caused lower earnings in the St. Louis operations. Results improved at year-end
with fourth quarter earnings contributing over half of the year's total
earnings. The package printing equipment market further weakened in 2003 but
began to see some firming late in the year. After a short rebound in label press
orders in 2002, bookings declined 13% in 2003. Comco packaging press orders were
flat in 2003, although 2003 ended with its best quarterly bookings performance
since the acquisition in early 2001. Improvements in sales coverage, upgrades in
sales personnel, and worldwide sales organization changes were made to
strengthen its position. Both U.S. operations received ISO certification and
lean manufacturing initiatives continued to drive improvement.

Crenlo followed 2002's substantial turnaround with lower earnings despite
slightly increased volume. Earnings were down due to an unfavorable sales mix,
rising medical, natural gas and wage costs, and costs associated with projects
that will generate future revenue. The unfavorable sales mix is attributable to
a decline in the specialty enclosure business, which has been negatively
impacted by a large customer's restructuring following a merger. The South
Carolina facility continued to be hurt by under-leveraged fixed costs and high
overtime, resulting in the inability to reach consistent production levels. On a
positive note, cost reductions and productivity gains achieved in 2003
positioned Crenlo to capitalize on higher volumes. Increased order activity in
the fourth quarter by several key customers provided cautious optimism for 2004,
as shipment levels for the first quarter were projected to be higher.

Graphics Microsystem's (GMI) sales grew 3% over 2002, despite the third
consecutive year of a decline in the printing industry. The ColorQuick product
set a new sales record and required a re-alignment of its business resource and
processes. GMI decided to target large growth opportunities and shifted its
business model from serving only small to medium size printers in the
aftermarket to a focus on large printers and the high end new press OEM market.
2003 earnings were negatively affected by necessary investments in R&D, price
concessions, and technical service to pursue this new business.

SWF completed a year of transition, reporting breakeven results as several
key managers were replaced and plant consolidations were finalized. Facilities
in Florida and Washington were consolidated into the California operation,
resulting in overhead cost reduction and business simplification going forward.
Several large warranty issues were resolved in 2003, and new warranty claims
steadily declined throughout the year. Positive strides were made operationally,
including the introduction of laser machining capabilities, formally
establishing preferred suppliers, restructuring the sales and engineering
organizations and the introduction of integrated work groups. The internal
improvements achieved in 2003, SWF to be more externally focused in 2004.

37

INDUSTRIES

Industries earned 12% less on essentially flat sales, reflecting plant
closing costs and margin pressure from earlier in the year. Nevertheless,
quarterly sales and earnings improved sequentially as the year progressed.
Fourth quarter results topped the previous three quarters, reflecting market
share increases and improved market conditions across the majority of companies.
The biggest contributors to earnings increases were PDQ, with strong new product
sales and Tipper Tie which benefited from strong overseas performance,
capitalizing on the opening of the Eastern European markets.

2003 was a challenging year for Heil Environmental. Earnings were down 30%
as its market declined over 20%, resulting in the lowest industry volume since
1997. Municipal markets remained weak and pricing pressures continued.
Environmental closed down a facility and consolidated their two parts
businesses. Performance increased in the second half, as both the third and
fourth quarters showed favorable comparisons to prior year, and full year
bookings and backlog were up reflecting favorable year over year comparisons.
Overseas, Heil was able to leverage a strong UK market while increasing share.

Rotary Lift's 2003 sales were enhanced by the May 2003 acquisition of
Blitz, a German lift manufacturer. However, integrating the existing Rotary Lift
Italian operations into Blitz negatively impacted earnings. North American sales
fell slightly as the industry declined and competitive pressures led to
contracting margins. For the full year, Rotary Lift's sales grew 5% and earnings
were flat. However, a number of new products were introduced in the latter half
of the year, resulting in sales growth of over 8% in the second half. Backlog
was up over 50%, leading to optimism heading into 2004.

Industry declines impacted Heil Trailer, as the U.S. tank trailer markets
decreased for the fourth consecutive year. Reacting to the contraction, Trailer
closed two facilities during 2003. Despite continued price competition, Trailer
was able to grow share in both the petroleum and dry bulk markets. Business
began to pick up later in the year, as fourth quarter revenues in 2003 were 16%
above 2002 levels. Military shipments began in earnest in the fourth quarter of
2003, and will account for an additional $20.0 million of sales in 2004, the
result of a military contract awarded to Heil in late 2003. Kalyn Siebert, a
Heil Trailer subsidiary, benefited from this strong military volume as revenues
almost doubled for the year.

Tipper Tie's European operations achieved record sales driven by strong
performance in Eastern Europe. Earnings improved 21% on a sales increase of 9%.
Alpina, a 2000 acquisition, surpassed 2003's record results as it continued to
expand its product line into new geographic regions. The U.S. business continued
to be challenged amid a weak capital equipment market and continued pricing
pressure.

Marathon's sales and margins declined three percentage points in 2003 which
were primarily the result of pricing pressures driven by market weakness. The
waste equipment market was down, adjusting to the overcapacity of production in
the industry, ultimately leading to price erosion. As a result, Marathon closed
a facility while reducing headcount by over 10%. Strength in their Recycling
Systems Group helped stem the tide, and was viewed as a key growth area for
2004.

Triton, which saw significant improvement in 2002, delivered record
revenues in 2003, although earnings were relatively flat because of new product
start-up costs. Unit sales were up over 10% in a flat U.S. market, resulting in
share gains again in 2003. These gains were attributable to the success of the
9100 product line, which was introduced in mid-2002 and focuses on the broadest
segment of the cash dispenser market. It represented more than two thirds of
2003 unit sales volume. Triton's strong new product focus continued in 2003, as
two key products were introduced late in the year. The FT5000 is a
through-the-wall model aimed at the financial institution market, while the
RL5000 is aimed principally at the retail market. Internationally,

38

both the UK and Canadian markets remained strong, and market share increased in
both of these key focus regions. As 2003 ended, Triton expected to enter
additional countries in 2004 and international markets accounted for
approximately 35% of unit sales.

PDQ's record fourth quarter results contributed to solid year-over-year
gains. Earnings increased 22% while sales increased 12%. An increase in major
oil and gas station business coupled with continued strong investor demand drove
the late-year surge. Market share continued to increase, although competitors
were beginning to have an impact on the low-end market. A major driver in 2002
was the introduction and customer acceptance of several new products, one of
which, a higher-end Laser Wash, accounted for over 30% of sales in the fourth
quarter in 2003.

Declining tax revenues for most states, counties and municipalities led to
a slowdown in DI Foodservice's institutional foodservice equipment market,
continuing a trend which began in 2002. However, both Groen and Randell were
able to grow market share during 2003. There was a pickup in chain restaurant
sales, as many experienced strong same-store-sales growth in the later half of
2003. Institutional markets will continue to struggle, although renovation and
replacements have shown some growth in 2003 and are expected to continue into
2004. Consolidation costs experienced in 2003 to bring the Groen, Randell, and
Avtec businesses under the DI Foodservice umbrella were expected to positively
impact margins in 2004.

Kurz-Kasch rebounded from a challenging 2002 as revenues and earnings
increased in 2003 over 10% driven by the successful integration of
business/product lines acquired in late 2002. In addition, Kurz Kasch purchased
Wabash Magnetics, a manufacturer of actuators and sensors, in December of 2003.
This acquisition positioned Kurz-Kasch to expand into the medical and irrigation
markets, among others.

Dovatech's performance in 2003 benefited from strength in both the Chiller
and Laser businesses. A pickup in semiconductor demand drove the Laser business
performance while strong sales into the medical market resulted in the Chiller
business growing over 18%. Strength in Chief Automotive's computerized measuring
products was more than offset by market contraction in the frame-straightening
market. Somero partially offset significant market weakness with the successful
introduction of the "Copperhead," a walk-behind laser screed, which accounted
for over 60% of unit sales in 2003.

RESOURCES

Resources' 2003 earnings increased by 10% on a sales increase of 13% due to
strong increases from the Energy Products Group, De-Sta-Co Industries and the
OPW companies, and the acquisition of Warn Industries. All twelve Resources
companies increased bookings versus 2002 and ended the year with slightly higher
backlogs overall.

Warn, which was acquired on October 1, 2003, was a significant driver of
Resources' revenue and earnings growth, even after the impact of purchase
accounting. Warn is a leader in the recreational winch business, both for all
terrain vehicles and four-wheel drive vehicles. In addition, Warn is a leading
manufacturer of all wheel drive and four-wheel drive disconnect
technology -- providing products that enhance fuel economy and improve
performance of these vehicles. The continued flow of new products and the
entrance into new markets should drive continued growth in the business.

The Energy Products Group results include Quartzdyne, which was added to
the group in 2003. Overall, the year was extremely positive with an earnings
increase of 41% on a sales increase of 15% -- great operating leverage. The core
products of Alberta Oil Tool and Norris achieved sales and margin increases,
both domestically and globally. Both of these units had record profits.
Ferguson-Beauregard and Norriseal had
39

greatly improved earnings on relatively small increases in sales. Quartzdyne was
the exception in the group. While continuing to achieve very respectable
earnings, Quartzdyne did not benefit from increased activity in the energy
sector. However, they did not experience any loss of market share and the
company continued to invest in new products to allow expansion of its served
markets.

OPW Fueling Components had a very strong 2003, leveraging earnings 35% on a
sales increase of 8%. OPW achieved solid business growth from its "newly
certified" products for compliance with the "Enhanced Vapor Recovery"
requirements. In addition, the business continued to rationalize capacity in
North America, while at the same time opening a new facility in China and
expanding its presence in Brazil with the opening of a larger manufacturing
facility. Significant benefits were achieved from global sourcing and expansion
of a well-disciplined Six Sigma quality initiative. The full integration of the
EMCO Electronics acquisition into the OPW Fuel Management business was completed
in 2003 and drove an earnings increase in that business unit.

De-Sta-Co Industries increased earnings 23% on a sales increase of 16%.
Continued focus on new product development, internal lean initiatives, and
improvements in channel management provided very positive results. The German
and French operations achieved significant improvement in earnings. The
increased strength in the Industrial Products Group offset weakness in the
electronics and U.S. automotive business segments.

The pump companies, Blackmer and Wilden, experienced a number of challenges
that impacted earnings in 2003, including a legal settlement and costs incurred
to restructure product lines, although both companies made strides to improve
their product offering and grow their business on a global basis. Wilden's
non-U.S. sales grew 20% and were enhanced by the opening of a manufacturing
facility in China, which exceeded first-year plan results, and growth in their
Argentina operation as that economy began to recover. Blackmer had its strongest
year ever in Europe but experienced costs in the U.S. to rationalize capacity
and "right-size" its U.S. operations.

OPW Fluid Transfer Group had a year of solid improvement across all its
business units with earnings increasing 16% on a sales increase of 8%.
Improvements in working capital contributed to a higher return on investment.
Strong results from Midland and Europe were the drivers to better results. The
global footprint for this business was expanded in 2003 with the addition of a
facility in Brazil and finalization of a restructuring in Europe.

C. Lee Cook benefited from right-sizing in 2002, as well as from a number
of management-led initiatives to reduce product cost and expand its service
presence. The business achieved positive earnings leverage of 15% on a modest
sales increase of 4%. As the year 2003 ended, C. Lee Cook experienced
improvements across all of its business units -- both OEM related and service
related. This increase indicated continued investment in natural gas production
and transmission. With demand for natural gas increasing, the Company
anticipated strength in the business going forward.

Texas Hydraulics experienced a challenging year as a result of continued
price pressure and reduced schedules from construction equipment customers.
During 2003, the business made significant investments in new products and new
customer applications/prototypes. As the year 2003 closed, orders resulting from
new products were strong. The business continued to implement lean concepts and
selective outsourcing to improve its cost structures.

Tulsa Winch was able to grow earnings 6% on a sales increase of 9%. There
was very little consistency across market segments, with difficult conditions in
the large crane and service crane markets being offset by strength in the
petroleum, military, and marine segments. Continued efforts to leverage
strengths across the group were leading to advanced new product offerings to be
introduced in 2004.

RPA Process Technologies experienced an extremely difficult year in 2003
with declining revenues and a full year loss resulting from depressed capital
spending in the process industry coupled with significant one-time charges to
downsize its operations in France.

Hydro Systems experienced relatively flat sales in its traditional core
U.S. business but was still able to achieve a 4% earnings gain on a 5% sales
increase, primarily as a result of prior investments in new products

40

and Europe. The European operations more than doubled earnings as a result of
some very successful new product launches. Hydro also invested in the start-up
of a new facility in Brazil, which began operations during the fourth quarter of
2003 and was expected to provide full year benefits in 2004.

TECHNOLOGIES

Technologies' 2003 sales increased to $1,231.2 million, a 19% increase over
2002. As a result of both the restructuring commenced in the fourth quarter of
2002 and increased revenues, earnings increased to $84.8 million, a $115.1
million improvement from a loss in 2002 of $30.3 million. Included in the loss
for 2002 were restructuring, inventory and other charges totaling $35.2 million.
The electronics industry is clearly in a recovery mode with even the telecom
sector showing signs of increased equipment spending. As electronic
manufacturing continued to shift to Asia, almost all of the Technologies
companies improved their Asian infrastructure in sales and marketing and, at the
equipment companies, in manufacturing. In addition, all of the companies
continued their efforts to expand their product offering in the markets and
applications they serve. Military, space, avionics, medical, automotive and
other industrial applications played a greater role in 2003 than in 2002 in the
Technologies businesses.

CIRCUIT BOARD AND ASSEMBLY AND TEST

Technologies' CBAT businesses reported 2003 earnings of $43.7 million
versus a loss of $55.7 million in 2002. The 2002 loss included inventory,
restructuring and other charges of $25.9 million. Sales increased 22% to $731.8
million while bookings increased 24% to $760.9 million. Much of this growth came
from the back-end semiconductor businesses, ECT and Alphasem, whose sales grew
from 16% of CBAT sales in 2002 to over 22% in 2003.

Universal Instruments saw a 17% increase in sales over 2002 and recorded a
profit for the first time since 2000. Universal continued to invest in new
products which were exhibited at the November 2003 Productronica show in
Germany. Universal was expected to face significant challenges transitioning to
these new products and bringing them to full commercialization in the second
half of 2004.

While sales at Everett Charles Technologies increased 18%, profits
increased dramatically with double-digit margins, after reporting a loss in
2002. The largest increase in sales occurred in the back-end semiconductor test
products. The test handling equipment at MultiTest and the load board and socket
products at ECT reported the largest increase in sales and bookings activity.
This trend was expected to continue into the beginning of 2004.
41

DEK experienced a 26% increase in sales and reported a profit for 2003. The
weakening dollar impacted DEK's gross margin as much of its manufacturing
remained in the UK, while sales were generally sold in U.S. dollars or
U.S.-dollar-linked currencies. The 2002 acquisition of Acumen was integrated and
provided increased levels of non-machine recurring revenues.

OK International reported a slight increase in sales of 4% which generated
positive earnings compared to a loss in 2002. Earnings were slightly positive
compared to a loss in prior years. During 2003, OK completely restructured its
domestic operations by consolidating the majority of its manufacturing into a
single plant in southern California.

Vitronics Soltec reported a 39% increase in sales and also had a profit
versus a loss in 2002. Its new products in selective soldering and its "lead
free" solder knowledge leadership helped Vitronics continue to gain market share
against its competitors.

Alphasem reported a 103% increase in sales and positive earnings in 2003,
in contrast to a loss in 2002. Alphasem serves the back-end semiconductor
business with die bonding equipment. Under a new President, Alphasem has
restructured the company's management team, its R&D efforts, Asian sales force
and logistics, and established a Chinese manufacturing organization. These
efforts have had a significant impact on the improved financial results of the
Company.

Hover-Davis, acquired in October of 2002, saw sales increase 14% on a
year-over-year basis. Though financial performance improved over 2002,
Hover-Davis reported a small loss in 2003, as markets served have still not
fully recovered.

SPECIALTY ELECTRONIC COMPONENTS (SEC)

In Technologies' SEC companies, sales increased 3% over 2002, to $211.6
million. Earnings improved significantly to $7.3 million when compared to a loss
of $12.1 million last year. The 2002 loss included inventory, restructuring and
other charges of $9.9 million. Substantially all of this earnings growth came in
the fourth quarter as the first three quarters were basically flat on a
year-to-year comparison. During 2003, the SEC companies made considerable
efforts to expand their customer base and industries served. Telecom products
were a lesser portion of the overall businesses as military, space, avionics,
medical, automotive and other industrial applications grew as a percent of
sales. Towards the end of 2003, even telecom customers increased their spending
with indications that the trend would continue into 2004.

Vectron (formerly referred to as Quadrant), the largest of the SEC
companies, reported an increase in sales of 5% for the year, but 23% for the
fourth quarter alone. Margins improved to 10% in the fourth quarter. Earnings
for the year improved by $17.4 million from a loss in 2002. Vectron continues to
acquire new customers based on its technology, service and quality.

K&L Microwave spent most of 2003 refocusing its business on military and
industrial markets. As its base station customers consolidated their supply
chains, K&L found much of its planned Asian telecom infrastructure business had
diminished. Accordingly, K&L has exited all Asian manufacturing, leaving in
place a sales and marketing team to respond to appropriate opportunities. This
realignment of its business resulted in a loss for K&L for 2003.

42

The capacitor companies, Novacap and Dielectric, both reported increased
sales, 17% and 4%, respectively. Operating margins increased to 13% and 9%,
respectively. Both companies continued their efforts at developing
hi-reliability and hi-frequency applications for their customers.

Dow-Key continued to be profitable on flat sales. Dow-Key serves primarily
the military, space and industrial markets, which have not been as volatile as
the telecom industry.

MARKING AND CODING

Imaje, the French-based industrial marking and coding Company, reported
full year sales of $287.9 million, an increase of 24%, and earnings of almost
$60 million, an increase of 21%. Imaje had historically relied on its continuous
ink-jet small character printer and related ink as its primary products. During
2003 and 2002, Imaje, through acquisitions, acquired "drop on demand" large
character printer and thermal printer technologies. During 2003, products
related to these new capabilities grew to 21% of equipment sales, from 17% in
2002, while at the same time, ink jet unit sales grew 17% year over year.

Imaje has a strong global presence. Sales for 2003, as compared to 2002,
were enhanced by a 20% strengthening of the Euro against the dollar. However,
margins continued to be pressured as the majority of Imaje's product costs were
incurred in Euros while significant amounts of revenues were denominated in U.S.
dollars. Consequently, Imaje was in the process of expanding its production and
delivery platform in both China and North America. These efforts were expected
to be accomplished by mid-2004.

RESTRUCTURING AND INVENTORY CHARGES

During 2002, the Company's segments and operating companies initiated a
variety of restructuring programs. These restructuring programs focused on
reducing the overall cost structure primarily through reductions in headcount
and through the disposition or closure of certain non-strategic or redundant
product lines and manufacturing facilities. Restructuring charges consist of
employee separation and facility exit costs. Restructuring charges for
continuing operations were recorded as selling and administrative expenses. The
employee separation programs for continuing operations involved approximately
3,700 employees, all of whom had been terminated as of December 31, 2003. The
Company had completed the vast majority of restructuring programs undertaken in
2002 by the end of 2003. The remaining exit reserves relate to future lease
payments for facilities that were closed. These costs will be paid over the
remaining term of each lease.

In 2002, the Company initiated restructuring programs at selected operating
companies with ongoing efforts to reduce costs in the continually challenging
business environments in which the Company operates. The total restructuring
charges related to these programs in 2002 were $28.7 million. The restructuring
charges included both employee separation costs of $11.9 million and costs
associated with exit activities of $16.8 million. The restructuring in
Technologies took place in the CBAT and SEC groups, in response to the
significant declines in the end-markets served by these operations. CBAT
recorded $6.6 million for employee separation and $11.2 million for exit
activities. The majority of the severance and exit costs were incurred at
Universal, Everett Charles and DEK. The facility exit costs consist of lease
terminations and idle equipment impairments. SEC recorded $2.5 million for
employee separation and $3.6 million for facility exit activities. A majority of
these costs were incurred at Quadrant and Novacap. Industries recorded
restructuring charges of $3.7 million, of which $2.1 million was incurred to
exit an under-performing product line at Tipper Tie. The remaining $1.6 million
was for employee separation and other exit costs. Diversified recorded $1.1
million of restructuring charges to rationalize its SWF business, of which $0.8
million was for severance. Due to significant declines in the demand for certain
products, special inventory reserves of $12.0 million were established in 2002,
primarily in the Technologies segment and, to a lesser degree, in the
Diversified segment.

NON-GAAP DISCLOSURES

In an effort to provide investors with additional information regarding the
Company's results as determined by generally accepted accounting principles
(GAAP), the Company also discloses non-GAAP information which management
believes provides useful information to investors. Free cash flow, net debt,
total capitalization, operational working capital, revenues excluding the impact
of changes in foreign currency
43

exchange rates and organic sales growth are not financial measures under GAAP
and should not be considered as a substitute for cash flows from operating
activities, debt or equity, sales and working capital as determined in
accordance with GAAP and they may not be comparable to similarly titled measures
reported by other companies. Management believes the (1) net debt to total
capitalization ratio and (2) free cash flow are important measures of operating
performance and liquidity. Net debt to total capitalization is helpful in
evaluating the Company's capital structure and the amount of leverage it
employs. Free cash flow provides both management and investors a measurement of
cash generated from operations that is available to fund acquisitions and repay
debt. Reconciliations of free cash flow, total debt and net debt can be found in
Item 7, Management's Discussion and Analysis. Management believes that reporting
operational working capital (also sometimes called "adjusted working capital"),
which is calculated as accounts receivable, plus inventory, less accounts
payable, provides a meaningful measure of the Company's operational results by
showing the changes caused solely by sales. In addition, management believes
that reporting operational working capital and revenues at constant currency,
which excludes the positive or negative impact of fluctuations in foreign
currency exchange rates, provides a meaningful measure of the Company's
operational changes, given the global nature of Dover's businesses. Management
also believes that reporting organic sales growth, which excludes the impact of
foreign currency exchange rates and the impact of acquisitions, provides a
useful comparison of the Company's revenue performance and trends between
periods.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES

The Company's exposure to market risk for changes in interest rates relates
primarily to the fair value of long-term fixed interest rate debt, interest rate
swaps attached thereto, commercial paper borrowings and investments in cash
equivalents. Generally, the fair market value of fixed-interest rate debt will
increase as interest rates fall and decrease as interest rates rise. A 60 basis
point increase or decrease in interest rates (10% of the Company's weighted
average long-term debt interest rate) would have an immaterial effect on the
fair value of the Company's long-term debt. Commercial paper borrowings are at
variable interest rates, and have maturities of three months or less. A 14 basis
point increase or decrease in the interest rates (10% of the Company's weighted
average commercial paper interest rate) on commercial paper borrowings would
have an immaterial impact on the Company's pre-tax earnings. All highly liquid
investments, including highly liquid debt instruments purchased with an original
maturity of three months or less, are considered cash equivalents. The Company
places its investments in cash equivalents with high credit quality issuers and
limits the amount of exposure to any one issuer. A 21 basis point decrease or
increase in interest rates (10% of the Company's weighted average interest rate)
would have an immaterial impact on the Company's pre-tax earnings. As of
December 31, 2004, the Company had three interest rate swaps outstanding, as
discussed in Note 9 to the Consolidated Financial Statements in Item 8. The
Company does not enter into derivative financial or derivative commodity
instruments for trading or speculative purposes.

FOREIGN EXCHANGE

The Company conducts business in various foreign currencies, primarily in
Canada, Europe, Brazil, China and other Asian countries. Therefore, changes in
the value of the currencies of these countries affect the Company's financial
position and cash flows when translated into U.S. Dollars. The Company has
generally accepted the exposure to exchange rate movements relative to its
investment in foreign operations. As of December 31, 2004 the Company had not
established a formal company-wide foreign-currency hedging program but may, from
time to time, for a specific exposure, enter into fair value hedges. The Company
has mitigated and will continue to mitigate a portion of its currency exposure
through operation of decentralized foreign operating companies in which the
majority of all costs are local-currency based. A change of 10% or less in the
value of all foreign currencies would not have a material effect on the
Company's financial position and cash flows.

44

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE

(ALL OTHER SCHEDULES ARE NOT REQUIRED AND HAVE BEEN OMITTED)

45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Dover Corporation:

We have completed an integrated audit of Dover Corporation's 2004
consolidated financial statements and of its internal control over financial
reporting as of December 31, 2004 and audits of its 2003 and 2002 consolidated
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Our opinions, based on our audits,
are presented below.

CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) present fairly, in all material respects, the
financial position of Dover Corporation and its subsidiaries at December 31,
2004 and 2003, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2004 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedules listed in the index
appearing under Item 15(a)(2) present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit of financial statements
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the
Company changed its method for computing depreciation in 2004.

As discussed in Note 6 to the consolidated financial statements, in 2002
the Company ceased recording amortization of goodwill as of the beginning of the
year and recorded a goodwill impairment charge of $293.0 million, net of taxes.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Also, in our opinion, management's assessment, included in "Management's
Report on Internal Control Over Financial Reporting," appearing under Item 9A,
that the Company maintained effective internal control over financial reporting
as of December 31, 2004 based on criteria established in Internal Control --
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), is fairly stated, in all material respects, based on
those criteria. Furthermore, in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of
December 31, 2004, based on criteria established in Internal Control-Integrated
Framework issued by the COSO. The Company's management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting.
Our responsibility is to express opinions on management's assessment and on the
effectiveness of the Company's internal control over financial reporting based
on our audit. We conducted our audit of internal control over financial
reporting in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. An audit of internal control over financial reporting includes
obtaining an understanding of internal control over financial reporting,
evaluating management's assessment, testing and evaluating the design and
operating

46

effectiveness of internal control, and performing such other procedures as we
consider necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

As described in Management's Report on Internal Control Over Financial
Reporting, management has excluded SSE GmbH, Flexbar, Rasco, Voltronics, US
Synthetics, Corning Frequency Controls, Almatec, and Datamax from its assessment
of internal control over financial reporting as of December 31, 2004 because
they were acquired by the Company in a purchase business combination during
2004. These companies are wholly-owned by the Company and their total revenues
and assets represent less than 3% and 11% of the Company's consolidated total
revenues and assets, respectively, as reflected in its financial statements for
the year ended December 31, 2004.

/s/ PRICEWATERHOUSECOOPERS LLP
--------------------------------------
PricewaterhouseCoopers LLP
New York, New York
March 10, 2005

47

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS (LOSSES)

See Notes to Consolidated Financial Statements.
48

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS (LOSSES) -- (CONTINUED)

The computations of basic and diluted earnings per share from continuing
operations for each year were as follows:

See Notes to Consolidated Financial Statements.
49

DOVER CORPORATION

CONSOLIDATED BALANCE SHEETS

See Notes to Consolidated Financial Statements.
50

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND
COMPREHENSIVE EARNINGS (LOSSES)

- ---------------

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

Common Stock, $1 par value per share. 500,000,000 shares authorized; issued
239,015,326 in 2004, and 238,304,232 shares in 2003.

Treasury Stock; 35,518,671 shares in 2004, and 35,391,575 shares in 2003, at
cost.

Dividends paid per share were $.62 and $.57 and $.54 for 2004, 2003, and 2002,
respectively.

Unrealized holding gains (losses), net of taxes of ($288), $214 and ($207) in
2004, 2003 and 2002, respectively.

U.S. Federal tax benefit recorded in paid in capital of $4,959 in 2004, $3,513
in 2003 and $2,597 in 2002 on stock options exercised.
See Notes to Consolidated Financial Statements.
51

DOVER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

See Notes to Consolidated Financial Statements.
52

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company is a multinational, diversified manufacturing corporation
comprised of 49 stand-alone operating companies which manufacture a broad range
of specialized industrial products and sophisticated manufacturing equipment.
The Company also provides some engineering and testing services, which are not
significant in relation to consolidated revenues. The Company's operating
companies are based primarily in the United States of America and Europe. Until
December 31, 2004, the Company's businesses were divided into four segments.
Beginning with the first quarter 2005 earnings announcement, the Company will
report its results in six segments and discuss its operating companies in 13
groups. Management believes this new operating structure will enhance the
Company's market focus, acquisition capacity and executive leadership. The four
segments into which the Company's businesses were divided until December 31,
2004, were: Diversified, Industries, Resources, and Technologies. Diversified
builds packaging and printing machinery, heat transfer equipment, food
refrigeration and display cases, specialized bearings, construction and
agricultural cabs, as well as sophisticated products for use in the defense,
aerospace and automotive industries. Industries makes products for use in the
waste handling, bulk transport, automotive service, commercial food service and
packaging, welding, cash dispenser and construction industries. Resources
manufactures products primarily for the automotive, fluid handling, petroleum,
original equipment manufacturer (OEM) engineered components and chemical
equipment industries. Technologies builds sophisticated automated assembly and
testing equipment and specialized electronic components for the electronics
industry, and industrial printers for coding and marking. The accounting
policies that affect the more significant elements of the Company's financial
statements and that apply to the Company's segment information are described
briefly below.

CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. Intercompany accounts and transactions have
been eliminated in consolidation. The results of operations of purchased
businesses are included from the dates of acquisitions. Several businesses
qualified for discontinued operations treatment in 2004, 2003, and 2002. The
assets, liabilities, results of operations and cash flows of all discontinued
operations have been segregated and reported as discontinued operations for all
periods presented. The Company has evaluated the requirements of Financial
Accounting Standards Board Interpretation No. 46 ("FIN 46"), "Consolidation of
Variable Interest Entities," and has not identified any variable purpose
entities that would require consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Significant estimates include revenue recognition, allowances for
doubtful accounts receivable, net realizable value of inventories, restructuring
charges, valuation of goodwill, pension and post retirement assumptions, useful
lives associated with amortization and depreciation of intangibles and fixed
assets, warranty reserves, income taxes and tax valuation reserves,
environmental reserves, legal reserves, insurance reserves and the valuations of
discontinued assets and liabilities.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, demand deposits and
short-term investments which are highly liquid in nature and have original
maturities at the time of purchase of three months or less. Cash equivalents
were $357.6 million and $370.4 million at December 31, 2004 and 2003,
respectively.

53

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

Accounts receivable is composed primarily of trade accounts receivable that
arise primarily from the sale of goods or services on account and are stated at
historical cost. Management evaluates accounts receivable at each operating
company to estimate the amount of accounts receivable that will not be collected
in the future and records the provision. The provision for doubtful accounts is
recorded as a charge to operating expense, while the credit is recorded in the
allowance for doubtful accounts, which reduces accounts receivable. The
estimated allowance for doubtful accounts is based primarily on management's
evaluation of the aging of the accounts receivable balance, the financial
condition of its customers, historical trends, and time outstanding of specific
balances. Actual collections of accounts receivable could differ from
management's estimates due to changes in future economic, industry or customer
financial conditions.

Receivables consist of the following at December 31, 2004 and 2003.

Following are the changes in the allowance for doubtful accounts during the
years ended December 31, 2004, 2003, and 2002.

INVENTORIES

Inventory for the majority of the Company's subsidiaries, including all
international subsidiaries and the Technologies segment, are stated at the lower
of cost, determined on the first-in, first-out (FIFO) basis, or market. Other
domestic inventory is stated at cost, determined on the last-in, first-out
(LIFO) basis, which is less than market value.

PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

Property, plant and equipment includes the cost of land, buildings,
equipment and significant improvements to existing plant and equipment.
Expenditures for maintenance, repairs and minor renewals are expensed as
incurred. When property or equipment is sold or otherwise disposed of, the
related cost and accumulated depreciation is removed from the respective
accounts and the gain or loss realized on disposition is reflected in earnings.
Depreciation expense was $131.4 million in 2004, $133.1 million in 2003, and
$139.1 million in 2002. Plant and equipment was generally depreciated through
December 31, 2003 based upon accelerated methods, utilizing estimated useful
property lives. Building and lease hold improvement lives ranged from 5 to 50
years; machinery and equipment lives range from 2 to 20 years. The Company
changed to the straight-line method of depreciation for assets acquired on or
after January 1, 2004, from various

54

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accelerated depreciation methods. Management's decision to change was based on
the fact that straight-line depreciation has become a better method of matching
revenue and expenses over the estimated useful life of capitalized assets given
their characteristics and usage patterns. The Company has determined that the
design and durability of these assets increasingly does not diminish to any
significant degree over time and it is therefore preferable to recognize the
related cost uniformly over their estimated useful lives. The effect of the
change for the twelve months ended December 31, 2004, was an increase to net
income of approximately $8.2 million net of tax or $.04 per diluted share.

DERIVATIVES TRANSACTIONS

Derivatives contracts are instruments such as futures, forwards, swaps or
options contracts, which derive their value from underlying assets, indices,
reference rates or a combination of these factors. Derivative instruments may be
privately negotiated contracts, which are often referred to as OTC derivatives,
or they may be listed and traded on an exchange. In April 2003, the FASB issued
SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities." SFAS 149 amends and clarifies financial accounting and reporting
for derivative instruments, including certain derivative instruments embedded in
other contracts and for hedging activities under SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 149 is generally effective
for contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on the Company's financial statements. The company
periodically enters into fair value hedge transactions specifically to hedge its
exposures to various items including but not limited to interest rate and
foreign exchange rate risk. Tests for hedge ineffectiveness are conducted
periodically and any ineffectiveness found is recognized in the income
statement. The company does not enter into derivatives transactions that would
be classified as speculative as defined by SFAS No. 149 and No. 133. The fair
market value of all outstanding transactions is recorded in the Other Assets and
Deferred Charges section of the balance sheet. The corresponding change in value
of the hedged assets/liabilities is recorded directly in that section of the
balance sheet.

GOODWILL AND OTHER INTANGIBLE ASSETS

As of January 1, 2002, the Company follows Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
In accordance with the guidelines of this accounting principle, goodwill and
indefinite-lived intangible assets are no longer amortized and are assessed for
impairment on at least an annual basis. Refer to Note 6 for disclosure on the
impact of the adoption. The Company has elected to test annually for goodwill
impairment in the fourth quarter of the fiscal year. Goodwill of a reporting
unit will also be tested for impairment between annual tests if a triggering
event occurs, as defined by SFAS No. 142, that could potentially reduce the fair
value of the reporting unit below its carrying value.

LONG-LIVED ASSETS

In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets," long-lived assets are reviewed for impairment annually
and whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. If an indicator of impairment exists
for any grouping of assets, an estimate of undiscounted future cash flows is
produced and compared to its carrying value. If an asset is determined to be
impaired, the loss is measured by the excess of the carrying amount of the asset
over its fair value as determined by an estimate of discounted future cash
flows.

55

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

COMPREHENSIVE EARNINGS (LOSSES)

Comprehensive earnings (losses) includes net earnings (losses), foreign
currency translation, unrecognized gains (losses) on cash flow hedges and both
realized and unrealized holding gains (losses) on marketable securities.

FOREIGN CURRENCY

Assets and liabilities of foreign subsidiaries, where the local currency is
the functional currency, have been translated at year-end exchange rates and
profit and loss accounts have been translated using weighted average yearly
exchange rates. Adjustments resulting from translation have been recorded in the
equity section of the balance sheet as cumulative translation adjustments.
Assets and liabilities of an entity that are denominated in currencies other
than an entity's functional currency are remeasured into the functional currency
using end of period exchange rates. Gains and losses related to these
remeasurements are recorded within the Statement of Earnings (Losses) as a
component of "All other (income) expense, net." Other comprehensive earnings
(losses) were increased by $76.1 million, $157.9 million, and $111.4 million in
2004, 2003 and 2002, respectively, as a result of the foreign currency
translation adjustments.

REVENUE RECOGNITION

Revenue on sales of product is recognized and earned when all of the
following circumstances are satisfied: a) persuasive evidence of an arrangement
exists; b) price is fixed or determinable; c) collectibility is reasonably
assured; and, d) delivery has occurred. In revenue transactions where
installation is required, revenue can be recognized when the installation
obligation is not essential to the functionality of the delivered products.
Revenue transactions involving non-essential installation obligations are those
which can generally be completed in a short period of time, at insignificant
cost, and the skills required to complete these installations are not unique to
the Company and, in many cases, can be provided by third parties or the
customers. If the installation obligation is essential to the functionality of
the delivered product, revenues are deferred until installation is complete. In
a limited number of revenue transactions, other post-shipment obligations such
as training and customer acceptance are required and, accordingly, revenues are
deferred until the customer is obligated to pay, or acceptance has been
confirmed. Service revenues are recognized and earned when services are
performed and are not significant to any period presented.

STOCK-BASED COMPENSATION

SFAS No. 123 "Accounting for Stock-Based Compensation as amended by SFAS
No. 148," allows companies to measure compensation cost in connection with
employee share option plans using a fair value based method or to continue to
use an intrinsic value based method as defined by APB No. 25 "Accounting for
Stock Issued to Employees," which generally does not result in a compensation
cost at time of grant. 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. However, in
accordance with SFAS No. 123R, "Share-Based Payment," the Company will begin to
recognize compensation expense for stock-based awards to employees in the third
quarter of 2005.

56

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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

The fair value of each option grant was estimated on the date of grant
using a Black-Scholes option-pricing model with the following assumptions:

INCOME TAXES

The provision for income taxes on continuing operations includes federal,
state, local and foreign taxes. Tax credits, primarily for research and
experimentation and foreign earnings and export programs are recognized as a
reduction of the provision for income taxes on continuing operations in the year
in which they are available for tax purposes. Deferred taxes are provided on
temporary differences between assets and liabilities for financial reporting and
tax purposes as measured by enacted tax rates expected to apply when temporary
differences are settled or realized. Future tax benefits are recognized to the
extent that realization of those benefits is considered to be more likely than
not. A valuation allowance is established for deferred tax assets for which
realization is not assured. The Company has not provided for any residual U.S.
income taxes on unremitted earnings of foreign subsidiaries as such earnings are
currently intended to be indefinitely reinvested.

On October 22, 2004, the President signed the American Jobs Creation Act of
2004 (the "Act"). The Act creates a temporary incentive for U.S. corporations to
repatriate accumulated income earned abroad by providing an 85 percent dividends
received deduction for certain dividends from controlled foreign corporations.
The deduction is subject to a number of limitations and, as of today,
uncertainty remains as to how to interpret numerous provisions in the Act.
Therefore, the Company is not yet in a position to decide whether, and to what
extent, it might repatriate foreign earnings that have not yet been remitted to
the U.S. Based on

57

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the Company's analysis to date, however, it is reasonably possible that the
Company may repatriate some amount between zero and $176.0 million, with the
respective tax liability ranging from zero to $7.8 million. The Company expects
to be in a position to finalize its assessment by the third quarter of 2005.

RESEARCH AND DEVELOPMENT COSTS

Research and development expenditures, including qualifying engineering
costs, are expensed when incurred and amounted to $188.3 million in 2004, $158.7
million in 2003 and $166.2 million in 2002.

RISK RETENTION, INSURANCE

The Company's property and casualty insurance programs contain various
deductibles that, based on our experience, are typical and customary for a
company of our size. We do not consider any of the deductibles to represent a
material risk for the Company. The Company generally maintains deductibles for
claims and liabilities related primarily to workers' compensation, health and
welfare claims, commercial, general, product and automobile liability, and
property damage and business interruption resulting from certain events. The
Company accrues for claim exposures that are probable of occurrence and can be
reasonably estimated. As part of the Company's risk management program,
insurance is maintained to transfer risk beyond the level of self-retention and
provides stop loss protection on both an individual claim and annual aggregate
basis. The Company self-insures its product and general liability claims up to
$3.0 million per occurrence, its workers' compensation claims up to $5.0 million
per occurrence and automobile liability claims up to $1.0 million per
occurrence. As of January 1, 2005, the Company increased its self-insurance
level for its products and general liability claims up to $5.0 million per
occurrence. Third-party insurance provides coverage in excess of these amounts.
In addition, the Company has aggregate deductible stop loss insurance from
third-party insurers on both an aggregate and an individual occurrence basis
well in excess of the limits discussed above. A worldwide program of property
insurance covers the Company's owned property and any business interruptions
that may occur due to an insured hazard affecting those properties, subject to
reasonable deductibles and aggregate limits.

ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS

The Company follows SFAS Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" and its related amendment SFAS Statement No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities." These statements establish accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The statements require recognition
of all derivatives as either assets or liabilities on the balance sheet and the
measurement of 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 income and are recognized in the income
statement when the hedged item affects earnings. Ineffective portions of changes
in the fair value of cash flow hedges are recognized in earnings. The Company
does not enter into derivative financial instruments for speculative purposes
and does not have a material portfolio of derivative financial instruments.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and cash equivalents, trade receivables,
accounts payable, notes-payable and accrued expenses approximates fair value due
to the short maturity of these instruments.

58

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NEW ACCOUNTING STANDARDS

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which is effective for exit and
disposal activities initiated after December 31, 2002. The standard replaces
EITF Issue 94-3 and requires companies to recognize costs associated with exit
or disposal activities when they are incurred, as defined in SFAS No. 146,
rather than at the date of a commitment to an exit or disposal plan. The
provisions of SFAS 146 are to be applied prospectively. The effect of the
adoption of SFAS No. 146 was immaterial to the Company's consolidated results of
operations and financial position.

In November of 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57 and 107 and Rescission of FASB Interpretation No. 34." FIN
45 clarifies the requirements of FASB Statement No. 5, "Accounting for
Contingencies," relating to the guarantor's accounting for, and disclosure of,
the issuance of certain types of guarantees. The disclosure requirements of FIN
45 are effective for financial statements of interim or annual periods that end
after December 15, 2002, and have been incorporated into the footnotes. The
provisions for initial recognition and measurement are effective on a
prospective basis for guarantees that are issued or modified after December 31,
2002, irrespective of the guarantor's year-end. FIN 45 requires that upon
issuance of a guarantee, the entity must recognize a liability for the fair
value of the obligation it assumes under that guarantee. The effect of the
adoption of FIN 45 was immaterial to the Company's consolidated results of
operations and financial position. The Company has also adopted the disclosure
requirements of FIN 45.

In December of 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure -- an amendment of SFAS 123,"
which is effective for fiscal years ending after December 15, 2002, regarding
certain disclosure requirements that have been incorporated into the footnotes.
This Statement amends FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for an entity that
voluntarily changes to the fair-value-based method of accounting for stock-based
employee compensation. It also amends the disclosure provisions of that
Statement to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation. Finally, this Statement amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The effect of the adoption of SFAS No. 148 had no
impact on the Company's consolidated results of operations or financial
position.

In January 2003, FASB Interpretation No. 46 (FIN 46), "Consolidation of
Variable Interest Entities," was issued. FIN 46 provides guidance on
consolidating variable interest entities and applies immediately to variable
interests created after January 31, 2003. In December 2003, the FASB revised and
superseded FIN 46 with the issuance of FIN 46R in order to address certain
implementation issues that were adopted the first reporting period ending after
March 15, 2004. The interpretation requires variable interest entities to be
consolidated if the equity investment at risk is not sufficient to permit an
entity to finance its activities without support from other parties or the
equity investors lack certain specified characteristics. The effect of the
adoption of FIN 46 was immaterial to the Company's consolidated results of
operations and financial position.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150 establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. SFAS
No. 150 applies specifically to a number of financial instruments that companies
have historically presented within their financial statements either as equity
or between the liabilities section and the equity section, rather than as
liabilities. SFAS No. 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise was effective at the beginning of the
first interim period beginning after June 15, 2003. The effect of the adoption
of SFAS No. 150 was immaterial to the Company's consolidated results of
operations and financial position.
59

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In December 2003, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 104 (SAB 104), Revenue Recognition. SAB 104 supersedes
SAB 101, Revenue Recognition in Financial Statements, to include the guidance
from Emerging Issues Task Force EITF 00-21 "Accounting for Revenue Arrangements
with Multiple Deliverables." The adoption of SAB 104 did not have a material
effect on the Company's consolidated results of operations or financial
position.

In December 2003, the FASB published a revision to SFAS No. 132 "Employers'
Disclosure about Pensions and Other Postretirement Benefits, an amendment of
FASB Statements No. 87, 88, and 106." SFAS No. 132R requires additional
disclosures to those in the original SFAS No. 132 about the assets, obligations,
cash flows, and net periodic benefit cost of defined benefit pension plans and
other defined benefit postretirement plans. SFAS No. 132R is effective for
financial statements with fiscal years ending after December 15, 2003. The
adoption of SFAS No. 132R did not have a material impact on the Company's
consolidated results of operations or financial position.

In May 2004, the FASB issued FASB Staff Position No. FAS 106-2 (FSP 106-2),
"Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003," which supersedes FSP 106-1.
FSP 106-2 provides guidance on the accounting for the effects of the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 (the "Act") for
employers that sponsor postretirement health care plans that provide
prescription drug benefits. It also requires certain disclosures regarding the
effect of the federal subsidy provided by the Act. This FSP was effective for
the first interim or annual period beginning after June 15, 2004. The effect of
adoption has not been material to the Company's results of operations, cash flow
or financial position.

In November of 2004, the FASB issued SFAS No. 151, "Inventory Costs," an
amendment of ARB No. 43, Chapter 4 "Inventory Pricing." SFAS No. 151 adopts the
IASB view related to inventories 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 No. 151 are applicable to inventory costs
incurred during fiscal years beginning after June 15, 2005. The effect of the
adoption of SFAS No. 151 will be immaterial to the Company's consolidated
results of operations and financial position.

In December of 2004, the FASB issued SFAS No. 123R, "Share-Based Payment."
SFAS No. 123R revises previously issued SFAS 123 "Accounting for Stock-Based
Compensation," supersedes Accounting Principles Board (APB) Opinion No. 25
"Accounting for Stock Issued to Employees", and amends SFAS Statement No. 95
"Statement of Cash Flows." SFAS No. 123R requires the Company to expense the
fair value of employee stock options and other forms of stock-based compensation
for the interim or annual periods beginning after June 15, 2005. 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. The effect of the adoption of SFAS No. 123R will not be materially
different from the pro-forma results included in Note 1 Stock-Based
Compensation.

RECLASSIFICATIONS

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

2. ACQUISITIONS

All acquisitions which are listed below for the years ending 2004 and 2003,
have been accounted for by the purchase method of accounting. Accordingly, the
accounts of the acquired companies, after adjustment to reflect fair market
values assigned to assets and liabilities, have been included in the
consolidated financial statements from their respective dates of acquisitions.

60

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2004 ACQUISITIONS

The aggregate cost of the 2004 acquisitions was approximately $517.5
million. The amount assigned to goodwill and major intangible asset
classifications by segment is as follows:

Note that these intangible amounts are subject to change pending final
valuation and purchase price allocation.

61

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2003 ACQUISITIONS

The aggregate cost of the 2003 acquisitions was approximately $367.5
million of which $184.9 million represents goodwill.

The following unaudited pro forma information presents the results of
operations of the Company as if the 2004 and 2003 acquisitions had taken place
on January 1, 2004 and January 1, 2003, respectively.

These pro forma results of operations have been prepared for comparative
purposes only and include certain adjustments, such as 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 that actually
would have resulted had the acquisitions occurred on the date indicated, or that
may result in the future.

On October 1, 2003, Dover acquired Warn Industries, Inc. for approximately
$326.0 million in cash. Warn, located in Portland, Oregon, is the industry
leader in the design, manufacture and marketing of high-performance vehicular
winches. Warn, with annual sales in excess of $150 million, is a stand-alone
operating company within the Resources segment. The acquisition was originally
financed with existing cash on hand and commercial paper borrowings. During the
fourth quarter of 2003, all the commercial paper borrowings

62

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

associated with the acquisition were repaid. The results of Warn's operations
have been included in the consolidated financial statements since the date of
acquisition. The Company has obtained a valuation for certain tangible and
intangible assets related to the acquisition. Approximately $91.5 million of the
goodwill is deductible for tax purposes.

The following table is a summary of the estimated fair values of the assets
acquired and liabilities assumed as of the date of acquisition:

3. INVENTORIES

At December 31, 2004 and 2003, domestic inventories determined by the LIFO
inventory method amounted to $138.7 million and $123.7, respectively.

63

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. PROPERTY, PLANT AND EQUIPMENT

5. OTHER ACCRUED EXPENSES

6. GOODWILL AND OTHER INTANGIBLE ASSETS

As of January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets." In accordance with the guidelines of this accounting
principle, goodwill and indefinite-lived intangible assets are no longer
amortized but will be assessed for impairment on at least an annual basis. As an
initial step in the implementation process, the Company identified 41 reporting
units that would be tested for impairment. In the Industries, Diversified, and
Resources market segments the "stand-alone" operating companies were identified
as "reporting units." These entities qualify as reporting units in that they are
one level below an operating segment, discrete financial information exists for
each entity and the segment executive management group directly reviews these
units. In the Technologies segment, three reporting groups were identified,
Marking (consisting of one stand-alone operating company), Circuit Board
Assembly and Test or "CBAT" and Specialty Electronic Components or "SEC."

As required under the transitional accounting provisions of SFAS No. 142,
the Company completed both steps required to identify and measure goodwill
impairment at each of the reporting units as of January 1, 2002. The first step
involved identifying all reporting units with carrying values (including
goodwill) in excess of fair value, which was estimated using the present value
of future cash flows. The identified reporting units from the first step were
then measured for impairment by comparing the implied fair value of the
reporting unit goodwill, determined in the same manner as in a business
combination, with the carrying amount of the goodwill. As a result of these
procedures, goodwill was reduced by $345.1 million and a net after tax charge of
$293.0 million was recognized as a cumulative effect of a change in accounting
principle in the first quarter of 2002. Five stand-alone operating companies or
reporting units accounted for over 90% of the total impairment -- Triton and
Somero from the Industries segment, Crenlo and Mark Andy from the Diversified

64

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

segment, and Wilden from the Resources segment. Various factors impacted the
identification and amounts of impairment recognized at the reporting units.
These included the current market conditions in terms of size and new product
opportunities, current and/or future operating margins and future growth
potential relative to expectations when acquired. Of the total goodwill
reduction, $148.0 million was from the Diversified segment, $127.5 million was
from the Industries Segment and $69.6 million was from the Resources segment.
Additionally, the Company completed its reassessment of recognized intangible
assets, including trademarks, and adjusted the remaining amortization lives of
certain intangibles based on relevant factors.

The Company has elected to annually test for goodwill impairment in the
fourth quarter of its fiscal year, or when there is a significant change in
circumstance. The Company, subsequent to the adoption of SFAS No. 142, has
tested the identified reporting units in the fourth quarter of 2004 and 2003,
respectively, and has determined that there has been no additional goodwill
impairment.

The changes in the carrying value of goodwill by market segment through the
year ended December 31, 2004 are as follows:

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

- ---------------

* Intangible asset balance minimum pension liability requirements related to the
Company's Supplemental Executive Retirement Plan Liability.

65

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The total intangible amortization expense for the twelve months ended
December 31, 2004, 2003 and 2002 was $29.4 million, $18.2 million, and $17.8
million, respectively. The estimated amortization expense, based on current
intangible balances, for the next five fiscal years beginning January 1, 2005 is
as follows:

7. DISCONTINUED OPERATIONS

In August of 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which was effective for fiscal
years beginning after December 15, 2001. SFAS No. 144 establishes accounting and
reporting standards for the impairment and disposal of long-lived assets and
discontinued operations. The Company elected to adopt early SFAS No. 144 in
2001. The application of this statement results in the classification, and
separate financial presentation, of certain entities as discontinued operations,
which are not included in continuing operations. The earnings (loss) from
discontinued operations include charges to reduce these businesses to estimated
fair value less costs to sell. Fair value is determined by using quoted market
prices, when available, or other accepted valuation techniques. All interim and
full-year reporting periods have been restated to reflect the discontinued
operations discussed below.

The Company's executive management performs periodic reviews at all of its
operating companies to assess their profitability and growth prospects under its
ownership based on many factors including end market conditions, financial
viability and their long-term strategic plans. Based upon these reviews,
management from time to time has concluded that some businesses had limited
growth prospects under its ownership due to relevant domestic and international
market conditions, or ongoing financial viability, or did not align with
management's long-term strategic plans.

During 2004, the Company discontinued and sold one business in the
Technologies segment in the first quarter of 2004 and sold five businesses that
had been discontinued in 2003. In 2004, all six businesses were disposed of or
liquidated for a net after tax gain of $2.4 million. As of the end of the year,
there were no remaining entities held for sale in discontinued operations.

During 2003, the Company discontinued five businesses, three in the
Diversified segment and one business in each of the Industries and Resources
segments, all of which were identified as held for sale as of December 31, 2003.
In aggregate these businesses were not material to the Company's results.

During 2002, the Company discontinued seven businesses, four in the
Technologies segment and three in the Resources segment. In 2002, two of these
businesses, one from each of Technologies and Resources were sold for a net
after tax loss of $4.5 million. The five remaining businesses were classified as
held for sale as of

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

December 31, 2002. In 2003, the five businesses were disposed of or liquidated
for a net after tax gain of $4.9 million.

RESULTS OF DISCONTINUED OPERATIONS

Charges to reduce these discontinued businesses to their estimated fair
values have been recorded in losses from discontinued operations net of tax. For
the years ended December 31, 2003 and 2002, pre-tax charges were recorded to
write-off goodwill of $17.3 million and $31.6 million and other long-lived asset
impairments and other charges of $0.2 million and $12.3 million, respectively.
In 2004, no such charges to write-off goodwill or impairments to long-lived
assets were recorded.

During 2003, in connection with the completion of a federal income tax
audit and commercial resolution of other issues, the Company adjusted certain
reserves established in connection with the sales of previously discontinued
operations and recorded a gain on the sales of discontinued operations net of
tax of $16.6 million, and additional tax benefits of $5.1 million related to
losses previously incurred on sales of businesses. These amounts were offset by
charges of $13.6 million, net of tax, to reduce discontinued businesses to their
estimated fair value, and a loss on the sale of discontinued operations net of
tax of $6.0 million related to contingent liabilities from previously
discontinued operations. Total losses from discontinued operations in 2002 were
primarily related to charges to reduce discontinued businesses to their
estimated fair value.

The major classes of discontinued assets and liabilities included in the
Consolidated Balance Sheets are as follows:

The assets primarily consist of residual property, plant and equipment and
deferred tax assets. The liabilities relate to short and long-term reserves and
contingencies related to businesses previously sold.

8. RESTRUCTURING AND INVENTORY CHARGES

During 2002, the Company's segments and operating companies initiated a
variety of restructuring programs. These restructuring programs focused on
reducing the overall cost structure primarily through

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reductions in headcount and through the disposition or closure of certain
non-strategic or redundant product lines and manufacturing facilities.
Restructuring charges consist of employee separation and facility exit costs.
Restructuring charges for continuing operations were recorded as selling and
administrative expenses. The employee separation programs for continuing
operations involved approximately 3,700 employees, all of whom had been
terminated as of December 31, 2003. The Company had completed the vast majority
of restructuring programs undertaken in 2002 by the end of 2003. The remaining
exit reserves relate to future lease obligations for facilities that were
closed. These costs will be paid over the remaining term of each lease.

2002 RESTRUCTURING

In 2002, the Company initiated restructuring programs at selected operating
companies with ongoing efforts to reduce costs in the continually challenging
business environments in which the Company operates. The total restructuring
charges related to these programs in 2002 were $28.7 million. The restructuring
charges included both employee separation costs of $11.9 million and costs
associated with exit activities of $16.8 million.

The restructuring in Technologies took place in the CBAT and SEC groups, in
response to the significant declines in the end-markets served by these
operations. CBAT recorded $6.6 million for employee separation and $11.2 million
for exit activities. The majority of the severance and exit costs were incurred
at Universal, Everett Charles and DEK. The facility exit costs consist of lease
terminations and idle equipment impairments. SEC recorded $2.5 million for
employee separation and $3.6 million for facility exit activities. A majority of
these costs were incurred at Quadrant and Novacap.

Industries recorded restructuring charges of $3.7 million, of which $2.1
million was incurred to exit an under-performing product line at Tipper Tie. The
remaining $1.6 million was for employee separation and other exit costs.
Diversified recorded $1.1 million of restructuring charges to rationalize its
SWF business, of which $0.8 million was for severance.

The Company recorded pre-tax restructuring charges by business segment for
the year ended December 31, as follows:

The $1.6 million ending balance in exit costs as of December 31, 2004
represents lease obligations at the Technologies Segment. A reconciliation of
restructuring provisions is as follows:

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Due to significant declines in the demand for certain products, special
inventory reserves were established in 2002. The following table details the
utilization of these reserves by segment through December 31, 2003:

The inventory sold through December 31, 2003 and 2002 has generated pretax
profits of approximately $0.05 million and $1.2 million, respectively.

9. LINES OF CREDIT AND DEBT

On September 8, 2004, the Company entered into a $600 million five-year
unsecured revolving credit facility with a syndicate of fifteen banks. The
Credit Agreement replaced an existing 364-day credit facility and a 3-year
credit facility in the same aggregate principal amount and on substantially the
same terms and is intended to be used primarily as liquidity back-up for the
Company's commercial paper program. As described above, the Credit Agreement has
a five-year term, whereas the prior facilities had respective terms of 364 days
and three years and would otherwise have expired in October 2004 and October
2005, respectively. The Company has not drawn down any loan under the Credit
Agreement, and does not anticipate doing so, and as of December 31, 2004, had
commercial paper outstanding in the principal amount of $65 million.

At the Company's election, loans under the Credit Agreement will bear
interest at a Eurodollar or alternative currency rate based on LIBOR, plus an
applicable margin ranging from 0.19% to 0.60% (subject to adjustment based on
the rating accorded the Company's senior unsecured debt by S&P and Moody's), or
at a base rate pursuant to a formula defined in the Credit Agreement. In
addition, the Company will pay a facility fee and a utilization fee in certain
circumstances as described in the Credit Agreement. The Credit Agreement imposes
various restrictions on the Company that are substantially identical to those in
the replaced facilities. Among other things, the Credit Agreement generally
requires the Company to maintain an interest coverage ratio of EBITDA to
consolidated net interest expense of not less than 3.5 to 1. The Company is and
has been in compliance with this covenant and the ratio was 12.6 to 1 as of
December 31, 2004, and 9.4 to 1 as of December 31, 2003.

The Company established a Canadian Credit Facility in November of 2002 with
the Bank of Nova Scotia. Under the terms of this Credit Agreement, the Company
has a Canadian (CAD) $30 million bank credit availability and has the option to
borrow in either Canadian Dollars or U.S. Dollars (USD). The outstanding
borrowings at year-end under this facility were approximately $21 million (CAD)
in 2004 and $17 million denominated in USD in 2003. The covenants and interest
rates under this facility match those of the primary $600 million revolving
credit facility. The Canadian Credit Facility was renewed for an additional year
prior to its expiration date of November 25, 2004, and now expires on November
22, 2005. The Company intends to replace the Canadian Credit Facility on or
before its expiration date. The primary purpose of this agreement is to
facilitate borrowings in Canada for efficient cash and tax planning.

Notes payable shown on the consolidated balance sheets for 2004 principally
represented commercial paper issued in the U.S. with those shown for 2003
primarily representing short-term borrowings at a foreign

69

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subsidiary. The weighted average interest for short-term borrowings for the
years 2004 and 2003 was 1.3% and 1.1% respectively.

Dover's long-term debt instruments had a book value of $1,005.7 million on
December 31, 2004 and a fair value of approximately $1,093.0 million. On
December 31, 2003, the Company's long-term debt instruments had a book value of
$1,007.2 million and a fair value of approximately $1,103.0 million.

A summary of the Company's long-term debt for years ended December 31:

Annual repayments of long-term debt are scheduled as follows:

The Company may, from time to time, enter into interest rate swap
agreements to manage its exposure to interest rate changes. Interest rate swaps
are agreements to exchange fixed and variable rate payments based on notional
principal amounts. As of December 31, 2004, the Company had three interest rate
swaps outstanding for a total notional amount of $150.0 million, designated as
fair value hedges of the $150.0 million 6.25% Notes due on June 1, 2008, to
exchange fixed-rate interest for variable-rate interest. There was no hedge
ineffectiveness as of December 31, 2004, and the aggregate fair value of these
interest rate swaps of $0.7 million determined through market quotation was
reported in other assets and long-term debt. During the first quarter of 2004,
Dover terminated an interest rate swap with a notional amount of $50.0 million
for an immaterial gain, which is being recognized over the remaining term of the
debt issuance. This interest rate swap was designated as a fair value hedge of
the 6.25% Notes due June 1, 2008. During the second quarter of 2004, Dover
entered into an interest rate swap with a notional amount of $50.0 million at
more favorable rates to replace the interest rate swap terminated during the
first quarter. This interest rate swap is designated as a fair value hedge of
the 6.25% Notes due June 1, 2008. The swap is designated in a foreign currency
and exchanges fixed-rate interest for variable-rate interest, which also hedges
a portion of the Company's net

70

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

investment in foreign operations. Subsequent to December 31, 2004, one interest
rate swap with a notional amount of $50.0 million was terminated with no
material impact to the Company.

10. STOCK OPTION AND PERFORMANCE INCENTIVE PROGRAM

On April 25, 1995, the stockholders approved the 1995 Incentive Stock
Option and 1995 Cash Performance Program (the "1995 Plan") to replace the 1984
Incentive Stock Option and 1984 Cash Performance Program, which expired on
January 30, 1995. Under the 1995 Plan, a maximum aggregate of 20 million shares
was reserved for grants to key personnel until January 30, 2005. The option
price could not be less than the fair market value of the stock at the time the
options were granted. The period during which these options were exercisable was
fixed by the Company's Compensation Committee at the time of grant, but could
not commence sooner than three years after the date of grant and could not
exceed ten years from the date of grant.

On April 20, 2004, the stockholders approved the Dover Corporation 2005
Equity and Cash Incentive Plan (the "2005 Plan") to replace the 1995 Plan, which
expired on January 30, 2005. Under the 2005 Plan, a maximum aggregate of 20
million shares is reserved for grants (non-qualified and incentive stock options
and restricted stock) to key personnel between February 1, 2005 and January 31,
2015, provided that no incentive stock options shall be granted under the plan
after February 11, 2014. The option price may not be less than the fair market
value of the stock at the time the options are granted. The period during which
these options are exercisable is fixed by the Company's Compensation Committee
at the time of grant, but may not commence sooner than three years after the
date of grant and may not exceed ten years from the date of grant.

Transactions in stock options (all of which are non-qualified and cliff
vest three years after grant) under these plans are summarized as follows:

71

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company also has a restricted stock program (as part of the 1995 Plan
and the 2005 Plan), under which common stock of the Company may be granted at no
cost to certain officers and key employees. In general, restrictions limit the
sale or transfer of these shares during a two or three year period, and
restrictions lapse proportionately over the two or three year period. Restricted
shares granted in 2004, 2003 and 2002 were 10,000, 6,000, and zero,
respectively.

In addition, the Company has a stock compensation plan under which
non-employee directors are granted shares of Dover's common stock each year as
their primary compensation for serving as directors. During 2004, the Company
issued an aggregate of 9,120 shares of its common stock to its eight outside
directors (after withholding an aggregate of 3,904 additional shares to satisfy
tax obligations), as partial compensation for serving as directors of the
Company during 2004. During 2003, the Company issued an aggregate of 8,750
shares of its common stock to its seven U.S. resident outside directors (after
withholding an aggregate of 3,752 additional shares to satisfy tax obligations),
and the Company issued an aggregate of 1,786 shares of its common stock to its
non-U.S. resident outside director who was not subject to U.S. withholding tax,
as partial compensation for serving as directors of the Company during 2003.

72

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. TAXES ON INCOME

Total income taxes for the years ended December 31, 2004, 2003 and 2002
were allocated as follows:

Income tax expense (benefit) is made up of the following components:

Income taxes have been based on the following components of earnings before
taxes on continuing income:

73

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The reasons for the difference between the effective rate and the U.S.
Federal income statutory rate of 35% are as follows:

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31
of each year are as follows:

74

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has loss carryovers for federal and foreign purposes as of
December 31, 2004, of $50.8 million and $243.7 million, respectively, and as of
December 31, 2003, of $24.0 and $289.4 million, respectively. The Company
expects to utilize all of the $50.8 million federal loss in the 2001 carry back
period. The entire balance of the foreign losses is available to be carried
forward, with $49.1 million of these beginning to expire during the years 2005
through 2013. The remaining $194.6 million of such losses can be carried forward
indefinitely. The Company maintains a partial valuation allowance to reduce the
deferred tax assets related to these carry forwards, as utilization of these
losses is not assured.

The Company has not provided for U.S. federal income taxes or tax benefits
on the undistributed earnings of its international subsidiaries because such
earnings are reinvested and it is currently intended that they will continue to
be reinvested indefinitely. At December 31, 2004 and 2003, the Company has not
provided federal income taxes on earnings of approximately $324.0 million and
$223.2 million, respectively, from its international subsidiaries.

On October 22, 2004, the President signed the American Jobs Creation Act of
2004 (the "Act"). The Act creates a temporary incentive for U.S. corporations to
repatriate accumulated income earned abroad by providing an 85 percent dividends
received deduction for certain dividends from controlled foreign corporations.
The deduction is subject to a number of limitations and, as of today,
uncertainty remains as to how to interpret numerous provisions in the Act.
Therefore, the Company is not yet in a position to decide whether, and to what
extent, it might repatriate foreign earnings that have not yet been remitted to
the U.S. Based on the Company's analysis to date, however, it is reasonably
possible that the Company may repatriate some amount between zero and $176.0
million, with the respective tax liability ranging from zero to $7.8 million.
The Company expects to be in a position to finalize its assessment by the third
quarter of 2005.

Dover is continuously undergoing examination of its federal income tax
returns by the Internal Revenue Service (the "IRS"). The Company and the IRS
have settled tax years through 1995. The Company expects to resolve open years
(1996-2000) in the near future, all within the amounts paid and/or reserved for
these liabilities. The IRS is currently examining the Company's 2001 and 2002
federal income tax returns. Additionally, the Company is routinely involved in
state and local income tax audits, and on occasion, foreign jurisdiction tax
audits.

12. 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

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

"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. These proceedings
primarily involve claims by private parties alleging injury arising out of use
of the Company's products, exposure to hazardous substances or patent
infringement, litigation and administrative proceedings involving employment
matters, and commercial disputes. 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 or any need for additional reserves,
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, cash
flows or competitive position of the Company.

The Company leases certain facilities and equipment under operating leases,
many of which contain renewal options. Total rental expense, net of
insignificant sublease rental income, on all operating leases was $45.7 million,
$44.7 million and $43.5 million, for 2004, 2003, and 2002, respectively.
Contingent rentals under the operating leases were not significant.

A summary of the Company's undiscounted long-term debt, commitments and
obligations as of December 31, 2004, and the years when these obligations become
due is as follows:

LONG-TERM DEBT -- Long-term debt with a book value of $1,005.7 million had
a fair value of approximately $1,093.0 million on December 31, 2004.

RENTAL COMMITMENTS -- Minimum future rental commitments under operating
leases having non-cancelable lease terms in excess of one year aggregate $147.4
million as of December 31, 2004 and are payable as shown in the obligation
table.

PURCHASE OBLIGATIONS -- The Company has non-cancelable, contractual
obligations to purchase goods or services of $82.9 million as of December 31,
2004. The Technologies segment accounts for $65.1 million of this amount as of
December 31, 2004.

CAPITAL LEASES -- The Company leases machinery and equipment under terms
which classify them as capital leases. Capital Lease Obligations for the
Industries segment and Technologies segment were $6.1 million and $1.8 million,
respectively, as of December 31, 2004.

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Warranty program claims are provided for at the time of sale. Amounts
provided for are based on historical costs and adjusted for new claims. A
reconciliation of the warranty provision is as follows:

13. EMPLOYEE BENEFIT PLANS

The Company has defined benefit and defined contribution pension plans (the
"Plans") covering substantially all employees of the Company and its domestic
and international subsidiaries. The Plans' benefits are generally based on years
of service and employee compensation. The Company's funding policy is consistent
with the funding requirements of ERISA and applicable foreign law. Dover uses a
measurement date of September 30th for its pension and other postretirement
benefit plans.

The Company is responsible for overseeing the management of the investments
of the defined benefit Plans' assets and otherwise ensuring that the Plans'
investment programs are in compliance with ERISA, other relevant legislation,
and related plan documents. Where relevant, the Company has retained several
professional investment managers to manage the Plans' assets and implement the
investment process. The investment managers, in implementing their investment
processes, have the authority and responsibility to select appropriate
investments in the asset classes specified by the terms of their applicable
prospectus or investment manager agreements with the Plans.

The primary financial objective of the Plans is to secure participant
retirement benefits. Accordingly, the key objective in the Plans' financial
management is to promote stability and, to the extent appropriate, growth in
funded status. Related and supporting financial objectives are established in
conjunction with a review of current and projected Plan financial requirements.

The assets of the Plans are invested to achieve an appropriate return for
the Plans consistent with a prudent level of risk. The asset return objective is
to achieve, as a minimum over time, the passively managed return earned by
market index funds, weighted in the proportions outlined by the asset class
exposures identified in the Plans' strategic allocation.

The Expected Return on Asset Assumption used for pension expense was
developed through analysis of historical market returns, current market
conditions, and the past experience of plan asset investments. Estimates of
future market returns by asset category are lower than actual long-term
historical returns in order to generate a conservative forecast. Overall, it is
projected that the investment of Plan assets will achieve an 8.50% net return
over time, from the asset allocation strategy.

The Company also provides, through non-qualified plans, supplemental
pension benefits in excess of qualified plan limits imposed by Federal tax law.
These plans cover officers and certain key employees and generally serve to
restore and/or enhance the combined pension amount to original benefit levels to
what they would be absent such limits. These plans are funded from the general
assets of the Company.

Dover has reflected the merger of the Warn plan into the Dover Corporation
Pension Plan, effective October 1, 2003. Dover chose to recognize this plan
merger using purchase accounting, whereby the unfunded Pension Benefit
Obligation ("PBO") as of the merger date was recognized as an accrued cost of
$13.7 million. Subsequent to the valuation date of the defined benefit plan,
Dover made an additional funding of $2.7 million

77

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

related to Warn in the fourth quarter of 2003, which was not reflected in the
funded status of the plan as of the measurement date of September 30, 2003.

During 2003, two plan amendments created an increase in the benefit
obligations of the Company's principal non-qualified supplemental pension
benefit plan. A change in early retirement factors under the supplemental
benefit plan allows for employees who are 62 and have 10 years of service with
the Company to retire with unreduced benefits between the ages of 62 and 65. The
second amendment provides partial prior service credit to executives who are
hired at or after age 40 and are eligible to participate in this plan.

The following table sets forth the components of the Company's net
periodic(expense) benefit for 2004, 2003 and 2002.

The assumptions used in determining the net periodic benefit (expense)
above were as follows:

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The funded status and resulting prepaid pension cost of U.S. defined
benefit plans (international defined benefit plans are not considered material)
for 2004 and 2003 were as follows:

Benefit payments increased in 2004 and are expected to increase further in
2005. These increases relate in part to benefits for key executives with
significant years of service.

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The assumptions used in determining the above were as follows:

The actual and target weighted-average asset allocation for benefit plans
were:

Information about the expected 2005 employer contributions is as follows:

Information about the expected future undiscounted benefit payments, which
reflect expected future service, is as follows:

Pension cost for all defined contribution and defined benefit plans was
$32.2 million for 2004, $21.2 million for 2003, and $21.5 million for 2002.

For post-retirement benefit measurement purposes, a 12% annual rate of
increase in the per capita cost of covered benefits (i.e., health care cost
trend rates) was assumed for 2004; the rates were assumed to decrease gradually
to 5.50% by the year 2012 and remain at that level thereafter. The health care
cost trend rate assumption has a significant effect on the amounts reported. For
example, increasing (decreasing) the assumed health care cost trend rates by one
percentage point in each year would increase (decrease) the accumulated
post-retirement benefit obligation as of December 31, 2004, by $1.4 million
($1.4 million) and the net post-retirement benefit cost for 2004 by
approximately $0.1 million ($0.1 million).

80

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In December 2003, the Medicare Prescription Drug Improvement and
Modernization Act of 2003 was enacted. The Act established a prescription drug
benefit under Medicare, and a federal subsidy to sponsors of retiree health care
benefit plans that provide an equivalent benefit. The Company believes it will
be entitled to a subsidy and has determined the effects of the Act were not a
significant event, and accordingly, net periodic post-retirement benefit cost
for 2004 does not reflect the effects of the Act. The benefit of the subsidy
will be factored into the 2005 costs and obligations.

The post-retirement benefit plans cover approximately 2,200 participants,
approximately 650 of which are eligible for medical benefits. The plans are
closed to new entrants.

14. INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT SEGMENTS AND
GEOGRAPHIC AREAS

Selected information by geographic regions is presented below:

Revenues are attributed to regions based on the location of the Company's
customer, which in some instances is an intermediary and not necessarily the
end-user. Long-lived assets are comprised of net property, plant and equipment;
intangible assets and goodwill, net of amortization; and other assets and
deferred charges.

The Company's operating companies are based primarily in the United States
of America and Europe. During 2004, as in prior years, the Company's businesses
were divided into four reportable segments. Dover's businesses serve thousands
of customers, none of which accounted for more than 10% of consolidated
revenues. Accordingly, it is impracticable to provide revenues from external
customers for each product and service sold by segment. Selected financial
information by market segment follows on the next page:

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DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SALES, OPERATING PROFIT AND OTHER DATA BY MARKET SEGMENT

82

DOVER CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. QUARTERLY DATA (UNAUDITED)

All quarterly and full-year periods have been restated to reflect certain
operations that were discontinued. The quarterly data presented above will not
agree to previously issued quarterly statements made as a result of this
restatement.
- ---------------

(1) Represents results from continuing operations.

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DOVER CORPORATION

SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2004, 2003, 2002

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

At the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-15e. Based upon that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures were effective to ensure that material information
required to be disclosed by the Company in the reports it files under the
Exchange Act is recorded, processed, summarized and reported within the required
time periods. During the fourth quarter of 2004, there were no changes in the
Company's internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

84

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting as such term is
defined in Exchange Act Rule 13a-15(f).

The Company's management assessed the effectiveness of the Company's
internal control over financial reporting as of December 31, 2004. In making
this assessment, the Company's management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control-Integrated Framework.

Based on its assessment under the criteria set forth in Internal
Control-Integrated Framework, management concluded that, as of December 31,
2004, the Company's internal control over financial reporting was effective to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.

Management has excluded SSE GmbH, Flexbar, Rasco, Voltronics, US
Synthetics, Corning Frequency Control, Almatec and Datamax from its assessment
of internal control over financial reporting as of December 31, 2004 because
they were acquired by the Company in purchase business combinations during 2004.
These companies are wholly-owned by the Company and their total revenues and
assets represent less than 3% and 11% of the Company's consolidated total
revenues and assets, respectively, as reflected in its financial statements for
the year ended December 31, 2004.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements and cannot provide absolute
assurance of achieving financial reporting objectives. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Management's assessment of the effectiveness of the Company's internal
control over financial reporting as of December 31, 2004 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as
stated in their report which appears herein.

ITEM 9B. OTHER INFORMATION

CERTIFICATIONS REGARDING PUBLIC DISCLOSURES AND LISTING STANDARDS

The unqualified certifications of the Chief Executive Officer and the Chief
Financial Officer required by Section 302 of the Sarbanes-Oxley Act regarding
the quality of Dover's public disclosure are filed with the Securities and
Exchange Commission as Exhibits 31.1 and 31.2 to the Annual Reports on Form 10-K
for the years ended December 31, 2004 and December 31, 2003.

In addition, the annual certification of the Chief Executive Officer
regarding compliance by the Company with the corporate governance listing
standards of the New York Stock Exchange was submitted without qualification to
the New York Stock Exchange following the April 2004 annual stockholder meeting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information with respect to the directors of the Company required to be
included pursuant to this Item 10 is included under the caption "1. Election of
Directors" in the 2005 Proxy Statement relating to the 2005 Annual Meeting of
Stockholders filed with the Securities and Exchange Commission pursuant to Rule
14a-6 under the Securities Exchange Act of 1934, as amended, and is incorporated
in this Item 10 by reference. The information with respect to the executive
officers of the Company required to be included pursuant to this Item 10 is
included under the caption "Executive Officers of the Registrant" in Part I of
this Annual Report on Form 10-K and is incorporated in this Item 10 by
reference.

The information with respect to Section 16(a) reporting compliance required
to be included in this Item 10 is included under the caption "Section 16(a)
Beneficial Ownership Reporting Compliance" in the 2005 Proxy Statement and is
incorporated in this Item 10 by reference.

85

The Company has adopted a code of ethics that applies to its chief
executive officer and senior financial officers. A copy of this code of ethics
can be found on the Company's website at www.dovercorporation.com. In the event
of any amendment to, or waiver from, the code of ethics, the Company will
publicly disclose the amendment or waiver by posting the information on its
website.

ITEM 11. EXECUTIVE COMPENSATION

The information with respect to executive compensation required to be
included pursuant to this Item 11 is included under the caption "Executive
Compensation" in the 2005 Proxy Statement and is incorporated in this Item 11 by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information regarding security ownership of certain beneficial owners
and management that is required to be included pursuant to this Item 12 is
included under the caption "Security Ownership of Certain Beneficial Owners and
Management" in the 2005 Proxy Statement and is incorporated in this Item 12 by
reference.

EQUITY COMPENSATION PLANS

The Equity Compensation Plan Table below presents information regarding the
Company's equity compensation plans at December 31, 2004:

The Company has three compensation plans under which equity securities of
the Company have been authorized for issuance and have been issued to employees
and to non-employee directors. These plans are described below. The table above
does not reflect shares eligible for issuance under the 2005 Equity and Cash
Incentive Plan, which became effective on February 1, 2005, or under the 1996
Non-Employee Directors' Stock Compensation Plan, which does not specify a
maximum number of shares issuable under it.

The 1995 Incentive Stock Option Plan and 1995 Cash Performance Program

The Company's 1995 Incentive Stock Option Plan and 1995 Cash Performance
Program (the "1995 Plan"), adopted in 1995 (replacing the 1984 Plan which
expired in January 1995), provided for stock options, restricted stock awards
and cash performance awards. The 1995 Plan expired in January 2005, but the
options listed in Column A of the table above remain outstanding under it.

The 1995 Plan was intended to promote the medium-term and long-term success
of Dover by providing salaried officers and other key employees of Dover and its
subsidiaries with medium-range and long-range inducements to remain with Dover
and to encourage them to increase their efforts to make Dover successful.
Options granted under the 1995 Plans were all designated as non-qualified stock
options.

The exercise price of options is the fair market value on the date of grant
as determined in good faith by the Compensation Committee. The Compensation
Committee determines the term of each option but in no event may an option
become exercisable sooner than the third anniversary of its grant date or be
exercised

86

more than 10 years following the grant date. No more than 600,000 shares may be
granted to a single participant in any one year. Options granted under this plan
may not be sold, transferred, hypothecated, pledged or otherwise disposed of by
any of the holders except by will or by the laws of descent and distribution
except that a holder may transfer any non-qualified option granted under this
plan to members of the holder's immediate family, or to one or more trusts for
the benefit of such family members provided that the holder does not receive any
consideration for the transfer.

The information above summarizes the material aspects of the 1995 Plan. The
rights and obligations of participants are determined by the provisions of the
plan document itself.

The 2005 Equity and Cash Incentive Plan

The Company's 2005 Equity and Cash Incentive Plan (the "2005 Plan") was
approved by the shareholders of the Company on April 20, 2004. The 2005 Plan
became effective on February 1, 2005, and replaced the 1995 Plan, which expired
on January 30, 2005, and is intended to allow the Company to continue to provide
to key personnel the types of rewards available under the 1995 Plan.
Participation in the 2005 Plan is limited to a group of salaried officers and
other key employees of Dover and its subsidiaries who are in a position to
affect materially the profitability and growth of the Company and its
subsidiaries and on whom major responsibility rests for the present and future
success of the Company. The Board of Directors and management believe that the
2005 Plan will provide these key employees with medium-range and long-range
inducements to remain with Dover and to encourage them to increase their efforts
to make Dover and its subsidiaries successful. The 2005 Plan provides for stock
option grants, and restricted stock and cash incentive awards. Options granted
under the 2005 Plan may be either non-qualified stock options or incentive stock
options within the meaning of Section 422 of the Internal Revenue Code. Options
will have a term not exceeding ten years and will become exercisable after not
less than three years. The option exercise price will be fixed by the
Compensation Committee and may be equal to or more than (but not less than) the
"fair market value" of such shares on the date the option is granted. No single
recipient may be granted options for more than 600,000 shares in any year.
Generally, stock options are not transferable, except for non-qualified options
which may be transferred to members of the holder's immediate family (or a trust
for the benefit of one or more of such family members), except that such
transferred options cannot be further transferred by the transferee during the
transferee's lifetime.

The information above summarizes material aspects of the 2005 Plan. The
rights and obligations of participants are determined by the provisions of the
plan document itself.

The 1996 Non-Employee Directors' Stock Compensation Plan

The Dover Corporation 1996 Non-Employee Directors' Stock Compensation Plan
(the "Directors' Plan"), provides the primary compensation to non-employee
directors of the Company for their service as directors. Through the end of
2002, non-employee directors were granted 2,000 shares of the Company's common
stock per year (adjusted for stock splits). If any director served for less than
a full calendar year, the number of shares granted to that director for the year
was adjusted pro rata, based on the number of calendar quarters for such year
for which he or she served as a director. The Directors' Plan was amended
effective January 1, 2003, as approved by the stockholders. As amended, it
provides for different levels of stock grants in 2003 and beyond. Directors
receive annual compensation in an amount set from time to time by the Board,
payable partly in cash and partly in common stock, subject to adjustment by the
Board of Directors of the compensation amount and allocation, and the Directors'
Plan's limitations on the maximum number of shares that may be granted to any
Director. Annual compensation for 2004 was $90,000, payable 25% in cash and 75%
in common stock, and was paid by $22,500 in cash and 1,628 shares, based on the
fair market value of common stock on November 15, 2004. On November 4, 2004, the
Board of Directors approved the recommendations of its Compensation Committee to
(1) increase the annual compensation of non-employee directors from $90,000 to
$120,000, effective January 1, 2005 and (2) decrease the percentage of such
compensation paid in stock from 75% to 60%, with a corresponding increase in the
amount of such compensation paid in cash from 25% to 40%. If any Director serves
for less than a full calendar year, the Compensation Committee will prorate the
Director's compensation for the year (including the number of
87

shares to be granted) as the Committee deems appropriate. The shares granted
under the Directors' Plan may be treasury shares or newly issued shares, but in
either case they will be listed on the New York Stock Exchange.

The information above summarizes the material aspects of the Directors'
Plan. The rights and obligations of participants are determined by the
provisions of the plan document itself.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information with respect to any reportable transaction, business
relationship or indebtedness between the Company and the beneficial owners of
more than 5% of the Common Stock, the directors or nominees for director of the
Company, the executive officers of the Company or the members of the immediate
families of such individuals that is required to be included pursuant to this
Item 13 is included under the caption "1. Election of Directors -- Directors'
Compensation" in the 2005 Proxy Statement and is incorporated in this Item 13 by
reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information set forth under the caption "Relationship with Independent
Registered Public Accounting Firm" in the 2005 Proxy Statement is incorporated
in this Item 14 by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

Financial Statements covered by the Report of Independent Registered Public
Accounting Firm:

(A) Consolidated Statements of Earnings (Losses) for the years ended
December 31, 2004, 2003 and 2002.

(B) Consolidated Balance Sheets as of December 31, 2004 and 2003.

(C) Consolidated Statements of Stockholders' Equity and Comprehensive
Earnings (Losses), for the years ended December 31, 2004, 2003, 2002.

(D) Consolidated Statements of Cash Flows for the years ended December
31, 2004, 2003 and 2002.

(E) Notes to consolidated financial statements.

(2) Financial Statement Schedule

The following financial statement schedule is included in Item No. 8 of
this report on Form 10-K:

Schedule II -- Valuation and Qualifying Accounts

All other schedules are not required and have been omitted.

(3) Not covered by the Report of Independent Registered Public Accounting
Firm:

Quarterly financial data (unaudited)

(4) See (b) below.

88

(b) Exhibits:

(3)(i) Restated Certificate of Incorporation, filed as Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q for the
Period Ended June 30, 1998 (SEC File No. 001-04018), is
incorporated by reference.

(3)(ii) Certificate of Correction to the Restated Certificate of
Incorporation dated as of January 24, 2003, filed as Exhibit
3(i) to the Company's Current Report on Form 8-K filed
February 28, 2003 (SEC File No. 001-04018), is incorporated
by reference.

(3)(iii) By-Laws of the Company, filed as Exhibit 3(ii) to the
Company's Quarterly Report on Form 10-Q for the Period Ended
September 30, 2004 (SEC File No. 001-04018), are
incorporated by reference.

(4.1) Amended and Restated Rights Agreement, dated as of November
15, 1996, between Dover Corporation and Harris Trust Company
of New York, filed as Exhibit 1 to Form 8-A/A dated November
15, 1996 (SEC File No. 001-04018), is incorporated by
reference.

(4.2) Indenture, dated as of June 8, 1998 between Dover
Corporation and The First National Bank Chicago, as Trustee,
filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed June 12, 1998 (SEC File No. 001-04018), is
incorporated by reference.

(4.3) Form of 6.25% Note due June 1, 2008 ($150,000,000 aggregate
principal amount), filed as Exhibit 4.3 to the Company's
Current Report on Form 8-K filed June 12, 1998 (SEC File No.
001-04018), is incorporated by reference

(4.4) Form of 6.65% Note due June 1, 2028 ($200,000,000 aggregate
principal amount), filed as Exhibit 4.4 to the Company's
Current Report on Form 8-K filed June 12, 1998 (SEC File No.
001-04018), is incorporated by reference.

(4.5) Form of Indenture, dated as of November 14, 1995 between the
Company and The First National Bank of Chicago, as Trustee,
relating to the 6.45% Notes due November 15, 2005 (including
the form of the note), filed as Exhibit 4 to the Company's
Registration Statement on Form S-3 (SEC File No. 33-63713),
is incorporated by reference.

(4.6) Form of 6.50% Notes due February 15, 2011 ($400,000,000
aggregate principal amount), filed as Exhibit 4.3 to the
Company's current report on Form 8-K filed February 12, 2001
(SEC File No. 001-04018), is incorporated by reference.

(4.7) Indenture, dated as of February 8, 2001 between the Company
and BankOne Trust Company, N.A., as trustee, filed as
Exhibit 4.1 to the Company's current report on Form 8-K
filed February 12, 2001 (SEC File No. 001-04018), is
incorporated by reference.

(4.8) Officers' certificate, dated February 12, 2001, pursuant to
Section 301 of the Indenture, dated as of February 8, 2001
between the Company and BankOne Trust Company N.A., as
trustee, filed as Exhibit 4.2 to the Company's current
report on Form 8-K filed February 12, 2001 (SEC File No.
001-04018), is incorporated by reference. The Company agrees
to furnish to the Securities and Exchange Commission upon
request, a copy of any instrument with respect to long-term
debt under which the total amount of securities authorized
does not exceed 10 percent of the total consolidated assets
of the Company.

(10.1) Employee Savings and Investment Plan, filed as Exhibit 99 to
Registration Statement on Form S-8 (SEC File No. 33-01419),
is incorporated by reference.*

(10.2) Amended and Restated 1996 Non-Employee Directors' Stock
Compensation Plan (Revised through January 1, 2005).*

(10.3) Executive Officer Annual Incentive Plan, included as Exhibit
A to the Proxy Statement, dated March 17, 2003 (SEC File No.
001-04018), is incorporated by reference.*

(10.4) Form of Executive Severance Agreement, filed as Exhibit 10.6
to Annual Report on Form 10-K for year ended December 31,
1998 (SEC File No. 001-04018), is incorporated by
reference.*

(10.5) 1995 Incentive Stock Option Plan and 1995 Cash Performance
Program, as amended May 6, 2004.*

(10.6) Deferred Compensation Plan, as amended as of December 31,
2001, filed as Exhibit 10 to the Company's Current Report on
Form 8-K filed February 28, 2002 (SEC File No. 001-04018),
is incorporated by reference.*

89

(10.7) 2005 Equity and Cash Incentive Plan, included as Exhibit B
to the Proxy Statement dated March 10, 2004 (SEC File No.
001-04018), is incorporated by reference.*

(10.8) Form of award grant letters for grants made under 2005
Equity and Cash Incentive Plan.*

(10.9) US $600,000,000 Five-Year Credit Agreement dated as of
September 8, 2004, filed as Exhibit 99.1 to the Company's
Current Report on Form 8-K filed September 14, 2004 (SEC
File No. 001-04018), is incorporated by reference.

(10.10) Consulting agreement dated December 8, 2004, between Dover
Corporation and Jerry W. Yochum.

(10.11) Summary of arrangement effective January 1, 2005, between
Dover Corporation and Thomas L. Reece.

(10.12) Supplemental Executive Retirement Plan (Revised through
October 13, 2004).*

(14) Dover Corporation Code of Ethics for Chief Executive Officer
and Senior Financial Officers, filed as Exhibit 14 to the
Company's Annual Report on Form 10-K for year ended December
31, 2003 (SEC File No. 001-04018) is incorporated by
reference.

(18) Letter of Preferability regarding a change in accounting
principle, filed as Exhibit 18 to the Company's Annual
Report on Form 10-K for year ended December 31, 2003 (SEC
File No. 001-04018) is incorporated by reference.

(21) Subsidiaries of Dover.

(23.1) Consent of Independent Registered Public Accounting Firm.

(24) Power of Attorney (included in signature page).

(31.1) Certification pursuant to Rule 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) of the
Securities and Exchange Act of 1934, as amended, signed and
dated by Robert G. Kuhbach.

(31.2) Certification pursuant to Rule 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) of the
Securities and Exchange Act of 1934, as amended, signed and
dated by Ronald L. Hoffman.

(32) Certification pursuant to 18 U.S.C. Section 1350, as
adopted, pursuant to section 906 of the Sarbanes-Oxley Act
of 2002 (subsections(a) and(b) of section 1350, chapter 63
of title 18, United States Code), signed and dated by Robert
G. Kuhbach and Ronald L. Hoffman.

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* Executive compensation plan or arrangement.

(d) Not applicable.

90

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form
10-K to be signed on its behalf by the undersigned thereunto duly authorized.

DOVER CORPORATION

By: /s/ RONALD L. HOFFMAN
------------------------------------
Ronald L. Hoffman
President and Chief Executive
Officer

Date: March 14, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated. Each of
the undersigned, being a director or officer of Dover Corporation (the
"Company"), hereby constitutes and appoints Ronald L. Hoffman, Robert G. Kuhbach
and Joseph W. Schmidt, and each of them (with full power to each of them to act
alone), his or her true and lawful attorney-in-fact and agent for him or her and
in his or her name, place and stead in any and all capacities, to sign the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004
under the Securities Exchange Act of 1934, as amended, and any and all
amendments thereto, and to file the same with all exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission
and any other appropriate authority, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing required and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he or
she might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may lawfully do or cause
to be done by virtue hereof.

92

EXHIBIT INDEX

(3)(i) Restated Certificate of Incorporation, filed as Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q for the
Period Ended June 30, 1998 (SEC File No. 001-04018), is
incorporated by reference.

(3)(ii) Certificate of Correction to the Restated Certificate of
Incorporation dated as of January 24, 2003, filed as Exhibit
3(i) to the Company's Current Report on Form 8-K filed
February 28, 2003 (SEC File No. 001-04018), is incorporated
by reference.

(3)(iii) By-Laws of the Company, filed as Exhibit 3(ii) to the
Company's Quarterly Report on Form 10-Q for the Period Ended
September 30, 2004 (SEC File No. 001-04018), are
incorporated by reference.

(4.1) Amended and Restated Rights Agreement, dated as of November
15, 1996, between Dover Corporation and Harris Trust Company
of New York, filed as Exhibit 1 to Form 8-A/A dated November
15, 1996 (SEC File No. 001-04018), is incorporated by
reference.

(4.2) Indenture, dated as of June 8, 1998 between Dover
Corporation and The First National Bank Chicago, as Trustee,
filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed June 12, 1998 (SEC File No. 001-04018), is
incorporated by reference.

(4.3) Form of 6.25% Note due June 1, 2008 ($150,000,000 aggregate
principal amount), filed as Exhibit 4.3 to the Company's
Current Report on Form 8-K filed June 12, 1998 (SEC File No.
001-04018), is incorporated by reference.

(4.4) Form of 6.65% Note due June 1, 2028 ($200,000,000 aggregate
principal amount), filed as Exhibit 4.4 to the Company's
Current Report on Form 8-K filed June 12, 1998 (SEC File No.
001-04018), is incorporated by reference.

(4.5) Form of Indenture, dated as of November 14, 1995 between the
Company and The First National Bank of Chicago, as Trustee,
relating to the 6.45% Notes due November 15, 2005 (including
the form of the note), filed as Exhibit 4 to the Company's
Registration Statement on Form S-3 (SEC File No. 33-63713),
is incorporated by reference.

(4.6) Form of 6.50% Notes due February 15, 2011 ($400,000,000
aggregate principal amount), filed as Exhibit 4.3 to the
Company's current report on Form 8-K filed February 12, 2001
(SEC File No. 001-04018), is incorporated by reference.

(4.7) Indenture, dated as of February 8, 2001 between the Company
and BankOne Trust Company, N.A., as trustee, filed as
Exhibit 4.1 to the Company's current report on Form 8-K
filed February 12, 2001 (SEC File No. 001-04018), is
incorporated by reference.

(4.8) Officers' certificate, dated February 12, 2001, pursuant to
Section 301 of the Indenture, dated as of February 8, 2001
between the Company and BankOne Trust Company N.A., as
trustee, filed as Exhibit 4.2 to the Company's current
report on Form 8-K filed February 12, 2001 (SEC File No.
001-04018), is incorporated by reference. The Company agrees
to furnish to the Securities and Exchange Commission upon
request, a copy of any instrument with respect to long-term
debt under which the total amount of securities authorized
does not exceed 10 percent of the total consolidated assets
of the Company.

(10.1) Employee Savings and Investment Plan, filed as Exhibit 99 to
Registration Statement on Form S-8 (SEC File No. 33-01419),
is incorporated by reference.*

(10.2) Amended and Restated 1996 Non-Employee Directors' Stock
Compensation Plan (Revised through January 1, 2005).*

(10.3) Executive Officer Annual Incentive Plan, included as Exhibit
A to the Proxy Statement, dated March 17, 2003 (SEC File No.
001-04018), is incorporated by reference.*

(10.4) Form of Executive Severance Agreement, filed as Exhibit 10.6
to Annual Report on Form 10-K for year ended December 31,
1998 (SEC File No. 001-04018), is incorporated by
reference.*

(10.5) 1995 Incentive Stock Option Plan and 1995 Cash Performance
Program, as amended May 6, 2004.*

(10.6) Deferred Compensation Plan, as amended as of December 31,
2001, filed as Exhibit 10 to the Company's Current Report on
Form 8-K filed February 28, 2002 (SEC File No. 001-04018),
is incorporated by reference.*

(10.7) 2005 Equity and Cash Incentive Plan, included as Exhibit B
to the Proxy Statement dated March 10, 2004 (SEC File No.
001-04018), is incorporated by reference.*

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* Executive compensation plan or arrangement.

(d) Not applicable.