Paul E. Goldberg – Vice President, Investor Relations Robert A. Livingston – President and Chief Executive Officer, Dover Corporation Brad M. Cerepak – Senior Vice President & Chief Financial Officer.

Jeffrey T. Sprague – Vertical Research Partners Steven Winoker – Sanford C. Bernstein & Co. Nigel Coe – Morgan Stanley & Co. LLC John G. Inch – Deutsche Bank Scott Davis – Barclays Capital Julian C. H. Mitchell – Credit Suisse Securities LLC Steve Tusa – JPMorgan Chase & Co.

Andrew Obin – Bank of America Merrill Lynch Nathan Hardie Jones – Stifel, Nicolaus & Company.

Good morning and welcome to the Third Quarter 2014 Dover Corporation Earnings Conference Call. With us today are Bob Livingston, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and CFO; and Paul Goldberg, Vice President of Investor Relations. After the speakers’ opening remarks, there will be a question-and-answer period.

(Operator Instructions) As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Mr. Paul Goldberg. Mr. Goldberg, please go ahead, sir..

Thank you, Paula. Good morning and welcome to Dover’s third quarter earnings call. Today’s call will begin with some comments from Bob and Brad on Dover’s third quarter operating and financial performance and follow with an update of our 2014 outlook. We will then open the call up for questions.

And as a courtesy, we kindly ask that you limit yourself to one question with a follow-up. Please note that our current earnings release, Form 10-Q and investor supplement and associated presentation, can be found on our website, www.dovercorporation.com.

This call will be available for playback through October 30 and the audio portion of this call will be archived on our website for 3 months. The replay telephone number is 800-585-8367. When accessing the playback, you’ll need to supply the following access code, 10369221.

Before we get started, I’d like to remind everyone that our comments today, which are intended to supplement your understanding of Dover, may contain certain forward-looking statements that are inherently subject to uncertainties.

We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our results to differ from those anticipated in any forward-looking statement. Also, we undertake no obligation to publicly update or revise any forward-looking statements except as required by law.

We would also direct your attention to our website, where considerably more information can be found. And with that, I’d like to turn the call over to Bob..

Thanks Paul. Good morning everyone and thank you for joining us for this morning’s conference call. I was pleased with our strong finish to the third quarter. As we shared with you a few weeks ago, we did have some pockets of unexpected softness in July and August. However, September business activity was quite strong and exceeded expectations.

The overall result was revenue and bookings growth at each segment. Most notably, Fluids delivered 17% growth, while Energy and Engineered Systems each grew 8%. In all, we generated 8% revenue growth and grew EPS 8%. Our 10% bookings growth, coupled with a strong September, sets us up well for the fourth quarter.

From a geographic perspective, the U.S., Europe and Asia all had solid organic growth, whereas Canada and Brazil declined year-over-year. Now let me share some specific comments on the quarter. In Energy, we continue to benefit from strong U.S.

well activity and an increased rig count, especially in our core production and drilling markets namely the Permian, Eagle Ford and Bakken basins. This activity along with double-digit Middle East growth, more than offset weakness in bearings and winches. In Engineered Systems, we achieved solid growth across both platforms.

Within Printing and Identification we saw growth in both our fast moving consumer goods and industrial markets, especially in the U.S. Also, our recent MS acquisition, which specializes in digital printing for textiles is off to a great start with Dover and contributed 9% growth to the platform.

The industrial platform also achieved strong growth, led by outstanding results in our auto-related businesses. Our Fluids segment performed well, where robust market conditions for fluid transfer products, complemented by recent acquisitions, resulted in strong revenue growth.

This growth is primarily tied to positive global retail fuming activity, along with tailwinds from emerging fluid transfer safety regulations. Our Refrigeration & Food Equipment revenue was generally solid in the third quarter, but overall results were below our expectations.

Refrigeration revenue, while positive, was impacted by the timing of shipments to a major retailer, specifically in Mexico and small store formats in the U.S. We expect to deliver the bulk of these push-outs in the fourth quarter. We have made great strides in strengthening our company in 2014.

We have completed a number of productivity initiatives across the organization and have enhanced several of our businesses via acquisition, including our recently completed Accelerated transaction. Accelerated brings ESP technology, one of the fastest growing product categories in North America Artificial Lift.

In total, we have invested roughly $800 million on acquisitions year to date. As a result, we’ve expanded our global footprint in Fluid Transfer, opened new markets for our Printing and Identification business and we have significantly broadened our product offerings in Artificial Lift.

Our acquisition pipeline is rebuilding and our near-term focus is on smaller, bolt-on targets.

Regarding the fourth quarter, we expect solid organic growth in Energy driven by North American well activity, especially in Texas and the Rockies and improved conditions in compression, continued organic growth in Engineered Systems driven by strong dynamics in our Industrial platform and global growth in our Printing and Identification, strong results in our Fluids markets primarily driven by regulatory tailwinds in Fluid Transfer, a positive retail fueling environment and continuing solid global markets for our pump businesses and a slightly stronger seasonal pattern in Refrigeration & Food Equipment segment, reflecting shipments of a very strong Q3 ending backlog.

With that, let me turn it over to Brad..

Thanks Bob. Good morning, everyone. Let’s start on Slide 3 of our presentation deck. Today we reported third quarter revenue of $2.1 billion, an increase of 8%. Organic revenue grew 4% and growth from acquisitions was also 4%. Adjusted EPS was $1.35, an increase of 8%. Segment margin for the quarter was 18.5%, 110 basis points below last year.

Adjusting for the impact of acquisitions, our overall margin was 19%. This acquisition impact was most prevalent in our Energy and Fluid segments. Bookings increased 10% over the prior year to $2 billion. This result represents growth across all segments led by 14% growth in Fluids and 11% growth in Engineered Systems.

Energy grew 9% while Refrigeration & Food Equipment posted bookings growth of 6%. Overall, book-to-bill finished at a seasonally normal 0.96. Our backlog increased significantly in the quarter, up 14% to $1.4 billion. Free cash flow was $259 million for the quarter or 12% of revenue.

For the full year, we expect free cash flow to be approximately 11% of revenue. Now turning to Slide 4. All segments showed organic growth in the quarter. Fluids grew 6% benefiting from solid Fluid Transfer and Pump markets. Energy driven by strong core U.S. drilling and production markets grew 5%.

Engineered Systems grew 4% with broad-based growth across both platforms. Refrigeration & Food Equipment was up 1%. Acquisition growth in the quarter was 4% comprised of 11% Fluids, 4% in Engineered Systems and 3% in Energy. Turning to Slide 5 and our sequential results. Revenue increased 2% from the second quarter.

Results were led by 5% growth in Energy and 4% in Fluids. Refrigeration & Food Equipment grew 1% sequentially, while Engineered Systems was essentially flat. Sequential bookings decreased 4%, representing normal seasonality. Energy driven by phase 2 of Queensland Gas Project grew 10%.

Refrigeration & Food Equipment declined 15% as shipments in Refrigeration normally slowed down in Q4. Fluids was down 6% as several large projects were booked in the previous quarter. Engineered Systems declined 4% on normal seasonality. Now on Slide 6. Energy revenue of $507 million increased 8% and earnings of $123 million were up 3% over last year.

Energy produced a solid quarter with strong revenue growth in our Drilling & Production and compression markets. This strong performance more than offset continued softness in our bearings end markets and construction related winch markets. Within Drilling & Production growth was driven by strong U.S. well activity.

The continued impressive performance of our drilling businesses and our sharply growing U.S. artificial lift business more than offset expected tough comps in Australia and a decline in Canada. The improved compression markets also helped drive solid growth.

Overall, this segment continues perform at a high level and the addition of Accelerated will only serve to broaden our market opportunities in key North American basins. Operating margin was 24.2% and included 100 basis point impact related to recent acquisitions, primarily those completed in Q2 and Q3.

Bookings were $526 million, a 9% increase over the prior year reflecting broad-based growth across the segment. Book-to-bill was 1.04. Adjusting for Queensland gas, book-to-bill was at 1.0, up 3% over an adjusted prior year. Turning to Slide 7.

Engineered Systems had another solid quarter were revenue of $695 million was up 8% and earnings of a $119 million increased 7%. Our Printing & Identification platform revenue increased 13% to $291 million, driven by organic growth of 4% and recent acquisitions, primarily MS Printing. Of note, U.S.

results for Markem-Imaje were extremely strong, up double-digits. In the industrial platform, revenue grew 5% to $405 million, all of which was organic. Our auto related businesses were particularly strong in this platform. Margin was solid at 17.2% as the benefits of productivity mostly offset the effective business mix.

Bookings were $667 million, an increase of 11%, our Printing & Identification bookings increased 10% to $281 million boosted by recent acquisition and continued solid activity in our core fast moving consumer goods markets, especially in the U.S. Industrial bookings increased 12% to $386 million reflecting broad-based growth.

Book-to-bill for Printing & Identification was 0.97, while industrial was 0.95. Overall, book-to-bill was 0.96. Now, moving to Slide 8. Fluids posted a strong quarter were revenue increased 17% to $362 million and earnings of $68 million were up 7%. Revenue was driven by organic growth of 6% and acquisition growth of 11%.

Our Fluid Transfer businesses benefited from strong demand in the global retail fueling markets, increasing safety regulations in Fluid Transfer and share gains. Pumps was driven by strong North American growth and new product introductions.

Segment margin was 18.7%, a decrease of 170 basis points from the prior year, primarily reflecting the impact of acquisitions. Bookings were $351 million, an increase of 14% driven by Fluid Transfer; book-to-bill was 0.97. Now, let’s turn to Slide 9. Refrigeration & Food Equipment generated revenue of $529 million, up 1% over the prior year.

Earnings of $78 million decreased 10%. Solid growth in refrigeration was partially offset by declines in food equipment; particularly at Belvac where project shipments can vary from quarter-to-quarter. Refrigeration growth of 3% was dampened by push outs from a major customer. Overall, refrigeration is well-positioned to finish the year strong.

backlog is up $52 million, or 16% over the prior year, and September was the largest revenue month ever for Hill Phoenix. Operating margin was 14.8%, a 180 basis point decline from last year. this result largely reflects unanticipated supply chain costs, inefficiencies connected with customer push outs and customer mix.

Bookings were solid at $459 million, an increase of 6% principally reflecting solid demand for refrigeration products. Book-to-bill was at a seasonally strong 0.87. Going to the overview on the Slide 10. third quarter net interest expense was $31 million, up $1 million from last year and in line with our forecasts.

Corporate expense was $28 million, a decrease of $5 million and generally consistent with expectations. Our third quarter tax rate was 30.8%, excluding $0.03 of discrete benefits. Capital expenditures were $35 million in the quarter. we expect Q4 to be higher as we continue to execute on several projects.

Lastly, we repurchased 1.2 million shares for $100 million since the end of the second quarter. 856,000 of these were settled in Q3. Year-to-date, we have repurchased 5.1 million shares for $418 million. Moving to Slide 11, which shows our full-year guidance. We expect organic revenue growth to be approximately 4%.

our forecast for energy is 4% to 5% growth; likewise, we also expect Engineered Systems revenue to grow 4% to 5%. Fluids organic revenue growth is forecast at 5% to 6%, while refrigeration and food equipment is expected to have approximately 1% organic growth.

Completed acquisitions will now add 4%, up one point from our prior expectations, reflecting recent acquisitions, including Accelerated. In total, we expect full-year revenue growth to be approximately 8%. Segment margin is expected to be between 17.5% and 18%, including roughly a 70 basis point impact from completed acquisitions.

Corporate expense will now be approximately $120 million, $5 million below our prior forecast representing cost management activities. Interest expense should be about $130 million, $3 million below our prior expectations. Our full year tax rate is estimated to be near 31%.

CapEx should be about 2.3% of revenue, slightly below our prior forecast, and free cash flow is expected to be approximately 11% of revenue. Turning to the bridge on Slide 12. We now see volume, price, and mix contributing $0.26 to $0.29. Productivity will have $0.16 to $0.18, while investment and compensation will have $0.16 to $0.18 impact.

Acquisitions in aggregate will now be essentially neutral for the year. This includes the current year dilutive impact of deals already closed in the third and fourth quarters. Corporate provides a $0.04 benefit at the high-end of our prior forecast, while interest shares and taxes contribute $0.13 to $0.14, $0.04 above our prior expectations.

In total, we now expect 2014 EPS to be $4.75 to $4.80, reflecting a $0.05 reduction to the high-end of our prior guidance largely driven by the impact of recent acquisitions. This represents 10% growth at the mid-point. With that I’ll turn it back over to Bob for some final thoughts..

Thanks Brad. Overall, I’m pleased with our performance especially our strong September. We delivered solid revenue and earnings growth and also saw strong quarter activity. Looking forward, I believe we’re well positioned for continued success based on our products, technologies, and competitive positions. Within energy, we expect our U.S.

activity to remain solid given the basins we participate in and expect our global growth initiatives to continue to yield opportunities. We are enthusiastic about our recent accelerated deal.

The technology accelerated brings to our portfolio, combined with our existing rod lift products allows us to offer customers artificial lift solutions earlier and for the complete life of their wells. All of these factors positioned us very well with our customers.

In Engineered Systems, growing global applications for our Printing & Identification technology including the emerging digital textile market and the increasing awareness around food safety provides ample opportunities for expansion.

Within our industrial markets, our customers’ desire for productivity solutions along with a strong market or our auto-related businesses offer significant growth prospects. Within Fluids, increasing regulations regarding vapor recovery and the safe transport of chemicals and fuels provides a strong business climate for our Fluid Transfer businesses.

Additionally, our Pumps business is benefiting from generally solid markets, particularly in North America and the Middle East, as well as the introduction of new products. And finally, in Refrigeration & Food Equipment we continue to focus on the ongoing needs of our customers for productivity and sustainable solutions.

In addition, the regulatory environment is providing tailwinds with regard to energy efficiency standards, which plays to the strength of our product portfolio. In closing, I’d like to thank our entire Dover team for their continued focus on serving our customers and driving results. With that, Paul, let’s take some questions..

Thanks Bob. At this point, I’d just like to remind everyone if you can limit yourself to one question with a follow-up, we would greatly appreciate it. And with that, Paula, if we can have the first question..

Thank you. Our first question comes from Jeff Sprague of Vertical Research. .

Thank you. Good morning, everyone..

Hi, Jeff. Good morning..

Hi.

How are you doing?.

Great..

Just on Energy, Bob. There is a little bit of commentary in the queue about margin pressure around cost.

It was not clear to me if that was really just kind of some cost plus inflation or there’s a negative comment embedded around price as part of that? Could you just kind of give us a little color on what’s going on with price and cost in Energy?.

Yes. I would say it’s a little of both, Jeff, and within Energy, it would be specific to Artificial Lift. Our steel costs were up. I think the incremental cost in the third quarter versus a year ago, steel costs were up about $5 million. That’s it, but it was still up. With respect to pricing, I think we’ve commented on this a couple of times this year.

The Canadian market has been soft and we have seen price pressure especially on rods. In fact, I would probably say exclusive to rods, both in Canada and maybe a little bit even in the Bakken basin, but it is restricted to that..

And then, just thinking about the pre-announcement, Bob. You guided an $0.08 miss, right. That’s very precise, it wasn’t $0.05 to $0.10, it was – that was $0.08.

What really happened at the end of the quarter? And maybe a little color at how September ended and what you’re seeing here on the early part of October, if you have any other color?.

Okay. So Brad, the $0.08 miss I think was split between I would call it three buckets. We anticipated a $0.03 miss in refrigeration. We were anticipating a $0.03 short fall in energy, and the balance of the $0.02 was really around increased deal cost in the third quarter that had not been anticipated as we open the quarter.

Jeff, we had the $0.02 deal cost for sure and the $0.03 anticipated miss at refrigeration, my friend, we delivered that miss. The $0.03 anticipated miss on energy. I will stand up and give kudos to all of the units in the leadership teams within energy that gap was closed and I did it remarkably so in the final three weeks of the quarter.

And I think based upon what we were looking at in mid-month. I think energy performed a bit better like $0.02 in September than we had anticipated.

Any other color left Brad?.

I guess the other $0.01 which is missing in that reconciliation is a little bit better corporate based on our cost controls Jeff..

And then just a quick one and I will move on.

Brad, can you give us the organic bookings in general and energy specifically?.

Oh, boy, I don’t think I had that data in hand right now. I will ask Paul to follow-up with you on that..

Yes, give it to the entire group.

All right, great. Thank you..

Your next question comes from Steven Winoker of Bernstein Research..

Thanks and good morning all..

Good morning..

Good morning..

I would be help to continue get a little more color on the energy business but just in light of the overall macro concerns that are out there and your particular exposure at the basin level, what you’re hearing from customers, I mean are typically allow these customers or folks who spend what they make.

And just how you’re looking at that business over the short to medium-term?.

Well, my comments Steve would be restricted to what we’re seeing right now and our anticipation for the fourth quarter. There is enough noise that I am certainly right now and that I think I would reserve any comments to the beginning of the year of 2015 to perhaps our Dover Day Conference.

If you want to know where are the – where our primary activity is in the basins, Permian by far is the largest basin for us, the second largest basin would be Eagle Ford, and the third would be the Bakken. And I would say that in a relationship comparison, Permian may be five times the activity versus what we see in the Bakken.

With respect to what we’re hearing for customers, the guys are talking to them weekly, the last – over the last couple of weeks, I would tell you they’re talking to them almost every day.

Their customers are really engaged in looking at their capital budgeting and planning for 2015, we’re not hearing any input from them right now, other than they are looking at it. With respect to the fourth quarter here in 2014, we have been watching our order rates everyday for the past, I would say, three weeks, if not four weeks.

If we were to see a bit of a pullback, or an early sign, it would be in our drilling businesses. we haven’t seen it all. In fact the order rates, the average daily order rates in the first couple of weeks in October were at or absolutely above the third quarter average daily rate.

We see no cancellations, no deferrals and we feel pretty confident sitting here today about our expectations for the fourth quarter in energy. .

And in that team, the energy team that was able to close the gap in the last few weeks that you commended.

Was that gap closing just on it, was it on operating expense, I mean, how do they actually do it?.

No, I would say it was primarily driven by revenue and volume, and it was one business that was across the board. We had a little bit better volume as order rates picked up in the last couple of weeks of the month. We had a little bit better volume in our drilling business, and we continued to see strong activity in the U.S. market for artificial lift.

artificial lift in the U.S. finished stronger in September than we had anticipated even at the middle of the month..

Okay. thanks, I’ll pass it on. appreciate it. .

Thanks. .

Thanks. .

Your next question comes from Nigel Coe of Morgan Stanley. .

Thanks. good morning, guys..

Good morning, Nigel. .

.

.

There are two different responses.

In refrigeration, Nigel, to be quite direct about it, the problem in refrigeration, number one, I will tell you the number was about $8 million in refrigeration and I would label it primarily – well, I’ll take the blame for this, it was primarily self-inflicted, it was around some unanticipated hiccups and cost we have with some supply chain changes we were making as we exited the second quarter.

Within energy, there was as we were looking at booking rates and especially in August, there was a growing concern that that month of September would not have the growth and the U.S. artificial lift activity that we ended up same. Let me tell you what the growth was for the third quarter.

I mean, we had a fairly healthy expectation for artificial lift in the third quarter, but I think artificial lift in the third quarter year-over-year I think we were up 16%. We came into September and felt that that growth rate was probably going to fall a couple of points shy of that, as it turns out, the gap was closed pretty quickly..

Well, that’s helpful, thanks.

And then the pace of buybacks has picked up in the early 4Q and I am just wondering Bob and Brad how you know the kind of the dynamic and math between buybacks that $72 as opposed to $90 compared to M&A right now?.

Okay, well, I would rather buyback at $72 than $93. I’m not sure that – okay, Nigel we completed the $1 billion share buyback program as we exited and completed the first quarter. I think in the second quarter and the third quarter, it was a total of about $100 million of share repurchase activity with a bulk of that in the quarter three.

We had as we sat and discussed, looked at share repurchase activity in July for the second half of the year. We knew we had some M&A activity that we were very hopeful on closing on in the second half and we did. I would also tell you we walked away from a couple of deals here recently were the pricing sort of gap beyond our comfort range.

I sit here today at $72. It sure deserves another topic, round of discussion with Brad and myself. I would also tell you that the balance of the fourth quarter and I would even say our visibility into the first quarter of 2015 – M&A activity is going to be very, very light. If we do anything there’s going to be rather small deals.

And the cash flow that we’ll generate here in the fourth quarter coupled with our existing share price, this is going to get some serious discussion with Brad and myself over the next couple of weeks..

Okay.

So it sounds like you’ve pretty much done on the M&A for the rest this year?.

I would say if we do anything it will be too small to even announce..

Okay. Well, thanks, Bob..

Thanks..

Your next question comes from John Inch at Deutsche Bank..

Good morning, everyone. .

Hi, John..

Good morning, John. .

Bob, you’ve been through these energy downturns or swings before and I think your performances really, I mean, it really stands out. What I’m trying to understand is sort of connecting the dots between low price of oil, well appears to be pretty meaningful rising competition in North America, perhaps for some of your own businesses.

What’s the playbook here in terms of the steps you would take in anticipating and then reacting to perhaps a meaningful scale back from your customers who, I understand are already sort of planning CapEx for next year now. So they’re sort of doing that against the backdrop of pretty low oil prices.

And just any color you could have based on your experience would be helpful and how you’re thinking about those..

Well, we’ll refer back. As you mentioned, we’ve been through this before.

It seems like a long time ago, but it was in the first half of 2009 and the business leaders, the segment leadership team has the ability to take cost out just about as quickly as we did in the first part of 2009, especially in our Artificial Lift business as well as in our drilling businesses.

I would enable it, from a cost takeout point, we an attractive relationship between variable cost and fixed cost and we can pull the trigger pretty quickly in that area. John, for you and for the others, let me sort of put this in perspective for you. So the Energy segment, rough number. It’s a $2 billion revenue segment.

We’ve got about $500 million in revenue and what I would label as our bearings and compression part of the business, not directly connected to rig count, or the drilling activity per se. Within drilling, or which is, and we’ve recognized this. Our drilling activity is highly correlated to rig count.

I would say, it’s $450 million to $500 million in revenue. And then that would leave our artificial lift business activity, which is roughly $1 billion. And of that $1 billion, about 20% of it is non-North American activity, but 20% of it is – we will label it as automation.

And it has much less to do with drilling activity and much more around offering productivity solutions and tool sets for our customers to optimize the cash flow and the profitability of individual wells and fields.

So that needs about 60%, or about $600 million, of this $1 billion artificial lift business, around what I’d call pure artificial lift tools equipment. In that 60%, rough number, rough split about 50% of it is after-market. More so on pumps than it is on rides, but about a 50% split to after-market and about 50% to new installations.

So if we were to continue to see a precipitous decline in the price of oil, I think what we’re going to see it first, we’re going to be watching rig counts. And we see a decline in rig counts. We’re going to see it very quickly in our drilling business. And I’m talking global numbers here. We’re going to watch it pretty closely.

We have not seen that yet, John. With respect to new installation and artificial lift, yes, a decrease in deployed rig counts will eventually show up in artificial lift numbers.

We are still depending and we’ve seen this in the past, in 2009 that, that decline would start to be measured and felt, five, six, eight months after you see the beginning decline in rig counts. And I hope that gives you a little bit of detail and how we’re looking at it..

That’s actually really helpful, and Bob, you mentioned that 20% automation, maybe given the constructive declining oil price is clearly one of the ways you keep these wells flowing is to make them more productive. Does this perhaps advance your own....

Yes, John that has been the clear strategic decision we’ve made over the last five years, since the last downturn is to recognize that the automation capability that we could offer and we have grown that offering both organically as well as M&A over the last three or four years that that automation as well as our decision to expand and grow outside of North America, we think mitigates against the short decline that we saw in 2009 in this segment..

Yes, now I just wondering if maybe you could even make a bigger splash through software control automation M&A other than in the U.S., Canada or overseas and just in responding to the environment perhaps?.

Okay, and I would tell you that there is nothing upsize that we have in our near-term pipeline, but the two or three that we have some interest in that we would look at and hope to close maybe in the next few months or in that area, John..

Thank you very much..

Your next question comes from Scott Davis of Barclays..

Hi, good morning guys..

Hi, Scott..

This accelerated deal, I mean, it’s just a great asset people would know in the industry speak very highly of it. But is there any risk that you guys top tick this thing I mean that if indeed we do see a major breakdown in oil prices and artificial lift comes out of favor for a bit.

Is there any sort of MAC clause in this that would allow you guys to adjust price down or at least protect yourselves if things do get ugly out there?.

Even if things get ugly I don’t think it would qualify as a MAC clause, Scott. But the real answer is we now own it and there is no price adjustment..

Okay, okay fair enough. And then I was a little bit surprised….

And by the way Scott, I was actually happy and pleased with the price we were able to deliver to Dover and to our shareholders….

No, it’s not expensive. I’m just – it’s expensive if EBITDA gets cut in half, but it’s not expensive on current numbers. So my follow on is that it’s a little bit surprised to hear you say Bob that you’re more focused on smaller deals.

And I only really raise that just because when you do see I think many companies like yours have been waiting for a pullback like this to shake assets free and get sellers of the sidelines and such.

I mean is in this the exact type of opportunity where companies like Dover really can step in and provide liquidity into a market that starts to need it?.

No, you’re exactly right, but don’t overlook the comment I shared earlier, I said near-term..

Okay..

when you look at what’s in our pipeline that we could conceivably close on here in the fourth quarter, or in the first quarter of next year on labeling those deals that we have touched points on today is being small bolt-ons.

The comment you make Scott is very, very appropriate and it’s something that we talk about a lot even here in, especially here in the last two or three weeks is we see a correction like this that we believe this does give us an opportunity, but Scott for privately-owned businesses, I would tell you that there probably is at least a six-month lag on valuation set points and expectations of privately-owned businesses relative to a turning point in the public market..

I think that it gets back to the Bob’s point that we walked away from; in the third quarter, two what I would characterize is mid-sized deals. .

Similar to the size of accelerated do specifically to valuations..

Right.

and were those assets of Bob or somebody else or were they – they tabled?.

No, I think one specifically that was the size of, or if not a bit larger than accelerated. we believe that there was an agreement signed, but we don’t know..

Okay..

We don’t have any other detail. .

Yes. I would just imagine there is….

It truly hasn’t closed yet..

Yes. as we said, there might be some private buyers, they thought that they could get financing three weeks ago may have a little bit of a tougher time now, so….

Yes..

Okay. Well that’s great color. thanks, guys. good luck..

Thank you..

(Operator Instructions) Your next question comes from the line of Julian Mitchell of Credit Suisse..

Hi, thanks..

Hi, Julian..

Hi..

Good morning Julian..

Good morning. Just on the fluids business within pumps, we had just under 3% organic sales growth, and one or two other companies have been out there.

even today, talking about weak pump bookings, so just wondered how you’re seeing that market right now?.

Okay. it’s interesting, first off, I would – with specific response to your question on bookings, we have not seen a slowdown in order rates, and what I would label the core business, which we look at every – sort of look at weekly and track it pretty tightly.

For us, the noise and I’d call it in our up and down activity around order rates, as well as revenue has been more around the project business that we have seen here with the mag acquisition we made a couple of years ago and the Fender acquisition that we closed on about this time last year.

but if you look at our core business, what I’d call the core pumps, the Pump Solutions Group business, it’s actually been pretty steady, and even if you back out fender and mag for this year, the growth has been much more consistent than we would have shown on the top line for our Pumps Solutions Group business in total.

The North America business has continued to be quite solid, in fact our – I think our sales through distributors and North America has been up double digits this year. we have seen that continuing in the second half. We think we’re in a very good product and competitive position here..

Thanks. and then within refrigeration & food equipment, you’re going to split out the three different factors behind the 180 basis point margin decline in Q3.

how do you see those three factors kind of changing into Q4, and how quickly should we think that margin can come back?.

Well, if I had the same revenue level in Q4 as we had in Q3, you’d see the margin come back.

the biggest, I would call it almost an embarrassment that we dealt with in refrigeration in the third quarter were the issues around supply chain and logistics, and as I commented earlier actually, I sort of do a mea culpa here and that was sort of self-inflected, I would also tell you that issue was behind us, it was, as we went through the month of September, we feel like that problem was corrected.

and by the way, it was corrected well enough that we had a record revenue month at Hill Phoenix in the month of September.

A part of the issue, as I commented earlier was some push outs, I would just call it noise around scheduling that was itself inflected that we were having to deal with and that created quite a bit of labor inefficiency and scheduling inefficiencies in July and August particularly July and August.

We’ve got a very strong, I’m not sure if it’s a record backlog or not, it very well may be, but we’ve had a very strong backlog at Hill Phoenix as we exit quarter three and the bulk of – a significant amount of our activity for Hill Phoenix for the fourth quarter is actually being delivered and earned in October.

And as we sit here a little past mid month, the push outs from October to the early part of November have been minimal..

Good, great..

Let me just add a thought here as you’re asking about margins and bringing into Q4. One thing I do want to point out as we mentioned before is that our energy, I know we’re talking refrigeration right now, but our energy margins in Q4 will be impacted quite significantly by the accelerated deal.

And so while you see very solid margins in Q3 that core margin expectation remains, what we will see as an impact of almost let’s say 450 basis points to 500 basis points impact to energy in the fourth quarter due to purchase accounting and the rollover in essence of the inventory through the P&L..

Great, thank you..

Your next question comes from Steve Tusav of J.P. Morgan.

Hey good morning..

Hi, Steve..

Good morning..

Can you maybe just talk about the price cost dynamics that you’ve seen over the last couple of years in energy, I mean, what’s kind of the annual pricing that you’re getting in that business or that you’ve gotten historically in that business in the last several years?.

Brad, help me on this one….

I mean the material or is it – I mean is it….

I would say it was more material in 2010 and in 2011 Steve than it was in 2012, 2013 and 2014. Now, we’ve had a little bit. We see this not just an energy we see this across the board and over. We do always look for opportunities to be a little bit more smart or strategic in our pricing.

I would say that the pricing contribution for Dover in total has been close to but perhaps a bit less in 2014 than it was in 2012 and 2013, but it has still been positive..

So kind of like below like – around flat but up a little bit 10, 20 bps something like that?.

I would say 20 bps….

I would use 10 bps to 20 bps, but you started off by asking about energy and I’m going to repeat myself if you don’t mind. We have been dealing with this now for almost a year. It has been something I think I’ve pointed out in the April call.

I know I did in the July call and I did again today that in Canada and to a lesser degree in the Bakken basin, we have dealt with price pressure, especially around rods..

And what kind is that double-digit or is it not much that?.

No. I would say low-to-mid single digit. .

Okay. And then just on refrigeration, the fourth quarter is pretty self-explanatory I guess Wal-Mart was out at their Investor Day talking about shifting their priorities to spend more on e-commerce and kind of limit the spending on their stores.

I mean is there – how does the business look beyond kind of this catch up in the fourth quarter? How are you guys feeling about just the trends in refrigeration spend into 2015?.

We saw the announcement, in fact I would tell you that it was news to us. We’ve seen that in some of the discussions we’ve had with Wal-Mart in the last 30 to 60 days. I think their comments that they shared, Steve, with respect to store activity, number one, was new store construction, and number two, it was new store construction in the U.S.

We fully expect Wal-Mart to continue with a pretty healthy remodel program in 2015 and based upon everything we are seeing and hearing, seeing we’ve actually got some orders on the books and we’ve been told there are more coming that their new store construction and remodel activity outside of the U.S. continues to be pretty healthy next year..

Okay, great. Thanks a lot..

Thanks..

Your next question comes from Andrew Obin of Merrill Lynch..

Hi, yes, good morning. .

Good morning, Andrew..

Good morning..

Just couple of questions.

Can you clarify the weakness in bearings, because given your comments on the strength of the Energy cycle so far, it’s just a little bit surprising to reconcile it?.

Yes. It’s all around compression activity.

And I would – I have to start with a little bit of a revisit perhaps even into the some data we shared and some announcements we saw from some of our customers, as well as some CapEx announcements that were made earlier in the year by some of the larger E&P operators that with and I guess we started to see this late in the first quarter and going into the second quarter, where there was much more of a focus by the big guys in the oil patch to improve their cash flow.

And there was some deferment and perhaps even some cancellation of projects. Not that we saw the cancellation. We actually saw some customer cancelling projects in areas outside of North America. And for us, it’s around – that bearing activity is around the gas turbine for pipeline and transmission activity.

We do believe that we’ve passed the bottom on that. We’ll see how this one unfolds over the next quarter or two. But we saw in all three, maybe even four of the OEMs that we support with our bearing business, especially GE and Siemens..

And can you also comment on Printing & ID, because one of your competitors has also made positive comments about it. I’m just surprised by the organic growth given all the headlines. .

Organic growth where?.

Printing & ID, Markem-Imaje, specifically North America. Particularly you’ve highlighted consumer strength in the U.S.

Could you just comment where that is coming from?.

Well, you’re right. We did have pretty strong growth in the U.S. in the third quarter, but I would also point out that it probably stood alone in the third quarter with respect to regional growth rates at MI. But the growth – we’ve actually been experiencing good growth in the U.S.

market for – gosh, Brad, 18 months now?.

Yes. .

At least 18 months. We commented on that here in our script because it sort of stood alone. Europe was fairly solid, but not like we saw here in the U.S. China, I sort of labeled as okay, but again, not like we saw here in the U.S. It was fairly broad-based in the U.S., both consumables as well as equipment.

And I would also say we were pleased with capturing a couple of new customers in the third quarter..

Would you attribute most of the strong performance to Dover specific events or do you think it’s just broader markets? They’re just chugging along quite nicely?.

Well, I think the market is performing quite nicely. But I’d like to think we over performed the market. .

Terrific. Thank you very much. .

We have time for one more question. Your final question comes from Nathan Jones of Stifel..

Good morning, Bob, Brad, Paul.

Good morning..

Good morning..

Just want to follow up on a couple things Julian was asking about earlier on. You talked about within the pump business some noise, I think, you called it, on project activity at Mag and Fender.

Can you may be give some more color on that, what you’re seeing out there in the market at the moment and what demand trends look like for you?.

Okay well, I think, two different businesses in two different applications and I call it verticals. Mag is mostly, most of their play is in the chemical and plastics vertical and Fender is mostly in the oil and gas vertical, and even there, I would tell you that most of – almost all of the Fender’s activity is outside of the U.S. market.

That still remains an opportunity for us. I don’t have the detail by quarter on how each of those two businesses have shown on their booking trajectory. Just because of the nature of the business and it’s probably little bit more lumpy at Fender than it is at Maag.

But nature of their business does include a fair amount of project activity and a project award. And second quarter may result in organic bookings growth, or bookings growth of 20% over booked over the previous year. And the lack of that project award in the third quarter may result in negative bookings growth when you compare it year-over-year.

When you look at it over longer periods of time, the growth at Fender, my goodness, has been – is the business up 50% since we acquired the business two years ago. I mean that may be the magnitude of the growth we’ve seen at Maag. What I call the two and half years that we’ve owned the business.

And Fender, we’ve owned for a little less than a year and this year has been a year of consolidation and on-boarding of Fender. I think you’ll some growth in Fender next year..

But in term of….

It is a ramped project activity..

Yes, in terms of maybe RFPs or something like that, you haven’t seen any meaningful change in activity..

Well I’m not sure I can even answer that with respect to Fender, it is one of the smaller businesses within PSG. And quite frankly I probably don’t pay as much attention to those order rates as I should. I do pay much more attention to Maag just because of its size.

And the RFP activity, like I was just speaking last week to the gentleman who runs the business and that customer activity, the RFP activity, is quite strong..

Great. Thanks.

And you also mentioned that Brazil was pretty weak in the quarter, any color you can give on that?.

Yeah, Brazil was ugly..

Any outlook for when that might change?.

No, it’s ugly and….

It’s very smaller for us..

It’s small..

I am not even sure what our revenue base..

It’s less than $100 million for Dover, but I know sitting here today it’s going to be difficult for us to anticipate or project any growth in Brazil for next year or at least I don’t want to, but in the third quarter our decline in revenue in the third quarter I think was well over 14% in Brazil..

And again, I will use the word ugly and I think Paul is about right to chock me and tell me we are out of time..

All right. Thanks a lot for your time..

Thank you..

Thank you..

Thank you. That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Goldberg for closing remarks..

Thank you, Paula. This concludes our conference call. We thank you as always for your continued interest in Dover and we look forward to speaking to you in January to go over the full year results. Have a good day..

Thank you. That concludes today’s third quarter 2014 conference call..