10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

OR

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

For the transition period from                      to                     

Commission File Number: 1-13215

GARDNER DENVER, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 76-0419383
(I.R.S. Employer
Identification No.)

1500 Liberty Ridge Drive, Suite 3000
Wayne, Pennsylvania 19087
(Address of principal executive offices and Zip Code)

(610) 249-2000
(Registrant’s telephone number, including area code)

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 90 days. Yes þ No o

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 52,326,949 shares of Common Stock, par value $0.01 per share, as of July 29, 2011.

GARDNER DENVER, INC.
Table of Contents

	Page
PART I — FINANCIAL INFORMATION
Item 1 Financial Statements		3
Condensed Consolidated Statements of Operations		3
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 3 Quantitative and Qualitative Disclosures About Market Risk		39
Item 4 Controls and Procedures		41
PART II — OTHER INFORMATION
Item 1 Legal Proceedings		42
Item 1A Risk Factors		42
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 5 Other Information		42
Item 6 Exhibits		43
SIGNATURES		44
INDEX TO EXHIBITS		45
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

GARDNER DENVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011			2010
Revenues	$	610,693	$	449,519		$	1,142,546		$	871,683
Cost of sales		400,425		297,919			747,822			586,276
Gross profit		210,268		151,600			394,724			285,407
Selling and administrative expenses		105,009		91,745			201,030			179,439
Other operating expense, net		6,087		3,268			7,699			1,917
Operating income		99,172		56,587			185,995			104,051
Interest expense		3,934		6,062			9,281			12,178
Other expense (income), net		279		(2	)		(683	)		(637	)
Income before income taxes		94,959		50,527			177,397			92,510
Provision for income taxes		27,263		12,603			49,802			22,333
Net income		67,696		37,924			127,595			70,177
Less: Net income attributable to noncontrolling interests		575		590			996			885
Net income attributable to Gardner Denver	$	67,121	$	37,334		$	126,599		$	69,292
Net earnings per share attributable to Gardner Denver common stockholders
Basic earnings per share	$	1.28	$	0.71		$	2.42		$	1.33
Diluted earnings per share	$	1.27	$	0.71		$	2.40		$	1.31
Cash dividends declared per common share	$	0.05	$	0.05		$	0.10		$	0.10

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

GARDNER DENVER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)

	June 30,			December 31,
	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	121,347		$	157,029
Accounts receivable (net of allowance of $12,052 at June 30, 2011 and $11,531 at December 31, 2010)		445,812			369,860
Inventories, net		299,470			241,485
Deferred income taxes		34,053			34,628
Other current assets		31,719			25,535
Total current assets		932,401			828,537
Property, plant and equipment (net of accumulated depreciation of $362,198 at June 30, 2011 and $338,010 at December 31, 2010)		295,672			286,563
Goodwill		591,636			571,796
Other intangibles, net		299,721			289,588
Other assets		66,123			50,614
Total assets	$	2,185,553		$	2,027,098
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt	$	38,010		$	37,228
Accounts payable		206,796			143,331
Accrued liabilities		203,689			179,041
Total current liabilities		448,495			359,600
Long-term debt, less current maturities		148,308			250,682
Postretirement benefits other than pensions		13,110			13,678
Deferred income taxes		64,101			62,157
Other liabilities		145,952			151,308
Total liabilities		819,966			837,425
Stockholders’ equity:
Common stock, $0.01 par value; 100,000,000 shares authorized; 52,315,578 and 52,181,335 shares outstanding at June 30, 2011 and December 31, 2010, respectively		597			595
Capital in excess of par value		603,165			591,988
Retained earnings		827,059			705,699
Accumulated other comprehensive income		110,765			61,425
Treasury stock at cost; 7,344,984 and 7,268,653 shares at June 30, 2011 and December 31, 2010, respectively		(188,869	)		(182,544	)
Total Gardner Denver stockholders’ equity		1,352,717			1,177,163
Noncontrolling interests		12,870			12,510
Total stockholders’ equity		1,365,587			1,189,673
Total liabilities and stockholders’ equity	$	2,185,553		$	2,027,098

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

GARDNER DENVER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2011			2010
Cash Flows From Operating Activities
Net income	$	127,595		$	70,177
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		30,191			30,348
Foreign currency transaction loss (gain), net		2,589			(628	)
Net loss on asset dispositions		1,140			629
Stock issued for employee benefit plans		697			1,863
Stock-based compensation expense		4,262			3,022
Excess tax benefits from stock-based compensation		(2,237	)		(1,903	)
Deferred income taxes		(939	)		(4,754	)
Changes in assets and liabilities:
Receivables		(61,498	)		(36,234	)
Inventories		(47,318	)		(10,762	)
Accounts payable and accrued liabilities		71,059			6,629
Other assets and liabilities, net		(11,037	)		9,230
Net cash provided by operating activities		114,504			67,617
Cash Flows From Investing Activities
Capital expenditures		(20,980	)		(12,338	)
Disposals of property, plant and equipment		1,124			1,154
Net cash paid in business combinations		(2,325	)		(8	)
Net cash used in investing activities		(22,181	)		(11,192	)
Cash Flows From Financing Activities
Principal payments on short-term borrowings		(10,527	)		(11,804	)
Proceeds from short-term borrowings		5,886			12,984
Principal payments on long-term debt		(186,309	)		(43,410	)
Proceeds from long-term debt		82,575			8,016
Proceeds from stock option exercises		4,918			9,712
Excess tax benefits from stock-based compensation		2,237			1,903
Purchase of treasury stock		(6,169	)		(17,864	)
Cash dividends paid		(5,237	)		(5,246	)
Acquisition of noncontrolling interests		(18,806	)		—
Other		(1,024	)		(996	)
Net cash used in financing activities		(132,456	)		(46,705	)
Effect of exchange rate changes on cash and cash equivalents		4,451			(8,318	)
Net (decrease) increase in cash and cash equivalents		(35,682	)		1,402
Cash and cash equivalents, beginning of year		157,029			109,736
Cash and cash equivalents, end of period	$	121,347		$	111,138

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GARDNER DENVER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts and amounts described in millions)
(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

     The accompanying condensed consolidated financial statements include the accounts of Gardner Denver, Inc. and its majority-owned subsidiaries (collectively referred to herein as “Gardner Denver” or the “Company”). Certain prior year balance sheet items have been reclassified to conform to the current year presentation. In consolidation, all significant intercompany transactions and accounts have been eliminated.

     The financial information presented as of any date other than December 31, 2010 has been prepared from the books and records of the Company without audit. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such financial statements.

     The unaudited interim condensed consolidated financial statements should be read in conjunction with the complete consolidated financial statements and notes thereto included in Gardner Denver’s Annual Report on Form 10-K for the year ended December 31, 2010.

     The results of operations for the six-month period ended June 30, 2011 are not necessarily indicative of the results to be expected for the full year. The balance sheet at December 31, 2010 has been derived from the audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

     Other than as specifically indicated in these “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q, the Company has not materially changed its significant accounting policies from those disclosed in its Form 10-K for the year ended December 31, 2010.

New Accounting Standards

Recently Adopted Accounting Pronouncements

     In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 updates the existing multiple-element revenue arrangements guidance currently included under FASB Accounting Standards

6

Codification (“ASC”) 605-25, Revenue Recognition, Multiple-Element Arrangements. The revised guidance primarily provides two significant changes: (i) eliminates the need for objective and reliable evidence of fair value for the undelivered element in order for a delivered item to be treated as a separate unit of accounting, and (ii) eliminates the residual method to allocate the arrangement consideration. In addition, the guidance expands the disclosure requirements for revenue recognition. ASU 2009-13 was effective for fiscal years beginning on or after June 15, 2010. Adoption of this guidance in the first quarter of 2011 did not have a material effect on the Company’s results of operations, financial position and cash flows.

     In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820) — Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). This update requires the following new disclosures: (i) the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and a description of the reasons for the transfers; and (ii) a reconciliation for fair value measurements using significant unobservable inputs (Level 3), including separate information about purchases, sales, issuance, and settlements. The update also clarifies existing requirements about fair value measurement disclosures and disclosures about inputs and valuation techniques. The new disclosures and clarifications of existing disclosures were effective for interim and annual reporting periods beginning after December 15, 2009, except for the reconciliation of Level 3 activity, which was effective for the Company in the first quarter of 2011. See Note 11 “Hedging Activities and Fair Value Measurements” for the disclosures required by ASU 2010-06. Adoption of this guidance had no effect on the Company’s results of operations, financial position and cash flows.

     In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) — Presentation of Comprehensive Income (“ASU 2011-05”). This update requires that the components of net income, the components of other comprehensive income and the total of comprehensive income be presented as a single continuous financial statement or in two separate but consecutive statements. The option of presenting other comprehensive income in the statement of stockholders’ equity is eliminated. This update also requires the presentation on the face of the financial statements of reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.

Note 2. Restructuring

     In 2008, 2009 and 2010, the Company announced restructuring plans designed to address (i) rationalization of the Company’s manufacturing footprint, (ii) slowing global economic growth and the resulting deterioration in the Company’s end markets, (iii) integration of CompAir Holdings Limited (“CompAir”) into its existing operations and (iv) additional cost reductions and margin improvement initiatives. These plans included the closure and consolidation of manufacturing facilities in Europe and the U.S., and various voluntary and involuntary employee termination and relocation programs. Execution of these plans was substantively completed during 2010. The Company recorded additional charges during the six-month period of 2011 in connection with the continued rationalization of facilities and other cost reduction initiatives. Charges recorded in connection with these plans, in accordance with FASB ASC 420, Exit or Disposal Cost Obligations and FASB ASC 712, Compensation-Nonretirement Postemployment Benefits, are included in “Other operating expense, net” in the Condensed Consolidated Statements of Operations, and are summarized for the fiscal years ended December 31, 2009 and 2010 and the six-month period ended June 30, 2011 by reportable segment as follows:

7

			Engineered
	Industrial		Products
	Products Group		Group			Total
Fiscal year 2009	$	25,791	$	20,335		$	46,126
Fiscal year 2010		3,687		(1,491	)		2,196
Six months ended June 30, 2011		3,571		392			3,963
Total	$	33,049	$	19,236		$	52,285

     The following table summarizes the activity in the restructuring accrual accounts:

	Termination
	Benefits			Other			Total
Balance as of December 31, 2010	$	4,593		$	1,450		$	6,043
Charged to expense		3,279			684			3,963
Paid		(4,333	)		(1,193	)		(5,526	)
Other, net		667			40			707
Balance as of June 30, 2011	$	4,206		$	981		$	5,187

Note 3. Inventories

     Inventories as of June 30, 2011 and December 31, 2010 consisted of the following:

	June 30,			December 31,
	2011			2010
Raw materials, including parts and subassemblies	$	199,511		$	163,192
Work-in-process		54,315			38,419
Finished goods		61,731			54,898
		315,557			256,509
Excess of FIFO costs over LIFO costs		(16,087	)		(15,024	)
Inventories, net	$	299,470		$	241,485

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Note 4. Goodwill and Other Intangible Assets

     The changes in the carrying amount of goodwill attributable to each business segment for the six-month period ended June 30, 2011, and the year ended December 31, 2010, and cumulative impairment charges are presented in the table below:

	Industrial			Engineered
	Products Group			Products Group			Total
Balance as of December 31, 2009	$	256,824		$	321,190		$	578,014
Acquisitions		—			5,202			5,202
Foreign currency translation		(6,740	)		(4,680	)		(11,420	)
Balance as of December 31, 2010		250,084			321,712			571,796
Foreign currency translation		9,126			10,714			19,840
Balance as of June 30, 2011	$	259,210		$	332,426		$	591,636
Cumulative goodwill impairment charges (1)	$	252,533		$	—		$	252,533

(1) Based on exchange rates at the date of the charge.

     The $5.2 million increase in goodwill related to acquisitions in 2010 was associated with the valuation of ILMVAC GmbH (“ILMVAC”).

     The following table presents the gross carrying amount and accumulated amortization of identifiable intangible assets, other than goodwill, at the dates presented:

	June 30, 2011					December 31, 2010
	Gross					Gross
	Carrying		Accumulated			Carrying		Accumulated
	Amount		Amortization			Amount		Amortization
Amortized intangible assets:
Customer lists and relationships	$	126,701	$	(35,658	)	$	118,844	$	(29,973	)
Acquired technology		101,235		(57,678	)		94,689		(53,224	)
Trade names		58,528		(10,094	)		55,320		(8,621	)
Other		7,110		(3,962	)		7,344		(3,424	)
Unamortized intangible assets:
Trade names		113,539		—			108,633		—
Total other intangible assets	$	407,113	$	(107,392	)	$	384,830	$	(95,242	)

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     Amortization of intangible assets for the three and six-month periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Intangible asset amortization expense	$	4,510	$	4,249	$	8,851	$	8,788

     Amortization of intangible assets held as of June 30, 2011 is anticipated to be approximately $17.0 million annually in 2012 through 2015 based upon exchange rates as of June 30, 2011. The increase in the carrying amount of identifiable assets other than goodwill between December 31, 2010 and June 30, 2011 was due primarily to the effect of changes in foreign currency exchange rates and the acquisition of certain technology during the second quarter of 2011.

Note 5. Accrued Liabilities

Accrued liabilities as of June 30, 2011 and December 31, 2010 consisted of the following:

	June 30,		December 31,
	2011		2010
Salaries, wages and related fringe benefits	$	57,751	$	50,540
Taxes		32,977		25,367
Advance payments on sales contracts		43,689		39,026
Product warranty		23,531		19,100
Other		45,741		45,008
Total accrued liabilities	$	203,689	$	179,041

     A reconciliation of the changes in the accrued product warranty liability for the three and six-month periods ended June 30, 2011 and 2010 is as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Balance at beginning of period	$	21,033		$	18,134		$	19,100		$	19,312
Product warranty accruals		8,234			5,360			14,966			10,950
Settlements		(5,964	)		(5,784	)		(11,272	)		(11,985	)
Effect of foreign currency translation		228			(704	)		737			(1,271	)
Balance at end of period	$	23,531		$	17,006		$	23,531		$	17,006

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Note 6. Pension and Other Postretirement Benefits

     The following table summarizes the components of net periodic benefit cost for the Company’s defined benefit pension plans and other postretirement benefit plans recognized for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	276		$	252		$	8		$	4
Interest cost		897			965			3,066			2,808			193			249
Expected return on plan assets		(1,054	)		(885	)		(2,829	)		(2,509	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			10			6			(15	)		(25	)
Unrecognized net actuarial loss (gain)		308			359			224			238			(318	)		(325	)
FASB ASC 715-30 curtailment gain		—			—			—			—			—			—
Total net periodic benefit cost (income)	$	151		$	439		$	747		$	795		$	(132	)	$	(97	)

	Six Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	538		$	524		$	15		$	8
Interest cost		1,794			1,930			6,036			5,772			386			498
Expected return on plan assets		(2,108	)		(1,770	)		(5,586	)		(5,134	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			19			12			(30	)		(50	)
Unrecognized net actuarial loss (gain)		616			718			443			494			(636	)		(650	)
FASB ASC 715-30 curtailment gain		—			—			—			(837	)		—			—
Total net periodic benefit cost (income)	$	302		$	878		$	1,450		$	831		$	(265	)	$	(194	)

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Note 7. Debt

     The Company’s debt at June 30, 2011 and December 31, 2010 is summarized as follows:

	June 30,		December 31,
	2011		2010
Short-term debt	$	2,951	$	7,440
Long-term debt:
Credit Line, due 2013 (1)	$	35,000	$	—
Term Loan, denominated in U.S. dollars (“USD”), due 2013 (2)		68,077		75,000
Term Loan, denominated in euros (“EUR”), due 2013 (3)		64,233		65,250
Senior Subordinated Notes at 8%, due 2013 (4)		—		125,000
Secured Mortgages (5)		7,610		7,322
Capitalized leases and other long-term debt		8,447		7,898
Total long-term debt, including current maturities		183,367		280,470
Current maturities of long-term debt		35,059		29,788
Total long-term debt, less current maturities	$	148,308	$	250,682

(1)	The loans under this facility may be denominated in USD or several foreign currencies. The interest rates under the facility are based on prime, federal funds and/or LIBOR for the applicable currency. At June 30, 2011, the applicable rate was 1.8% and averaged 2.1% for the six-month period ended June 30, 2011.
(2)	The interest rate for this loan varies with prime, federal funds and/or LIBOR. At June 30, 2011, the applicable rate was 2.2% and averaged 2.3% for the six-month period ended June 30, 2011.
(3)	The interest rate for this loan varies with LIBOR. At June 30, 2011, this rate was 3.2% and averaged 3.0% for the six-month period ended June 30, 2011.
(4)	On May 2, 2011, the Company redeemed all $125.0 million in aggregate principal amount outstanding of its Senior Subordinated Notes at 8%, plus accrued and unpaid interest. As a result, the Company wrote off $834 of unamortized debt issue cost.
(5)	This amount consists of two fixed-rate commercial loans with an outstanding balance of €5,248 at June 30, 2011. The loans are secured by the Company’s facility in Bad Neustadt, Germany.

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Note 8. Stock-Based Compensation

     The following table summarizes the total stock-based compensation expense included in the consolidated statements of operations and the realized excess tax benefits included in the consolidated statements of cash flows for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Selling and administrative expenses	$	1,928		$	1,165		$	4,262		$	3,022
Total stock-based compensation expense included in operating expenses	$	1,928		$	1,165		$	4,262		$	3,022
Income before income taxes		(1,928	)		(1,165	)		(4,262	)		(3,022	)
Provision for income taxes		573			357			1,232			964
Net income	$	(1,355	)	$	(808	)	$	(3,030	)	$	(2,058	)
Net cash provided by operating activities	$	(724	)	$	(414	)	$	(2,237	)	$	(1,903	)
Net cash used in financing activities	$	724		$	414		$	2,237		$	1,903

Stock Option Awards

     A summary of the Company’s stock option activity for the six-month period ended June 30, 2011 is presented in the following table (underlying shares in thousands):

				Outstanding				Weighted-
				Weighted-				Average
				Average		Aggregate		Remaining
				Exercise Price		Intrinsic		Contractual
	Shares			(per share)		Value		Life
Outstanding at December 31, 2010		863		$	32.69
Granted		179		$	76.34
Exercised		(160	)	$	30.75
Forfeited		(25	)	$	47.01
Expired or canceled		—		$	—
Outstanding at June 30, 2011		857		$	41.65	$	36,346	4.6 years
Exercisable at June 30, 2011		456		$	32.03	$	23,749	3.5 years

     The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying stock options and the quoted closing price of the Company’s common stock at June 30, 2011 multiplied by the number of in-the-money stock options. The following table presents certain other information about the Company’s stock options:

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Weighted-average estimated grant-date fair value of employee stock options granted (per share)	$	28.96			$	28.23
Total pre-tax intrinsic value of stock options exercised	$	2,903	$	1,897	$	7,435	$	8,230
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011					$	5,115
Weighted-average period (in years) to be recognized as expense						2.1

Valuation Assumptions

     The fair value of each stock option grant under the Company’s Amended and Restated Long-Term Incentive Plan was estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used for the periods indicated are noted in the table below:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Assumptions:
Risk-free interest rate		1.4	%		1.7	%		1.9	%		2.3	%
Dividend yield		0.2	%		0.5	%		0.3	%		0.5	%
Volatility factor		45			46			44			43
Expected life (in years)		3.8			3.8			4.3			4.7

Restricted Share Awards

     A summary of the Company’s restricted share award activity for the six-month period ended June 30, 2011 is presented in the following table (underlying shares in thousands):

				Weighted-
				Average Grant-
				Date Fair Value
	Shares			(per share)
Nonvested at December 31, 2010		161		$	35.13
Granted		43		$	77.81
Vested		(41	)	$	38.08
Forfeited		(9	)	$	39.86
Nonvested at June 30, 2011		154		$	46.09

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     The restricted shares granted in the six-month period ended June 30, 2011 were valued at the market close price of the Company’s common stock on the date of grant. The following table presents certain other information about the Company’s restricted share awards:

	Six Months Ended
	June 30,
	2011		2010
Total fair value of awards vested during the period	$	3,035	$	843
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011	$	3,770
Weighted-average period (in years) to be recognized as expense		2.2

Note 9. Stockholders’ Equity and Earnings Per Share

     In November 2008, the Company’s Board of Directors authorized a share repurchase program to acquire up to 3.0 million shares of the Company’s outstanding common stock. During the six-month period ended June 30, 2011, the Company repurchased 72 thousand shares under this program at a total cost of $5.3 million.

     The following table details the calculation of basic and diluted earnings per common share, and antidilutive equity-based awards outstanding not included in the computation of diluted earnings per common share, for the three and six-month periods ended June 30, 2011 and 2010 (shares in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334	$	126,599	$	69,292
Weighted average shares of common stock outstanding:
Basic		52,285		52,399		52,246		52,275
Effect of stock-based compensation awards		399		403		416		421
Diluted		52,684		52,802		52,662		52,696
Earnings Per Share:
Basic	$	1.28	$	0.71	$	2.42	$	1.33
Diluted	$	1.27	$	0.71	$	2.40	$	1.31
Antidilutive equity-based awards outstanding		147		245		105		207

     On April 20, 2011, the Company announced that it had reached an agreement with the minority shareholders of its two joint ventures in China, Shanghai CompAir Compressor Co. Ltd. and Shanghai CompAir-Dalong High Pressure Equipment Co. Ltd., to acquire all of their equity interests in these entities, representing 49 percent and 40 percent of the two entities, respectively. The purchase price of RMB 122.0 million (approximately $18.8 million based on exchange rates at the date of payment) was placed by the Company into escrow with the Shanghai United Assets and Equity Exchange during the second quarter of 2011 pending finalization of certain

15

Chinese governmental approvals, and was recorded as a cash outflow from financing activities in the consolidated statements of cash flows. The transaction is currently expected to close during the third quarter of 2011 and will be accounted for by the Company as an equity transaction, at which time the non-controlling interests associated with these two joint ventures will be eliminated from the consolidated statements of operations and balance sheet.

Note 10. Accumulated Other Comprehensive Income (Loss)

     The Company’s other comprehensive income (loss) consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations, (ii) realized and unrealized foreign currency gains and losses on intercompany notes of a long-term nature and certain hedges of foreign subsidiaries, (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swaps), net of income taxes, and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes.

     The following table sets forth the changes in each component of accumulated other comprehensive income (loss):

							Unrealized
	Cumulative						Gains						Accumulated
	Currency						(Losses) on			Pension and			Other
	Translation			Foreign Currency			Cash Flow			Postretirement			Comprehensive
	Adjustment(1)			Gains (Losses)			Hedges			Benefit Plans			Income
Balance at December 31, 2009	$	134,573		$	(21,319	)	$	(250	)	$	(30,490	)	$	82,514
Before tax (loss) income		(38,820	)		8,920			(706	)		287			(30,319	)
Income tax effect		—			297			268			(84	)		481
Other comprehensive (loss) income		(38,820	)		9,217			(438	)		203			(29,838	)
Balance at March 31, 2010		95,753			(12,102	)		(688	)		(30,287	)		52,676
Before tax (loss) income		(47,788	)		664			(495	)		260			(47,359	)
Income tax effect		—			(649	)		188			(75	)		(536	)
Other comprehensive (loss) income		(47,788	)		15			(307	)		185			(47,895	)
Balance at June 30, 2010	$	47,965		$	(12,087	)	$	(995	)	$	(30,102	)	$	4,781
Balance at December 31, 2010	$	69,282		$	19,095		$	(933	)	$	(26,019	)	$	61,425
Before tax income (loss)		31,245			3,524			404			(669	)		34,504
Income tax effect		—			(434	)		(154	)		(71	)		(659	)
Other comprehensive income (loss)		31,245			3,090			250			(740	)		33,845
Balance at March 31, 2011		100,527			22,185			(683	)		(26,759	)		95,270
Before tax income (loss)		17,711			(2,403	)		(23	)		136			15,421
Income tax effect		—			99			9			(34	)		74
Other comprehensive income (loss)		17,711			(2,304	)		(14	)		102			15,495
Balance at June 30, 2011	$	118,238		$	19,881		$	(697	)	$	(26,657	)	$	110,765

(1) Income taxes are generally not provided for foreign currency translation adjustments, as such adjustments relate to permanent investments in international subsidiaries.

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     The Company’s comprehensive income (loss) for the three and six-month periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011		2010			2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334		$	126,599	$	69,292
Other comprehensive income (loss)		15,495		(47,895	)		49,340		(77,733	)
Comprehensive income (loss) attributable to Gardner Denver		82,616		(10,561	)		175,939		(8,441	)
Net income attributable to noncontrolling interests		575		590			996		885
Other comprehensive income (loss)		196		(86	)		388		(809	)
Comprehensive income attributable to noncontrolling interests		771		504			1,384		76
Total comprehensive income (loss)	$	83,387	$	(10,057	)	$	177,323	$	(8,365	)

Note 11. Hedging Activities and Fair Value Measurements

Hedging Activities

     The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in commodity prices, interest rates, and foreign currency exchange rates. The Company’s exposure to these risks is managed through a combination of operating and financing activities. The Company selectively uses derivative financial instruments (“derivatives”), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively. The Company does not purchase or hold derivatives for trading or speculative purposes. Fluctuations in commodity prices, interest rates, and foreign currency exchange rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

     The Company’s exposure to interest rate risk results primarily from its borrowings of $186.3 million at June 30, 2011. The Company manages its debt centrally, considering tax consequences and its overall financing strategies. The Company manages its exposure to interest rate risk by maintaining a mixture of fixed and variable rate debt and, from time to time, uses pay-fixed interest rate swaps as cash flow hedges of variable rate debt in order to adjust the relative proportions.

     A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the U.S. in currencies other than the USD. Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. The USD, EUR, British pound sterling (“GBP”), and Chinese yuan (“CNY”) are the principal currencies in which the Company and its subsidiaries enter into transactions. The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities, and earnings into USD. The Company partially offsets these exposures by having certain of its non-U.S. subsidiaries act as the obligor on a portion of its borrowings and by denominating such borrowings, as well as a portion of the borrowings for which the Company is the obligor, in currencies other than the USD.

17

     The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.

     In accordance with FASB ASC 815, Derivatives and Hedging (“FASB ASC 815”), the Company records its derivatives as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are recognized either in net income or in other comprehensive income, depending on the designated purpose of the derivative. All cash flows associated with derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows. It is the Company’s policy not to speculate in derivative instruments.

     Fluctuations due to changes in foreign currency exchange rates in the value of non-USD borrowings that have been designated as hedges of the Company’s net investment in foreign operations are included in other comprehensive income.

     The following tables summarize the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets:

	June 30, 2011
				Asset		Liability
		Notional		Derivatives		Derivatives
	Balance Sheet Location	Amount(1)		Fair Value(1)		Fair Value(1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	79,002	$	—	$	1,172
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Current assets	$	10,389	$	620	$	—
Foreign currency forwards	Current liabilities	$	87,788	$	499	$	2,774

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	December 31, 2010
				Asset		Liability
		Notional		Derivatives		Derivatives
	Balance Sheet Location	Amount(1)		Fair Value(1)		Fair Value(1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	76,742	$	—	$	1,560
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Accrued liabilities	$	113,871	$	709	$	1,884

(1) Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

     Gains and losses on derivatives designated as cash flow hedges in accordance with FASB ASC 815 included in the Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2011 and 2010, respectively, are as presented in the table below:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Interest rate swap contracts (1)
Amount of gain or (loss) recognized in AOCI on derivatives (effective portion)	$	(292	)	$	(825	)	$	(170	)	$	(1,912	)
Amount of gain or (loss) reclassified from AOCI into income (effective portion)		(269	)		(330	)		(551	)		(711	)
Amount of gain or (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)		—			(5	)		(1	)		(5	)

(1) Losses on derivatives reclassified from accumulated other comprehensive income (“AOCI”) into income (effective portion) were included in the interest expense line on the face of the Condensed Consolidated Statements of Operations.

     At June 30, 2011, the Company is the fixed rate payor on three interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on a total of $50.0 million and €20.0 million of the Company’s LIBOR-based variable rate borrowings. These contracts carry fixed rates ranging from 1.8% to 2.2% and have expiration dates ranging from 2012 to 2013. These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments. Based on LIBOR-based swap yield curves as of June 30, 2011, the Company expects to reclassify losses of $0.8 million out of AOCI into earnings during the next 12 months. The Company’s LIBOR-based variable rate borrowings outstanding at June 30, 2011 were $68.1 million and €44.3 million.

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     There were 44 foreign currency forward contracts outstanding as of June 30, 2011 with notional amounts ranging from $0.1 million to $11.3 million. The Company has not designated any forward contracts as hedging instruments. The majority of these contracts are used to hedge the change in fair value of recognized foreign currency denominated assets or liabilities caused by changes in foreign currency exchange rates. The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included in the other operating expense, net, line on the face of the Condensed Consolidated Statements of Operations. The Company’s gains and (losses) on forward currency contracts outstanding and total net foreign currency gains and (losses) for the three and six-month periods ended June 30, 2011 and 2010 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Foreign currency forward contracts	$	(1,586	)	$	2,188		$	(2,005	)	$	5,360
Total net foreign currency (losses) and gains (1)		(1,344	)		(373	)		(2,589	)		628

(1) See Note 13 “Supplemental Information”

     As of June 30, 2011, the Company had designated approximately €25.5 million of its term loan denominated in EUR as a hedge of its net investment in subsidiaries with EUR functional currencies. Accordingly, changes in the fair value of this debt due to changes in the USD to EUR exchange rate have been recorded through other comprehensive income. The Company’s gains and (losses), net of income tax, associated with changes in the fair value of this debt for the three and six-month periods ended June 30, 2011 and 2010, and the net balance of such gains and losses at June 30, 2011 and 2010 were as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011			2010		2011			2010
(Loss) gain, net of income tax, recorded through other comprehensive income	$	(317	)	$	1,566	$	(317	)	$	2,637
Balance included in accumulated other comprehensive income at June 30							(5,450	)		(2,809	)

Fair Value Measurements

     The Company’s financial instruments consist primarily of cash equivalents, trade receivables, trade payables, deferred compensation assets and obligations, derivatives and debt instruments. The book values of these instruments are a reasonable estimate of their respective fair values.

     The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2011:

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	Level 1		Level 2		Level 3		Total
Financial Assets
Foreign currency forwards (1)	$	—	$	1,119	$	—	$	1,119
Trading securities held in deferred compensation plan (2)		6,334		—		—		6,334
Total	$	6,334	$	1,119	$	—	$	7,453
Financial Liabilities
Foreign currency forwards (1)	$	—	$	2,774	$	—	$	2,774
Interest rate swaps (3)		—		1,172		—		1,172
Phantom stock plan (4)		—		6,069		—		6,069
Deferred compensation plan (5)		6,334		—		—		6,334
Total	$	6,334	$	10,015	$	—	$	16,349

(1)	Based on internally-developed models that use as their basis readily observable market parameters such as current spot and forward rates, and the LIBOR index.
(2)	Based on the observable price of publicly traded mutual funds which, in accordance with FASB ASC 710, Compensation — General, are classified as “Trading” securities and accounted for using the mark-to-market method.
(3)	Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of June 30, 2011. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.
(4)	Based on the price of the Company’s common stock.
(5)	Based on the fair value of the investments in the deferred compensation plan.

Note 12. Income Taxes

     As of June 30, 2011, the total balance of unrecognized tax benefits was $4.1 million compared with $4.5 million at December 31, 2010. The decrease in unrecognized tax benefits was primarily due to expiring statutes of limitations in Germany and other jurisdictions, and the settlement of the 2003 and 2004 tax audits in Germany and certain items related to the 2005 audit. The unrecognized tax benefits at June 30, 2011 include $4.1 million of uncertain tax positions that would affect the Company’s effective tax rate if recognized, of which $2.0 million would be offset by a reduction of a corresponding deferred tax asset. The Company does not expect any significant changes to its unrecognized tax benefits within the next twelve months.

     The Company’s accounting policy with respect to interest expense on underpayments of income tax and related penalties is to recognize such interest expense and penalties as part of the provision for income taxes. The Company’s income tax liabilities at June 30, 2011 include approximately $0.7 million of accrued interest and $0.3 million of penalties.

     The Company’s U.S. federal income tax returns for the tax years 2008 and 2009 are under examination by the Internal Revenue Service. The examination was initiated during the quarter ended September 30, 2010. As of the date of this report, the examination has not identified any material changes. The statutes of limitations for the U.S.

21

state tax returns are open beginning with the 2006 tax year, except for three states for which the statutes have been extended, beginning with the 2003 tax year for one state and the 2006 tax year for the other two states.

     The Company is subject to income tax in approximately 30 jurisdictions outside the U.S. The statute of limitations varies by jurisdiction. The Company’s significant operations outside the U.S. are located in China, the United Kingdom and Germany. In Germany, the Company is finalizing the remaining tax audit for the 2005 tax year. Tax years 2006 and beyond remain subject to potential examination. These examinations have not identified any material changes. In China and the United Kingdom, tax years prior to 2006 are closed. In addition, audits are being conducted in certain other countries. To date, no material adjustments have been proposed as a result of these audits.

     The following table summarizes the Company’s income tax provision and effective income tax rate:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510
Provision for income taxes	$	27,263		$	12,603		$	49,802		$	22,333
Effective income tax rate		28.7	%		24.9	%		28.1	%		24.1	%

     The year over year increase in the effective tax rate primarily reflects a higher proportion of taxable income in the U.S. in 2011 compared to 2010.

Note 13. Supplemental Information

     The components of other operating expense, net, and supplemental cash flow information are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30
	2011		2010		2011		2010
Other Operating Expense, Net
Foreign currency losses (gains), net	$	1,344	$	373	$	2,589	$	(628	)
Restructuring charges, net (1)		2,983		1,342		3,963		2,696
Other, net		1,760		1,553		1,147		(151	)
Total other operating expense, net	$	6,087	$	3,268	$	7,699	$	1,917
Supplemental Cash Flow Information
Cash taxes paid					$	46,233	$	25,381
Interest paid						9,544		11,329

(1) See Note 2 “Restructuring.”

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Note 14. Contingencies

     The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. In addition, due to the bankruptcies of several asbestos manufacturers and other primary defendants, among other things, the Company has been named as a defendant in a number of asbestos personal injury lawsuits. The Company has also been named as a defendant in a number of silica personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources and typically the Company is one of approximately 25 or more named defendants. In the Company’s experience to date, the substantial majority of the plaintiffs have not suffered an injury for which the Company bears responsibility.

     Predecessors to the Company sometimes manufactured, distributed and/or sold products allegedly at issue in the pending asbestos and silica litigation lawsuits (the “Products”). However, neither the Company nor its predecessors ever mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand, the materials that allegedly caused the injury underlying the lawsuits. Moreover, the asbestos-containing components of the Products, if any, were enclosed within the subject Products.

     The Company has entered into a series of agreements with certain of its or its predecessors’ legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica lawsuits filed against the Company. The Company has also pursued litigation against certain insurers or indemnitors where necessary. The latest of these actions, Gardner Denver, Inc. v. Certain Underwriters at Lloyd’s, London, et al., was filed on July 9, 2010, in the Eighth Judicial District, Adams County, Illinois, as case number 10-L-48 (the “Adams County Case”). In the lawsuit, the Company seeks, among other things, to require certain excess insurer defendants to honor their insurance policy obligations to the Company, including payment in whole or in part of the costs associated with the asbestos lawsuits filed against the Company.

     The Company believes that the pending and future asbestos and silica lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity, based on: the Company’s anticipated insurance and indemnification rights to address the risks of such matters; the limited potential asbestos exposure from the Products described above; the Company’s experience that the vast majority of plaintiffs are not impaired with a disease attributable to alleged exposure to asbestos or silica from or relating to the Products or for which the Company otherwise bears responsibility; various potential defenses available to the Company with respect to such matters; and the Company’s prior disposition of comparable matters. However, due to inherent uncertainties of litigation and because future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in the Adams County Case, or other inability to collect from the Company’s historical insurers or indemnitors could cause a different outcome. While the outcome of legal proceedings is inherently uncertain, based on presently known facts, experience, and circumstances, the Company believes that the amounts accrued on its balance sheet are adequate and that the liabilities arising from the asbestos and silica personal injury lawsuits will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company’s consolidated financial position, results of operations or liquidity. However, at this time, based on presently available information, the Company views this possibility as remote.

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     The Company has been identified as a potentially responsible party (“PRP”) with respect to several sites designated for cleanup under U.S. federal “Superfund” or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. Persons potentially liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although these laws impose joint and several liability, in application, the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Based on currently available information, the Company was only a small contributor to these waste sites, and the Company has, or is attempting to negotiate, de minimis settlements for their cleanup. The cleanup of the remaining sites is substantially complete and the Company’s future obligations entail a share of the sites’ ongoing operating and maintenance expense.

     The Company is also addressing three on-site cleanups for which it is the primary responsible party. Two of these cleanup sites are in the operation and maintenance stage and the third is in the implementation stage. Based on currently available information, the Company does not anticipate that any of these sites will result in material additional costs beyond those already accrued on its balance sheet.

     The Company has an accrued liability on its balance sheet to the extent costs are known or can be reasonably estimated for its remaining financial obligations for these matters. Based on currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to the sites discussed above.

Note 15. Segment Results

     The Company has determined its reportable segments in accordance with FASB ASC 280, Segment Reporting (“FASB ASC 280”), and evaluates the performance of its reportable segments based on, among other measures, operating income, which is defined as income before interest expense, other expense (income), net, and income taxes. Reportable segment operating income and segment operating margin (defined as segment operating income divided by segment revenues) are indicative of short-term operating performance and ongoing profitability. Management closely monitors the operating income and operating margin of each reportable segment to evaluate past performance and actions required to improve profitability.

     In the Industrial Products Group, the Company designs, manufactures, markets and services the following products and related aftermarket parts for industrial and commercial applications: rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal and side channel blowers; and vacuum pumps primarily serving manufacturing, transportation and general industry and selected OEM and engineered system applications. The Company also markets and services complementary ancillary products. Stationary air compressors are used in manufacturing, process applications and materials handling, and to power air tools and equipment. Blowers are used primarily in pneumatic conveying, wastewater aeration, numerous applications in industrial manufacturing and engineered vacuum systems. The markets served are primarily in Europe, the U.S. and Asia.

     In the Engineered Products Group, the Company designs, manufactures, markets and services a diverse group of pumps, compressors, liquid ring vacuum pumps, water jetting and loading arm systems and related aftermarket parts. These products are used in well drilling, well servicing and production of oil and natural gas; industrial,

24

commercial and transportation applications; and in industrial cleaning and maintenance. Liquid ring pumps are used in many different applications such as water removal, distilling, reacting, flare gas recovery, efficiency improvement, lifting and handling, and filtering, principally in the pulp and paper, industrial manufacturing, petrochemical and power industries. This segment also designs, manufactures, markets and services other engineered products and components and equipment for the chemical, petroleum and food industries. The markets served are primarily in the U.S., Europe, Canada and Asia.

     The following table provides financial information by business segment for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Industrial Products Group
Revenues	$	327,846		$	268,650		$	614,056		$	515,044
Operating income		34,325			20,157			65,127			39,710
Operating income as a percentage of revenues		10.5	%		7.5	%		10.6	%		7.7	%
Engineered Products Group
Revenues	$	282,847		$	180,869		$	528,490		$	356,639
Operating income		64,847			36,430			120,868			64,341
Operating income as a percentage of revenues		22.9	%		20.1	%		22.9	%		18.0	%
Reconciliation of Segment Results to Consolidated Results
Total segment operating income	$	99,172		$	56,587		$	185,995		$	104,051
Interest expense		3,934			6,062			9,281			12,178
Other expense (income), net		279			(2	)		(683	)		(637	)
Consolidated income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510

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

     The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, including the financial statements, accompanying notes and management’s discussion and analysis of financial condition and results of operations, and the interim condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q.

Operating Segments

     In the Industrial Products Group, the Company designs, manufactures, markets and services the following products and related aftermarket parts for industrial and commercial applications: rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal and side channel blowers; and vacuum pumps primarily serving manufacturing, transportation and general industry and selected OEM and engineered system applications. The Company also markets and services complementary ancillary products. Stationary air compressors are used in manufacturing, process applications and materials handling, and to power air tools and equipment. Blowers are used primarily in pneumatic conveying, wastewater aeration, numerous applications in industrial manufacturing and engineered vacuum systems. The markets served are primarily in Europe, the U.S. and Asia.

     In the Engineered Products Group, the Company designs, manufactures, markets and services a diverse group of pumps, compressors, liquid ring vacuum pumps, water jetting and loading arm systems and related aftermarket parts. These products are used in well drilling, well servicing and production of oil and natural gas; industrial, commercial and transportation applications; and in industrial cleaning and maintenance. Liquid ring pumps are used in many different applications such as water removal, distilling, reacting, flare gas recovery, efficiency improvement, lifting and handling, and filtering, principally in the pulp and paper, industrial manufacturing, petrochemical and power industries. This segment also designs, manufactures, markets and services other engineered products and components and equipment for the chemical, petroleum and food industries. The markets served are primarily in the U.S., Europe, Canada and Asia.

     The Company has determined its reportable segments in accordance with FASB ASC 280 and evaluates the performance of its reportable segments based on, among other measures, operating income, which is defined as income before interest expense, other expense (income), net, and income taxes. Reportable segment operating income and segment operating margin (defined as segment operating income divided by segment revenues) are indicative of short-term operating performance and ongoing profitability. Management closely monitors the operating income and operating margin of each business segment to evaluate past performance and identify actions required to improve profitability. See Note 15 “Segment Results” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q.

Non-GAAP Financial Measures

     To supplement the Company’s financial information presented in accordance with GAAP, management, from time to time, uses additional measures to clarify and enhance understanding of past performance and prospects for the future. These measures may exclude, for example, the impact of unique and infrequent items or items outside

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of management’s control (e.g. foreign currency exchange rates). Such measures are provided in addition to and should not be considered to be a substitute for, or superior to, the comparable measure under GAAP.

Results of Operations

Performance during the Quarter Ended June 30, 2011 Compared
with the Quarter Ended June 30, 2010

Revenues

     Revenues increased $161.2 million, or 36%, to $610.7 million in the three-month period ended June 30, 2011, compared to $449.5 million in the three-month period ended June 30, 2010. This increase was attributable to higher volume in both segments ($110.3 million, or 25%), favorable changes in foreign currency exchange rates ($36.0 million, or 8%) price increases ($10.8 million, or 2%), and the acquisition of ILMVAC in the third quarter of 2010 ($4.1 million, or 1%).

     Revenues in the Industrial Products Group increased $59.2 million, or 22%, to $327.8 million in the second quarter of 2011, compared to $268.6 million in the second quarter of 2010. This increase reflects higher volume (11%), favorable changes in foreign currency exchange rates (9%) and price increases (2%). The volume increase was attributable to ongoing improvement in demand for OEM products, compressors and aftermarket parts and services on a global basis. Strong growth was experienced in all major geographic regions.

     Revenues in the Engineered Products Group increased $101.9 million, or 56%, to $282.8 million in the second quarter of 2011, compared to $180.9 million in the second quarter of 2010. This increase reflects higher volume (45%), favorable changes in foreign currency exchange rates (6%), price increases (3%) and the acquisition of ILMVAC (2%). The volume increase reflected strong demand for drilling and well servicing pumps, engineered packages, medical OEM products and loading arms.

Gross Profit

     Gross profit increased $58.7 million, or 39%, to $210.3 million in the three-month period ended June 30, 2011, compared to $151.6 million in the three-month period ended June 30, 2010, and as a percentage of revenues was 34.4% in 2011, compared to 33.7% in 2010. The increase in gross profit primarily reflects the volume increases discussed above, favorable product mix, cost reductions and favorable changes in foreign currency exchange rates. The improvement in gross profit as a percentage of revenues was due primarily to the benefits of operational improvements, cost reductions, volume leverage and favorable product mix.

Selling and Administrative Expenses

     Selling and administrative expenses increased $13.3 million, or 14%, to $105.0 million in the second quarter of 2011, compared to $91.7 million in the second quarter of 2010. This increase reflects unfavorable changes in foreign currency exchange rates ($7.2 million), higher compensation and benefit expenses and the acquisition of ILMVAC ($0.9 million), partially offset by cost reductions. As a percentage of revenues, selling and

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administrative expenses improved to 17.2% in the second quarter of 2011 compared to 20.4% in the second quarter of 2010, primarily as a result of cost reductions and leverage from higher revenues.

Other Operating Expense, Net

     Other operating expense, net, was $6.1 million in the second quarter of 2011 and $3.3 million in the second quarter of 2010. Net foreign currency losses of $1.3 million recorded in the second quarter of 2011 reflected the effect of the weakening of the USD against primarily the EUR and GBP on the Company’s financial instruments denominated in the EUR and GBP, and compare with net losses of $0.4 million in the second quarter of 2010. Restructuring charges of $3.0 million in the second quarter of 2011 were primarily associated with facility consolidations in Europe and compare with charges of $1.3 million recorded in the second quarter of 2010.

Operating Income

     Operating income of $99.2 million in the second quarter of 2011 increased $42.6 million, or 75%, compared to $56.6 million in the second quarter of 2010. Operating income as a percentage of revenues in the second quarter of 2011 was 16.2% compared to 12.6% in the second quarter of 2010. This improvement was due primarily to incremental profitability on revenue growth, favorable product mix and the benefits of operational improvements previously implemented. Charges associated with profit improvement initiatives and other items totaled $5.2 million, or 0.9% of revenues, in 2011 and $1.8 million, or 0.4% of revenues, in 2010.

     The Industrial Products Group generated segment operating income and segment operating margin of $34.3 million and 10.5%, respectively, in the second quarter of 2011, compared to $20.2 million and 7.5%, respectively, in the second quarter of 2010 (see Note 15 “Segment Results” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q for a reconciliation of segment operating income to consolidated income before tax). The year over year improvement in operating income and operating margin was primarily attributable to incremental profit on revenue growth and cost reductions. Charges associated with profit improvement initiatives and other items totaled $4.1 million, or 1.2% of revenues, in 2011 and $3.0 million, or 1.1% of revenues, in 2010.

     The Engineered Products Group generated segment operating income and segment operating margin of $64.8 million and 22.9%, respectively, in the second quarter of 2011, compared to $36.4 million and 20.1%, respectively, in the second quarter of 2010 (see Note 15 “Segment Results” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q for a reconciliation of segment operating income to consolidated income before tax). The year over year improvement in operating income and operating margin was primarily attributable to incremental profit on revenue growth, favorable product mix and cost reductions. Charges associated with profit improvement initiatives and other items totaled $1.1 million, or 0.4% of revenues, in 2011 and a credit of $1.2 million, or 0.6% of revenues, in 2010.

Interest Expense

     Interest expense of $3.9 million in the second quarter of 2011 decreased $2.2 million from $6.1 million in the second quarter of 2010 due to lower average borrowings and a lower weighted average interest rate. The year over year reduction in borrowings was primarily due to the redemption in the second quarter of 2011 of all $125.0

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million in aggregate principal of the Company’s outstanding 8% Senior Subordinated Notes due in 2013 (the “Senior Subordinated Notes”). The weighted average interest rate, including the amortization of debt issuance costs, decreased to 6.0% in the second quarter of 2011 compared to 7.3% in the second quarter of 2010, also due primarily to the redemption of the Senior Subordinated Notes.

Provision for Income Taxes

     The provision for income taxes was $27.3 million and the effective tax rate was 28.7% in the second quarter of 2011, compared to $12.6 million and 24.9%, respectively, in the second quarter of 2010. The year over year increase in the provision reflects higher taxable income, and the increase in the effective tax rate primarily reflects a higher proportion of taxable income in the U.S. in 2011 compared to 2010.

Net Income Attributable to Gardner Denver

     Net income attributable to Gardner Denver of $67.1 million and diluted earnings per share (“DEPS”) of $1.27 in the second quarter of 2011 compares with net income attributable to Gardner Denver and DEPS of $37.3 million and $0.71, respectively, in the second quarter of 2010. This improvement reflects the net effect of the operating income, interest expense and income tax factors discussed above. Results in the second quarter of 2011 included charges for profit improvement initiatives and other items totaling $3.7 million after income taxes, or $0.08 on a diluted per share basis. Results in the second quarter of 2010 included net charges for profit improvement initiatives and other items totaling $1.3 million after income taxes, or $0.02 on a diluted per share basis.

Performance during the Six Months Ended June 30, 2011 Compared
with the Six Months Ended June 30, 2010

Revenues

     Revenues increased $270.8 million, or 31%, to $1,142.5 million in the six-month period ended June 30, 2011, compared to $871.7 million in the six-month period ended June 30, 2010. This increase was attributable to higher volume in both segments ($199.8 million, or 23%), favorable changes in foreign currency exchange rates ($42.7 million, or 5%) price increases ($19.8 million, or 2%), and the acquisition of ILMVAC in the third quarter of 2010 ($8.5 million, or 1%).

     Revenues in the Industrial Products Group increased $99.1 million, or 19%, to $614.1 million in the six-month period of 2011, compared to $515.0 million in the six-month period of 2010. This increase reflects higher volume (12%), favorable changes in foreign currency exchange rates (5%) and price increases (2%). The volume increase was attributable to improved demand for OEM products, compressors and aftermarket parts and services on a global basis. Strong growth was experienced in all major geographic regions.

     Revenues in the Engineered Products Group increased $171.9 million, or 48%, to $528.5 million in the six-month period of 2011, compared to $356.6 million in the six-month period of 2010. This increase reflects higher volume (39%), favorable changes in foreign currency exchange rates (4%), price increases (3%) and the

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acquisition of ILMVAC (2%). The volume increase reflected strong demand for engineered packages, medical OEM products, drilling and well servicing pumps and loading arms.

Gross Profit

     Gross profit increased $109.3 million, or 38%, to $394.7 million in the six-month period ended June 30, 2011, compared to $285.4 million in the six-month period ended June 30, 2010, and as a percentage of revenues was 34.5% in 2011, compared to 32.7% in 2010. The increase in gross profit primarily reflects the volume increases discussed above, favorable product mix, cost reductions and favorable changes in foreign currency exchange rates. The improvement in gross profit as a percentage of revenues was due primarily to the benefits of operational improvements, cost reductions, volume leverage and favorable product mix.

Selling and Administrative Expenses

     Selling and administrative expenses increased $21.6 million, or 12%, to $201.0 million in the six-month period ended June 30, 2011, compared to $179.4 million in the six-month period ended June 30, 2010. This increase reflects unfavorable changes in foreign currency exchange rates ($8.4 million), higher compensation and benefit expenses and the acquisition of ILMVAC ($1.9 million), partially offset by cost reductions. As a percentage of revenues, selling and administrative expenses improved to 17.6% in the six-month period of 2011 compared to 20.6% in the six-month period of 2010, primarily as a result of cost reductions and leverage from higher revenues.

Other Operating Expense, Net

     Other operating expense, net, was $7.7 million in the six-month period ended June 30, 2011 and $1.9 million in the six-month period ended June 30, 2010. Net foreign currency losses of $2.6 million recorded in the six-month period of 2011 reflected the effect of the weakening of the USD against primarily the EUR and GBP on the Company’s financial instruments denominated in the EUR and GBP. Net foreign currency gains of $0.6 million recorded in the six-month period of 2010 reflected the effect of the strengthening of the USD against those currencies during the first quarter. Restructuring charges of $4.0 million in the six-month period of 2011 were primarily associated with facility consolidations in Europe and compare with charges of $2.7 million recorded in the six-month period of 2010. Results in 2010 also reflected an insurance settlement received in the first quarter.

Operating Income

     Operating income of $186.0 million in the six-month period ended June 30, 2011 increased $81.9 million, or 79%, compared to $104.1 million in the six-month period ended June 30, 2010. Operating income as a percentage of revenues in the six-month period of 2011 was 16.3% compared to 11.9% in the six-month period of 2010. This improvement was due primarily to incremental profitability on revenue growth, favorable product mix and the benefits of operational improvements previously implemented. Charges associated with profit improvement initiatives and other items totaled $6.9 million, or 0.6% of revenues, in 2011 and $2.8 million, or 0.4% of revenues, in 2010.

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     The Industrial Products Group generated segment operating income and segment operating margin of $65.1 million and 10.6%, respectively, in the six-month period of 2011, compared to $39.7 million and 7.7%, respectively, in the six-month period of 2010 (see Note 15 “Segment Results” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q for a reconciliation of segment operating income to consolidated income before tax). The year over year improvement in operating income and operating margin was primarily attributable to incremental profit on revenue growth and cost reductions. Charges associated with profit improvement initiatives and other items totaled $5.5 million, or 0.9% of revenues, in 2011 and $3.9 million, or 0.8% of revenues, in 2010.

     The Engineered Products Group generated segment operating income and segment operating margin of $120.9 million and 22.9%, respectively, in the six-month period of 2011, compared to $64.3 million and 18.0%, respectively, in the six-month period of 2010 (see Note 15 “Segment Results” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q for a reconciliation of segment operating income to consolidated income before tax). The year over year improvement in operating income and operating margin was primarily attributable to incremental profit on revenue growth, favorable product mix and cost reductions. Charges associated with profit improvement initiatives and other items totaled $1.3 million, or 0.2% of revenues, in 2011 and a credit of $1.1 million, or 0.3% of revenues, in 2010.

Interest Expense

     Interest expense of $9.3 million in the six-month period ended June 30, 2011 decreased $2.9 million from $12.2 million in the six-month period ended June 30, 2010 due to lower average borrowings and a lower weighted average interest rate. The year over year reduction in borrowings was primarily due to the redemption in the second quarter of 2011 of the Senior Subordinated Notes as discussed above. The weighted average interest rate, including the amortization of debt issuance costs, decreased to 6.8% in the six-month period of 2011 compared to 7.1% in the six-month period of 2010, also due primarily to the redemption of the Senior Subordinated Notes in the second quarter of 2011.

Provision for Income Taxes

     The provision for income taxes was $49.8 million and the effective tax rate was 28.1% in the six-month period ended June 30, 2011, compared to $22.3 million and 24.1%, respectively, in the six-month period ended June 30, 2010. The year over year increase in the provision reflects higher taxable income, and the increase in the effective tax rate primarily reflects a higher proportion of taxable income in the U.S. in 2011 compared to 2010.

Net Income Attributable to Gardner Denver

     Net income attributable to Gardner Denver of $126.6 million and DEPS of $2.40 in the six-month period ended June 30, 2011 compares with net income attributable to Gardner Denver and DEPS of $69.3 million and $1.31, respectively, in the six-month period ended June 30, 2010. This improvement reflects the net effect of the operating income, interest expense and income tax factors discussed above. Results in the six-month period of 2011 included charges for profit improvement initiatives and other items totaling $4.9 million after income taxes, or $0.10 on a diluted per share basis. Results in the six-month period of 2010 included net charges for profit improvement initiatives and other items totaling $2.2 million after income taxes, or $0.04 on a diluted per share basis.

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Outlook

     In general, the Company believes that demand for products in its Industrial Products Group tends to correlate with the rate of total industrial capacity utilization and the rate of change of industrial production because compressed air is often used as a fourth utility in the manufacturing process. Capacity utilization rates above 80% have historically indicated a good demand environment for industrial equipment such as compressor and vacuum products. Over longer time periods, the Company believes that demand also tends to follow economic growth patterns indicated by the rates of change in the gross domestic product around the world.

     In the second quarter of 2011, orders in the Industrial Products Group increased $41.8 million, or 15%, to $323.7 million, compared to $281.9 million in the second quarter of 2010. This increase reflected on-going improvement in demand for OEM products, compressors and aftermarket parts and services, with growth realized in all major geographic regions ($17.6 million, or 6%), and the favorable effect of changes in foreign currency exchange rates ($24.2 million, or 9%). Order backlog for the Industrial Products Group increased 20% to $254.5 million as of June 30, 2011 from $211.7 million at December 31, 2010 due primarily to the growth in orders as discussed above ($32.9 million, or 15%) and the favorable effect of changes in foreign currency exchange rates ($9.9 million, or 5%). Order backlog for the Industrial Products Group as of June 30, 2011 increased 19% compared to $213.1 million as of June 30, 2010, due primarily to the growth in orders ($17.8 million, or 8%) and favorable changes in foreign currency exchange rates ($23.6 million, or 11%). The Company currently expects continued revenue growth in the Industrial Products Group as a result of healthy demand in its core end markets as well as strong growth in emerging markets such as China. It expects that global capacity utilization will remain steady in 2011, resulting in sustained levels of manufacturing spending and investment in customer plants, and that this growth will drive demand for compressors, blowers, vacuum products and opportunities for replacement parts and services.

     Orders for products in the Engineered Products Group have historically corresponded to demand for petrochemical products and been influenced by prices for oil and natural gas, and rig count, among other factors, which the Company cannot predict. Revenues for Engineered Products depend more on existing backlog levels than revenues for Industrial Products. Many of these products are used in process applications, such as oil and gas refining and chemical processing, which are industries that typically experience increased demand very late in economic cycles.

     Orders in the Engineered Products Group increased 43% to $313.3 million in the second quarter of 2011, compared to $218.4 million in the second quarter of 2010, due to strong demand for drilling and well servicing pumps and engineered packages ($80.8 million, or 36%), the acquisition of ILMVAC ($3.8 million, or 2%) and the favorable effect of changes in foreign currency exchange rates ($10.3 million, or 5%). Order backlog for the Engineered Products Group increased 25% to $427.2 million as of June 30, 2011 from $341.8 million at December 31, 2010 due primarily to the growth in orders ($74.1 million, or 22%) and the favorable effect of changes in foreign currency exchange rates ($11.3 million, or 3%). Order backlog for the Engineered Products Group as of June 30, 2011 increased 65% compared to $259.3 million as of June 30, 2010, primarily as a result of the growth in orders ($141.9 million, or 55%), the favorable effect of changes in foreign currency exchange rates ($24.6 million, or 9%) and the acquisition of ILMVAC ($1.4 million, or 1%).

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Demand for well servicing pumps and aftermarket fluid ends continue to grow as shale activity increases, and the Company is investing in additional capacity to meet this growth. Additionally, demand for engineered packages and OEM compressors remains strong.

     Order backlog consists of orders believed to be firm for which a customer purchase order has been received or communicated. However, since orders may be rescheduled or canceled, order backlog is not necessarily indicative of future revenue levels.

Liquidity and Capital Resources

Operating Working Capital

     During the six-month period ended June 30, 2011, net working capital (defined as total current assets less total current liabilities) increased to $483.9 million from $468.9 million at December 31, 2010. Operating working capital (defined as accounts receivable plus inventories, less accounts payable and accrued liabilities) increased $45.8 million to $334.8 million from $289.0 million at December 31, 2010 due to higher accounts receivable ($75.9 million) and inventory ($58.0 million), partially offset by higher accounts payable ($63.5 million) and accrued liabilities ($24.6 million). The increase in accounts receivable was due primarily to higher revenues, the timing of shipments within the second quarter and the effect of changes in foreign currency exchange rates ($14.5 million). Days sales in receivables increased to 66 at June 30, 2011 from 64 at December 31, 2010 due primarily to the timing of shipments within the second quarter, and were down from 69 days at June 30, 2010. The increase in inventory primarily reflects growth attributable to increases in both orders and backlog during the first six months of 2011 and the effect of changes in foreign currency exchange rates ($10.7 million). Inventory turns were 5.3 in the second quarter of 2011, compared with 5.8 in the fourth quarter of 2010 and 5.4 in the second quarter of 2010. The impact of growth in orders and backlog on inventory turns was partially offset by productivity improvements. Inventory turns improved in the second quarter of 2011 from 4.7 in the first quarter of 2011. The increase in accounts payable and accrued liabilities was due primarily to the timing of payments to vendors, higher customer advance payments, accrued income taxes and product warranty, and the effect of changes in foreign currency exchange rates.

Cash Flows

     Cash provided by operating activities of $114.5 million in the six-month period ended June 30, 2011 increased $46.9 million from $67.6 million in the six-month period ended June 30, 2010. This improvement was primarily due to higher net income (excluding non-cash charges for depreciation and amortization and unrealized foreign currency transaction gains and losses) and lower cash used by operating working capital in 2011 compared to 2010. Operating working capital used cash of $37.8 million in the six-month period of 2011 and $40.4 million in the six-month period of 2010. Cash used in accounts receivable of $61.5 million and $36.2 million in the six-month periods of 2011 and 2010, respectively, reflected increased sales and the timing of shipments within both periods. Cash used in inventory of $47.3 million and $10.8 million in the six-month periods of 2011 and 2010, respectively, reflected the growth in orders and backlog during the six-month period of

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each year. Changes in accounts payable and accrued expenses generated cash of $71.0 million in the six-month period of 2011 and $6.6 million in the six-month period of 2010. The year over year improvement was due primarily to the timing of payments to vendors in 2011 and higher employee termination benefit payments in 2010.

     Net cash used in investing activities of $22.2 million and $11.2 million in the six-month periods of 2011 and 2010, respectively, consisted primarily of capital expenditures on assets intended to increase production output to meet improving demand and reduce costs. The Company currently expects capital expenditures to total approximately $50 million for the full year 2011. As a result of the Company’s application of lean principles, non-capital or less capital-intensive solutions are often utilized in process improvement initiatives and capital replacement. Capital expenditures related to environmental projects have not been significant in the past and are not expected to be significant in the foreseeable future.

     Net cash used in financing activities of $132.5 million in the six-month period of 2011 compares with $46.7 million used in the six-month period of 2010. Cash provided by operating activities was used for net repayments of short-term and long-term borrowings totaling $108.4 million in the six-month period of 2011 and $34.2 million in the six-month period of 2010. The Company’s redemption of its Senior Subordinated Notes (aggregate principal of $125.0 million) in the second quarter of 2011 was funded with available cash of $55.0 million and borrowings under its revolving credit facility of $70.0 million. Cash used for the repurchase of shares of the Company’s common stock totaled $6.2 million and $17.9 million in the six-month periods of 2011 and 2010, respectively, including shares exchanged or surrendered in connection with its stock option plans of $0.9 million in 2011 and $0.2 million in 2010. During the second quarter of 2011, the Company placed RMB 122.0 million (approximately $18.8 million based on exchange rates at the date of payment) into escrow with the Shanghai United Assets and Equity Exchange pending finalization of certain Chinese governmental approvals of its purchase of the equity interests of the minority shareholders of its two joint ventures in China. The transaction is expected to close during the third quarter of 2011 and will be accounted for by the Company as an equity transaction, at which time the non-controlling interests associated with these two joint ventures will be eliminated from its consolidated statements of operations and balance sheet. Cash dividends paid were $5.2 million ($0.10 per common share) in the six-month periods of both years.

Share Repurchase Program

     In November 2008, the Company’s Board of Directors authorized a share repurchase program to acquire up to 3.0 million shares of the Company’s outstanding common stock, of which approximately 2.1 million shares remain available for repurchase as of June 30, 2011.

Liquidity

     The Company’s debt to total capital ratio (defined as total debt divided by the sum of total debt plus total stockholders’ equity) was 12.0% as of June 30, 2011 compared to 19.5% as of December 31, 2010. This decrease primarily reflects a $101.6 million net decrease in borrowings between these two dates, including the effect of the redemption of the Senior Subordinated Notes.

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     The Company’s primary cash requirements include working capital, capital expenditures, principal and interest payments on indebtedness, cash dividends on its common stock, selective acquisitions and any stock repurchases. The Company’s primary sources of funds are its ongoing net cash flows from operating activities and availability under its Revolving Line of Credit (as defined below). At June 30, 2011, the Company had cash and cash equivalents of $121.3 million, of which $3.3 million was pledged to financial institutions as collateral to support issued standby letters of credit and similar instruments. The Company also had $261.8 million of unused availability under its Revolving Line of Credit at June 30, 2011. Based on the Company’s financial position at June 30, 2011 and its pro-forma results of operations for the twelve months then ended, the unused availability under its Revolving Line of Credit would not have been limited by the financial ratio covenants in the 2008 Credit Agreement (as described below).

     On September 19, 2008, the Company entered into the 2008 Credit Agreement consisting of (i) a $310.0 million Revolving Line of Credit (the “Revolving Line of Credit”), (ii) a $180.0 million term loan (“U.S. Dollar Term Loan”) and (iii) a €120.0 million term loan (“Euro Term Loan”). In addition, the 2008 Credit Agreement provides for a possible increase in the Revolving Line of Credit of up to $200.0 million.

     On October 15 and 16, 2008, the Company borrowed $200.0 million and £40.0 million, respectively, pursuant to the Revolving Line of Credit. This amount was used by the Company, in part to retire the outstanding balances under its previous credit agreement, at which point it was terminated, and in part to pay a portion of the cash purchase price of the Company’s acquisition of CompAir. On October 17, 2008, the Company borrowed $180.0 million and €120.0 million pursuant to the U.S. Dollar Term Loan and the Euro Term Loan, respectively. These facilities, together with a portion of the borrowing under the Revolving Line of Credit and existing cash, were used to pay the cash portion of the CompAir acquisition.

     The interest rates per annum applicable to loans under the 2008 Credit Agreement are, at the Company’s option, either a base rate plus an applicable margin percentage or a Eurocurrency rate plus an applicable margin. The base rate is the greater of (i) the prime rate or (ii) one-half of 1% over the weighted average of rates on overnight federal funds as published by the Federal Reserve Bank of New York. The Eurocurrency rate is LIBOR.

     The initial applicable margin percentage over LIBOR under the 2008 Credit Agreement was 2.5% with respect to the term loans and 2.1% with respect to loans under the Revolving Line of Credit, and the initial applicable margin percentage over the base rate was 1.25% with respect to floating rate loans. After the Company’s delivery of its financial statements and compliance certificate for each fiscal quarter, the applicable margin percentages are subject to adjustments based upon the ratio of the Company’s consolidated total debt to consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (each as defined in the 2008 Credit Agreement) being within certain defined ranges. The applicable margin percentage over LIBOR was adjusted down during the third quarter of 2010. At June 30, 2011, the applicable margin percentage over LIBOR under the 2008 Credit Agreement was 2.0% with respect to the term loans and 1.65% with respect to loans under the Revolving Line of Credit, and the applicable margin percentage over the base rate was 0.75% with respect to floating rate loans.

     The obligations under the 2008 Credit Agreement are guaranteed by the Company’s existing and future domestic subsidiaries. The obligations under the 2008 Credit Agreement are also secured by a pledge of the capital stock of each of the Company’s existing and future material domestic subsidiaries, as well as 65% of the capital stock of each of the Company’s existing and future first-tier material foreign subsidiaries.

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     The 2008 Credit Agreement includes customary covenants. Subject to certain exceptions, these covenants restrict or limit the ability of the Company and its subsidiaries to, among other things: incur liens; engage in mergers, consolidations and sales of assets; incur additional indebtedness; pay dividends and redeem stock; make investments (including loans and advances); enter into transactions with affiliates, make capital expenditures and incur rental obligations. In addition, the 2008 Credit Agreement requires the Company to maintain compliance with certain financial ratios on a quarterly basis, including a maximum total leverage ratio test and a minimum interest coverage ratio test. As of June 30, 2011, the Company was in compliance with each of the financial ratio covenants under the 2008 Credit Agreement.

     The 2008 Credit Agreement contains customary events of default, including upon a change of control. If an event of default occurs, the lenders under the 2008 Credit Agreement will be entitled to take various actions, including the acceleration of amounts due under the 2008 Credit Agreement.

     The U.S. Dollar and Euro Term Loans have a final maturity of October 15, 2013. The U.S. Dollar Term Loan requires quarterly principal payments aggregating approximately $8.1 million, $25.4 million and $34.6 million in fiscal years 2011 through 2013, respectively. The Euro Term Loan requires quarterly principal payments aggregating approximately €5.3 million, €16.5 million and €22.5 million in fiscal years 2011 through 2013, respectively.

     The Revolving Line of Credit also matures on October 15, 2013. Loans under this facility may be denominated in USD or several foreign currencies and may be borrowed by the Company or two of its foreign subsidiaries as outlined in the 2008 Credit Agreement.

     As discussed above, the Company redeemed its $125.0 million 8% Senior Subordinated Notes during the second quarter of 2011. The Senior Subordinated Notes had a fixed annual interest rate of 8% and were guaranteed by certain of the Company’s domestic subsidiaries (the “Guarantors”). The Senior Subordinated Notes were redeemed on May 2, 2011 for a total of $125.0 million, consisting of the redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of redemption.

     Management currently expects that the Company’s cash on hand and future cash flows from operating activities will be sufficient to fund its working capital, capital expenditures, scheduled principal and interest payments on indebtedness, cash dividends on its common stock and any stock repurchases for at least the next twelve months, and believes that its overall liquidity position, including availability under the Revolving Line of Credit, is adequate. The Company continues to consider acquisition opportunities, but the size and timing of any future acquisitions and the related potential capital requirements cannot be predicted. In the event that suitable businesses are available for acquisition upon acceptable terms, the Company may obtain all or a portion of the necessary financing through the incurrence of additional long-term borrowings.

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Contractual Obligations and Commitments

     The following table and accompanying disclosures summarize the Company’s significant contractual obligations at June 30, 2011 and the effect such obligations are expected to have on its liquidity and cash flow in future periods:

			Payments Due by Period
			Balance						After
(Dollars in millions)	Total		of 2011		2012—2013		2014—2015		2015
Contractual Cash Obligations
Debt	$	178.0	$	17.9	$	156.2	$	0.9	$	3.0
Estimated interest payments (1)		23.0		4.7		11.6		2.5		4.2
Capital leases		8.3		0.5		0.9		2.9		4.0
Operating leases		82.6		13.9		34.9		16.2		17.6
Purchase obligations (2)		341.0		313.2		27.6		—		0.2
Total	$	632.9	$	350.2	$	231.2	$	22.5	$	29.0

(1)

Estimated interest payments for long-term debt were calculated as follows: for fixed-rate debt and term debt, interest was calculated based on applicable rates and payment dates; for variable-rate debt and/or non-term debt, interest rates and payment dates were estimated based on management’s determination of the most likely scenarios for each relevant debt instrument.

(2)

Purchase obligations consist primarily of agreements to purchase inventory or services made in the normal course of business to meet operational requirements. The purchase obligation amounts do not represent the entire anticipated purchases in the future, but represent only those items for which the Company is contractually obligated as of June 30, 2011. For this reason, these amounts will not provide a complete and reliable indicator of the Company’s expected future cash outflows.

     The above table does not include the Company’s total pension and other postretirement benefit liabilities and net deferred income tax liabilities recognized on the consolidated balance sheet as of June 30, 2011 because such liabilities, due to their nature, do not represent expected liquidity needs. There have not been material changes to such liabilities or the Company’s minimum pension funding obligations other than as disclosed in Note 6 “Pension and Other Postretirement Benefits” and Note 12 “Income Taxes” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q. Also please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

     In the normal course of business, the Company or its subsidiaries may sometimes be required to provide surety bonds, standby letters of credit or similar instruments to guarantee its performance of contractual or legal obligations. As of June 30, 2011, the Company had $76.0 million in such instruments outstanding and had pledged $3.3 million of cash to the issuing financial institutions as collateral for such instruments.

Contingencies

     Refer to Note 14 “Contingencies” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for a description of various legal proceedings, lawsuits and administrative actions.

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New Accounting Standards

     Refer to Note 1 “Summary of Significant Accounting Policies” in the “Notes to Condensed Consolidated Financial Statements” included in this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for a description of new accounting pronouncements, including the expected impact on the Company’s Condensed Consolidated Financial Statements and related disclosures.

Critical Accounting Policies and Estimates

     Management has evaluated the accounting policies used in the preparation of the Company’s condensed financial statements and related notes and believes those policies to be reasonable and appropriate. Certain of these accounting policies require the application of significant judgment by management in selecting appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on historical experience, trends in the industry, information provided by customers and information available from other outside sources, as appropriate. The most significant areas involving management judgments and estimates may be found in the Company’s 2010 Annual Report on Form 10-K, filed on February 28, 2011, in the Critical Accounting Policies and Estimates section of Management’s Discussion and Analysis and in Note 1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements.” There were no significant changes to the Company’s critical accounting policies during the quarter ended June 30, 2011.

Cautionary Statement Regarding Forward-Looking Statements

     All of the statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” other than historical facts, are forward-looking statements, including, without limitation, the statements made under the caption “Outlook.” As a general matter, forward-looking statements are those focused upon anticipated events or trends, expectations, and beliefs relating to matters that are not historical in nature. The words “could,” “anticipate,” “preliminary,” “expect,” “believe,” “estimate,” “intend,” “plan,” “will,” “foresee,” “project,” “forecast,” or the negative thereof or variations thereon, and similar expressions identify forward-looking statements.

     The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for these forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that forward-looking statements are subject to known and unknown risks, uncertainties and other factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company. These known and unknown risks, uncertainties and other factors could cause actual results to differ materially from those matters expressed in, anticipated by or implied by such forward-looking statements.

     These risks, uncertainties and other factors include, but are not limited to: (1) the Company’s exposure to the risks associated with future global economic down turns, which may negatively impact its revenues, liquidity, suppliers and customers; (2) exposure to cycles in specific markets, particularly the level of oil and natural gas prices and oil and natural gas drilling production, which affect demand for the Company’s petroleum products,

38

and industrial production and manufacturing capacity utilization rates, which affect demand for the Company’s industrial products; (3) the risks associated with competition in the Company’s market segments, particularly the pricing of the Company’s products; (4) the risks of large or rapid increases in raw material costs or substantial decreases in their availability, and the Company’s dependence on particular suppliers, particularly copper, aluminum, iron casting and other metal suppliers; (5) economic, political and other risks associated with the Company’s international sales and operations, including changes in currency exchange rates (primarily between the USD, the EUR, the GBP and the CNY); (6) the risks associated with the potential loss of key customers for petroleum products and the potential resulting negative impact on the Company’s profitability and cash flows; (7) the risks associated with potential product liability and warranty claims due to the nature of the Company’s products; (8) the risks that the Company will not realize the expected financial benefits from potential future restructuring actions; (9) the ability to attract and retain quality executive management and other key personnel; (10) the risk that communication or information systems failure may disrupt the Company’s business and result in financial loss and liability to its customers; (11) the ability to avoid employee work stoppages and other labor difficulties; (12) the risks associated with potential changes in shale oil and gas regulation; (13) the risks associated with pending asbestos and silica personal injury lawsuits; (14) the risk of non-compliance with U.S. and foreign laws and regulations applicable to the Company’s international operations, including the U.S. Foreign Corrupt Practices Act and other similar laws; (15) the risks associated with environmental compliance costs and liabilities, including the compliance costs and liabilities of future climate change regulations; (16) the risks associated with enforcing the Company’s intellectual property rights and defending against potential intellectual property claims; (17) the risk of possible future charges if the Company determines that the value of goodwill and other intangible assets, representing a significant portion of the Company’s total assets, are impaired; (18) risks associated with the Company’s indebtedness and changes in the availability or costs of new financing to support the Company’s operations and future investments; (19) the ability to continue to identify and complete strategic acquisitions and effectively integrate such acquired companies to achieve desired financial benefits; and (20) changes in discount rates used for actuarial assumptions in pension and other postretirement obligation and expense calculations and market performance of pension plan assets. The foregoing factors should not be construed as exhaustive and should be read together with important information regarding risks and factors that may affect the Company’s future performance set forth under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

     These statements reflect the current views and assumptions of management with respect to future events. The Company does not undertake, and hereby disclaims, any duty to update these forward-looking statements, even though its situation and circumstances may change in the future. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this report. The inclusion of any statement in this report does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     The Company is exposed to certain market risks during the normal course of business arising from adverse changes in commodity prices, interest rates, and currency exchange rates. The Company’s exposure to these risks is managed through a combination of operating and financing activities. The Company selectively uses derivative financial instruments (“derivatives”), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in currency exchange rates and interest rates. The Company does not hold

39

derivatives for trading or speculative purposes. Fluctuations in commodity prices, interest rates, and currency exchange rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

     Notional transaction amounts and fair values for the Company’s outstanding derivatives, by risk category and instrument type, as of June 30, 2011 and December 31, 2010, are summarized in Note 11 “Hedging Activities and Fair Value Measurements” in the “Notes to Condensed Consolidated Financial Statements.”

Commodity Price Risk

     The Company is a purchaser of certain commodities, principally aluminum. In addition, the Company is a purchaser of components and parts containing various commodities, including cast iron, aluminum, copper and steel. The Company generally buys these commodities and components based upon market prices that are established with the vendor as part of the purchase process. The Company does not use commodity financial instruments to hedge commodity prices.

     The Company has long-term contracts with some of its suppliers of key components. However, to the extent that commodity prices increase and the Company does not have firm pricing from its suppliers, or its suppliers are not able to honor such prices, then the Company may experience margin declines to the extent it is not able to increase selling prices of its products.

Interest Rate Risk

     The Company’s exposure to interest rate risk results primarily from its borrowings of $186.3 million at June 30, 2011. The Company manages its debt centrally, considering tax consequences and its overall financing strategies. The Company manages its exposure to interest rate risk by maintaining a mixture of fixed and variable rate debt and uses pay-fixed interest rate swaps as cash flow hedges of variable rate debt in order to adjust the relative proportions. The interest rates on approximately 46% of the Company’s borrowings were effectively fixed as of June 30, 2011. If the relevant LIBOR amounts for all of the Company’s borrowings had been 100 basis points higher than actual in the six-month period ended June 30, 2011, the Company’s interest expense would have increased by $0.6 million.

Exchange Rate Risk

     A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the U.S. in currencies other than the USD. Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. Other than the USD, the EUR, GBP, and CNY are the principal currencies in which the Company and its subsidiaries enter into transactions.

     The Company is exposed to the impacts of changes in currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities, and earnings into USD. The Company partially offsets these exposures by having certain of its non-U.S. subsidiaries act as the obligor on a portion of its borrowings and by denominating such borrowings, as well as a portion of the borrowings for which the Company is the obligor, in currencies other than the USD. Borrowings by the Company’s non-U.S. subsidiaries at June 30, 2011 totaled $18.0 million, and the Company’s consolidated borrowings denominated in currencies other than the USD totaled

40

$82.2 million. Fluctuations due to changes in currency exchange rates in the value of non-USD borrowings that have been designated as hedges of the Company’s net investment in foreign operations are included in other comprehensive income.

     The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly. The Company also selectively uses forward currency contracts to manage this risk. At June 30, 2011, the notional amount of open forward currency contracts was $98.2 million and their aggregate fair value was a liability of $1.7 million.

     To illustrate the impact of currency exchange rates on the Company’s financial results, the Company’s operating income for the six-month period ended June 30, 2011 would have decreased by approximately $10.0 million if the USD had been 10% more valuable than actual relative to other currencies. This calculation assumes that all currencies change in the same direction and proportion to the USD and that there are no indirect effects of the change in the value of the USD such as changes in non-USD sales volumes or prices.

Item 4. Controls and Procedures

     The Company’s management carried out an evaluation (as required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), with the participation of the President and Chief Executive Officer and the Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon this evaluation, the President and Chief Executive Officer and Vice President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q, such that the information relating to the Company and its consolidated subsidiaries required to be disclosed by the Company in the reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

     In addition, the Company’s management carried out an evaluation, as required by Rule 13a-15(d) of the Exchange Act, with the participation of the President and Chief Executive Officer and the Vice President and Chief Financial Officer, of changes in the Company’s internal control over financial reporting. Based on this evaluation, the President and Chief Executive Officer and the Vice President and Chief Financial Officer concluded that there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2011 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

     The Company is a party to various legal proceedings and administrative actions. The information regarding these proceedings and actions is included under Note 14 “Contingencies” to the Company’s Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

     For information regarding factors that could affect the Company’s results of operations, financial condition and liquidity, see (i) the risk factors discussion provided under Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and (ii) the “Cautionary Statement Regarding Forward-Looking Statements” included in Part I, Item 2 of this Quarterly Report on Form 10-Q, which are incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     Repurchases of equity securities during the three months ended June 30, 2011 are listed in the following table.

					Total Number of		Maximum Number
					Shares Purchased		of Shares that May
	Total Number		Average Price		as Part of Publicly		Yet Be Purchased
	of Shares		Paid per		Announced Plans		Under the Plans or
Period	Purchased(1)		Share(2)		or Programs(3)		Programs(3)
April 1, 2011 — April 30, 2011		—		—		—		2,104,987
May 1, 2011 — May 31, 2011		—		—		—		2,104,987
June 1, 2011 — June 30, 2011		—		—		—		2,104,987
Total		—		—		—		2,104,987

(1)	Includes shares exchanged or surrendered in connection with the exercise or vesting of equity awards under Gardner Denver’s Amended and Restated Long-Term Incentive Plan.
(2)	Excludes commissions.
(3)	In November 2008, the Board of Directors authorized the Company to acquire up to 3.0 million shares of its common stock. As of June 30, 2011, 895,013 shares had been repurchased under this repurchase program.

Item 5. Other Information

     As previously disclosed in a Form 8-K filed by the Company with the Securities and Exchange Commission on May 6, 2011, at the Company’s 2011 Annual Meeting of Stockholders held on May 3, 2011, the final voting results for Proposal 4 — Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation —were 32,189,171 shares for “ONE YEAR,” 254,319 shares for “TWO YEARS,” 13,489,100 shares for “THREE YEARS,” 192,839 ABSTENTIONS, and 2,082,294 BROKER NON-VOTES. As a result of the stockholders’

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recommendation with respect to Proposal 4, the Company’s Board of Directors has determined that the Company will hold a stockholder advisory vote on the compensation of the Company’s named executive officers once every year until the next required vote on the frequency of stockholder votes on the compensation of the Company’s named executive officers as required pursuant to Section 14(A) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

     The information in this Item 5 is being disclosed by the Company in reliance upon Item 5(a) of Part II of Form 10-Q and Instruction B.3 of Form 8-K.

Item 6. Exhibits

     See the list of exhibits in the Index to Exhibits to this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GARDNER DENVER, INC. (Registrant)
Date: August 4, 2011	By:	/s/ Barry L. Pennypacker
		Barry L. Pennypacker
		President and Chief Executive Officer
Date: August 4, 2011	By:	/s/ Michael M. Larsen
		Michael M. Larsen
		Vice President and Chief Financial Officer
Date: August 4, 2011	By:	/s/ David J. Antoniuk
		David J. Antoniuk
		Vice President and Corporate Controller (Principal Accounting Officer)

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GARDNER DENVER, INC.

INDEX TO EXHIBITS

Exhibit
No.	Description
3.1	Certificate of Incorporation of Gardner Denver, Inc., as amended on May 3, 2006, filed as Exhibit 3.1 to Gardner Denver, Inc.’s Current Report on Form 8-K, filed May 3, 2006, and incorporated herein by reference.
3.2	Amended and Restated Bylaws of Gardner Denver, Inc., filed as Exhibit 3.2 to Gardner Denver, Inc.’s Current Report on Form 8-K, filed August 4, 2008, and incorporated herein by reference.
4.1	Amended and Restated Rights Agreement, dated as of January 17, 2005, between Gardner Denver, Inc. and National City Bank as Rights Agent, filed as Exhibit 4.1 to Gardner Denver, Inc.’s Current Report on Form 8-K, filed January 21, 2005, and incorporated herein by reference.
4.2	Amendment No. 1 to the Amended and Restated Rights Agreement, dated as of October 29, 2009, between Gardner Denver, Inc. and Wells Fargo Bank, National Association as Rights Agent, filed as Exhibit 4.2 to Gardner Denver, Inc.’s Current Report on Form 8-K, filed October 29, 2009, and incorporated herein by reference.
10.1*	Waiver and Release Agreement, dated as of June 3, 2011, between Gardner Denver, Inc. and Armando L. Castorena.
10.2*	Offer Letter, dated as of April 7, 2011, between Gardner Denver, Inc. and Christopher R. Celtruda.
31.1*	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS§	XBRL Instance Document
101.SCH§	XBRL Taxonomy Extension Schema Document
101.CAL§	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB§	XBRL Taxonomy Extension Label Linkbase Document
101.PRE§	XBRL Taxonomy Extension Presentation Linkbase Document

45

*	Filed herewith.
**	This exhibit is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
§	These exhibits are furnished herewith. In accordance with Rule 406T of Regulation S-T, these exhibits are not deemed to be filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are not deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

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EX-10.1

Exhibit 10.1

Waiver and Release Agreement
Page 1 of 4

WAIVER AND RELEASE AGREEMENT

     I, Armando L. Castorena, understand my last day of employment with Gardner Denver, Inc. (“GDI”) is May 10, 2011 (“Termination of Employment Date”), and I accept the following, which GDI promises to me, in consideration for the promises I make in this Waiver and Release Agreement (this “Agreement”):

• Payment of the sum of Four Hundred Fifty Five Thousand Seven Hundred Ninety Nine Dollars ($455,799), to be made payable to me in lump sum, less applicable withholdings, payable no earlier than the first practicable payroll date occurring at least eight (8) days after my acceptance of and signature on this Agreement;

• Payment of a sum equivalent to twelve (12) months of COBRA medical insurance premiums, to be made payable to me in lump sum, less applicable withholdings, payable no earlier than the first practicable payroll date occurring at least eight (8) days after my acceptance of and signature on this Agreement; and

• Other Benefits:

• My eligibility and right to payment under the GDI retirement savings plan and supplemental excess defined contribution plan will be governed exclusively by the terms and conditions of applicable plan document(s), using my Termination of Employment Date as my separation from service and/or termination date as such is defined in the applicable plan document(s); I understand that my contributions and the company contributions will cease on my Termination of Employment Date.

• Any remaining stock options that have vested prior to my Termination of Employment Date, but have not been exercised by me, may be exercised until August 9, 2011. Thereafter, I have forfeited any vested but unexercised options. Vesting on all unvested options terminates on my Termination of Employment Date, except that all unvested options which are scheduled to vest on September 15, 2011 will be treated as vested, effective as of that date and once vested may be exercised until December 15, 2011. The parties agree that these provisions amend, to the extent required, the applicable award agreements for such awards which otherwise continue to apply.

• Any unvested restricted stock units terminate on my Termination of Employment Date, except that the unvested restricted stock units which are scheduled to vest on September 15, 2011 will be treated as vested, effective as of that date. The parties agree that these provisions amend, to the extent required, the applicable award agreements for such awards which otherwise continue to apply.

• My participation in any GDI bonus plans, including but not limited to the Executive Annual Bonus Plan and the Long-Term Incentive Plan, will cease as of my Termination of Employment Date.

• I understand that I am eligible to receive outplacement services through a firm of my choosing at GDI’s expense (up to an amount no greater than $25,000) to assist me in finding a new position. I further understand GDI also will reimburse me for reasonable travel expenses associated with such outplacement services, subject to the overall $25,000 limit described in the proceding sentence.

1

Waiver and Release Agreement
Page 2 of 4

• Any obligation I have to repay any GDI-paid relocation expenses, reimbursement of relocation expenses, or other relocation benefit, resulting from my separation of service and/or termination from employment with GDI is hereby waived. In addition, GDI will apply the same tax gross-up methodology used to calculate the total federal, state and local tax gross-up’s, as defined in the executive relocation FAQ document that applies to all other executives who report to the CEO and who have relocated to the Philadelphia area. Any remaining tax payments will be made by GDI for my relocation expenses incurred in moving from Quincy, IL to Pennsylvania on or before December 31,2011.

• I understand that I will continue to receive GDI’s executive tax return preparation service regarding my 2011 tax return and tax planning services through Rubin Brown, up to an aggregate amount no greater than $6,000.

• GDI will pay a lump sum of five (5) days of unused vacation.

• I understand that I will have the right to elect COBRA benefits under the GDI medical plan in accordance with federal law.

• I understand that all other company benefits cease on my Termination of Employment Date.

     (1.) Complete and General Release. In consideration for receiving the pay and benefits set forth above, I, for myself and my heirs, agents, executors, administrators, successors and assigns, release, relinquish, waive and forever discharge GDI, its subsidiaries, affiliates and all other related entities; its and their predecessors, successors and assigns; the past, present and future officers, directors, shareholders, trustees, members, employees, attorneys and agents of any of the previously listed entities; any benefits plan maintained by any of the previously listed entities at any time; and the past, present and future sponsors, insurers, trustees, fiduciaries and administrators of such benefit plans (collectively “Released Parties”) from all claims, liabilities, demands and causes of action or suits of any kind, known or unknown, fixed or contingent, of whatsoever kind or nature that I ever had, now have or may claim to have as of the date of the signing of this Agreement, including but not limited to, those arising out of my employment with GDI and my separation from that employment. This Release includes, but is not limited to, a release of the following types of claims:

     (a) Claims of discrimination, harassment or retaliation, whether based on race, color, religion, gender, sex, age, sexual orientation, handicap and/or disability, national origin, whistle blowing or any other legally protected class;

     (b) Claims under the FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. section 621 et seq., and all other federal, state and local laws, statutes and ordinances governing or concerning employment;

     (c) Claims under the Worker Adjustment and Retraining Notification Act;

     (d) Claims under federal, state or local laws, regulations, ordinances or court decisions of any kind;

     (e) Contract claims (whether express or implied);

     (f) Tort claims, including without limitation, wrongful termination, defamation, negligence, invasion of privacy or emotional distress;

2

Waiver and Release Agreement
Page 3 of 4

     (g) Claims under the Family and Medical Leave Act;

     (h) Claims under the Employee Retirement Income Security Act; and

     (i) Claims for attorney’s fees and costs.

     Notwithstanding any other provision of this Release, the following are not barred by this Release; (i) claims relating to the validity of this Release; (ii) claims by either party to enforce this Release; (iii) claims that may arise after the date this Release is signed; and (iv) claims that are not legally waivable. This Release includes all claims for accrued or future wages, salary, or benefits, but does not extend to my right to vested accrued benefits as set forth in the plan documents of GDI governing such benefit programs and the right under federal or state law to continue certain benefit coverages. I understand that any and all claims for, and any rights to, any such vested accrued benefits are governed exclusively by the plan documents of GDI, and that I have no rights or entitlement arising from any contract or any other source to any such benefits from GDI other than as provided by such plan documents as modified or limited by this Agreement

     In addition, this Release will not operate to limit or bar my right to file an administrative charge of discrimination with the Equal Employment Opportunity Commission (EEOC) or to testify, assist or participate in an investigation, hearing or proceeding conducted by the EEOC. However, this Release does bar my right to recover any personal or monetary relief, including if I or anyone on by behalf seeks to file a lawsuit on the same basis as the charge of discrimination.

     (2.) Return of All GDI Property. I agree that on my Termination of Employment Date, I will return to my immediate supervisor all property of GDI, including but not limited to keys, access cards, credit cards, electronics, storage media, machinery, computer files and documents, and any other GDI property in my possession related to GDI’s business or customer information.

     (3.) No Admission of Liability. I acknowledge that this Agreement is not an admission of liability or wrongdoing by GDI or any other Released Party.

     (4.) Confidential and Proprietary Information of the Company. During my employment with GDI, I had access to much of GDI’s confidential information including but not limited to: product margins, product strengths and weaknesses, GDI policies, objectives, strategies, long range plans, plans for market product development, financial information, payroll information, personnel information and other similar information. I agree that I will not disclose any of the confidential information gained in my position with GDI to the advantage of a GDI competitor or to GDI’s disadvantage. I will also continue to abide by all confidentiality restrictions pursuant to other agreements which I have executed with GDI prior to the date of this Agreement.

     (5.) Not-Disparagement/Non-Solicitation. I agree not to disparage, denigrate, or defame GDI and/or related persons, or any of their business products or services. I further agree that I will not, for a period of twelve (12) months following my Termination of Employment Date, solicit, take away, or attempt to take away, directly or indirectly, any customers or employees of the Company, either for myself or as an employee of any person, firm, corporation, or other entity engaged in, or planning to engage in, the manufacture and sale of products and services that are competitive with those of the Company. I acknowledge and agree that my breach of the covenants contained in this Section 5 will cause immediate and irreparable harm to the Company, that the restrictions of this Section 5 are reasonable, and that the Company shall be entitled to injunctive relief to enjoin any continuing breach of this Section 5 and to actual and consequential damages resulting therefrom.

     (6.) Cooperation. I agree that I will cooperate with GDI and its attorneys in the prosecution or defense of any litigation, or matters concerning which litigation subsequently arises, which occurred or

3

Waiver and Release Agreement
Page 4 of 4

accrued during my employment, and I understand that I will be reimbursed for reasonable expenses incurred through such cooperation.

     (7.) Idemnification of Tax Liabiality. I acknowledge and agree that any tax consequence resulting from any payment and benefit described in this Agreement is solely my responsibility, and I further agree to indemnify GDI for any tax liability, penalty, or interest GDI may incur as a result of any such payment and benefit. I further acknowledge that I will be responsible for all federal, state and local taxes incurred in connection with the vesting of unvested restricted stock units on September 15, 2011, and that unless I provide GDI with a payment to satisfy such tax obligations prior to such date, I acknowledge that GDI will withhold a sufficient number of shares associated with such restricted stock units to satisfy all such tax obligations.

     (8.) Consideration Period / Right to Revoke Period. I understand that I have until and including May 31, 2011, a period of twenty-one (21) days to review and consider this Agreement. I may return this Agreement in less than the full consideration period only if my decision to shorten it was knowing and voluntary and was not induced in any way by GDI. I understand that I have a seven-day period after signing this Agreement to revoke or rescind this Agreement. Such revocation must be in writing and directed to Brent A. Walters, 1500 Liberty Ridge Drive, Suite 3000, Wayne, Pennsylvania 19087.

     (9.) Savings Clause. I agree that if any part or provision of this Agreement is deemed by any court to be invalid, void or unenforceable for any reason, the remainder of the terms and provisions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     I hereby acknowledge that I have carefully read and fully understand the provisions of this Agreement. I have not relied upon any other representation or statement, written or oral, except for those set forth in this Agreement, I also hereby acknowledge that GDI has recommended that I consult with an attorney and personal, financial and tax advisors prior to signing this Agreement, and I acknowledge that I have had adequate time to do so. I am entering into this Agreement knowingly and voluntarily and not as a result of any pressure, coercion or duress.

/s/ Armando L. Castorena  

Armando L. Castorena 

Dated: June 3, 2011

Accepted by: GARDNER DENVER, INC.
By:	/s/ Brent A. Walters
	Name:	Brent A. Walters
	Title: V. P. General Councel

Dated: June 3, 2011

4

EX-10.2

Exhibit 10.2

April 7, 2011

Mr. Christopher R. Celtruda
3049 West Cottonwood Lane
Phoenix, AZ 85045

Dear Mr. Celtruda:

This will serve to confirm our recent discussion regarding our offer to you to join Gardner Denver, Inc. as the Vice President of Gardner Denver and President of the Industrial Products Group reporting directly to me and located at Gardner Denver’s new headquarters in Wayne, Pennsylvania in the greater Philadelphia area. This offer is contingent on successful completion of a pre-employment drug screen with acceptable results. Specifically please note the following:

1.	Salary. Your annual base salary will be $350,000. As part of Gardner Denver’s process to get new hires to a common annual salary increase date, any increase to your salary during the 2012 executive salary review would be pro-rated based on your start date.
2.	Executive Annual Bonus Incentive Program. You will be eligible to participate in the Gardner Denver, Inc. Executive Annual Bonus Incentive Program. subject to the terms and conditions of the program. Your target annual incentive is 60% of your base salary. Your annual incentive payout may range from 0% to 200% (max of 120%) of your annual incentive target. Your award for the 2011 plan year will be prorated based on your start date.
	The specific performance objectives and measures for your annual incentive will be defined and reviewed each year and your annual incentive awards will be calculated, approved and paid after financial results have been finalized and awards have been approved by the Management Development and Compensation Committee of the Board of Directors (the “MDCC” or “Compensation Committee”).
3.	Long Term Cash Bonus Plan (LTCB). In addition, the Compensation Committee instituted a long-term cash bonus plan in 2001, which is based on a rolling three (3) year earnings before tax (EBT) performance of the Company’s businesses. Your target long-term bonus opportunity will be 50% of base salary (with a maximum payout of 100% of base salary).
	Your participation in the Long Term Cash Bonus Plan is based on your employment with Gardner Denver. In accordance with the Gardner Denver Long-Term Incentive Plan, you will be eligible for your first full year of participation in 2012, which is 1/3rd (33%) participation in the 2010-2012 LTCB plan, which will result in a 1/3rd payout of the 2010-2012 plan in March 2013. You will have another full years employment participation in 2013, which will result is 2/3rd (66%) participation in the 2011-2013 LTCB plan. You will have another full years employment participation in 2014, which will result is 3/3rd (100%) participation in the 2012-2014 LTCB plan.

Chris Celtruda Offer Letter 4-7-2011 Initial CRC Date 4/8/11

Gardner Denver, Inc. | 1550 Liberty Ridge Drive — Suite 320 | Wayne, PA 19087-5667 | Office : 610-249-2000 | Fax: 610-232-0425

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Note that your plan participation (1/3, 2/3, 3/3rds) does not guarantee a payout and that achievement of the plan results drive the actual payouts which can result in no payout, below or above target payouts.

Note that the specifics of both of the Gardner Denver bonus plans (Executive Annual Bonus Incentive Program and the Long Term Cash Bonus Plan) are determined by the Compensation Committee on an annual basis. The criteria for achieving the annual bonus will be determined by the Compensation Committee, in its sole discretion, at its annual first quarter meeting (normally in February) and bonuses will be awarded following that meeting within a two to three week period depending on the payroll processing cycle.

4. Equity Incentive Plan. Annually, you will be eligible to receive a restricted stock (or restricted stock unit) and stock option grant pursuant to the Company’s Long-Term Incentive Plan. Historically, these grants are determined by the Compensation Committee at it’s annual first quarter meeting (normally in February) and the Company’s stock options are granted with a strike price equal to the market close on the date of the Compensation Committee’s approval of the grant. Stock option grants vest over a three (3) year period in three (3) equal increments and are exercisable for seven (7) years. The Company’s restricted stock units vest at the end of three (3) years.

Note that the 3 components of the Long Term Incentive Plan (LTIP) for Gardner Denver, Inc. currently include Stock Option Grants, Restricted Stock Unit Grants, and the Long Term Cash Bonus Plan. The LTIP is designed to split the total targeted LTIP economic value at 33.3% for each component. The MDCC could make adjustments or changes to the annual and long term compensation programs for executives so these programs described in this offer letter do not reflect a guarantee to continue these programs for you. As Executive Officers of Gardner Denver, our annual and long term compensation is determined by the MDCC.

5.	Special Restricted Stock Unit Grant. In order to bridge your transition from your current employer to Gardner Denver, you will receive a special one-time award of $663,000 in restricted stock units that will be granted at the market close price on your first day of employment.
6.	Special Stock Options Grant. In order to bridge your transition from your current employer to Gardner Denver, you will receive a special one-time award of $31,100 (Black Scholes derived value) in stock options that will be granted at the strike price at the market close price on your first day of employment.
	Note, the above restricted stock units and stock options grants will have the same vesting and forfeiture requirements as other annual grants.
7.	Change in Control. As an executive of the Company, you will receive a Change in Control Agreement. This Agreement addresses adverse changes that may occur with respect to your terms and conditions of employment, including position, location, compensation and benefits, following a change of control. If, during the 24-month period following a change

Chris Celtruda Offer Letter 4-7-2011 Initial CRC Date 4/8/11

Gardner Denver, Inc. | 1550 Liberty Ridge Drive — Suite 320 | Wayne, PA 19087-5667 | Office : 610-249-2000 | Fax: 610-232-0425

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in control, the Company terminates your employment other than for cause, or you terminate for a good reason (i.e., relating to material changes in position, location, compensation and/or benefits), you will receive payments consistent with the prevailing Change in Control Agreement. Generally, per the current agreement at the time of this offer, you would be entitled to receive:

• Accrued but unpaid base salary through the date of termination,

• A severance payment of two (2) times the sum of your base salary and bonus amount

• To the extent not included in the executives accrued compensation, the Company will pay a pro-rata bonus amount for the year of termination, based on the executives bonus amount and

• The Company will pay for the continuation of medical, dental and life insurance benefits for up to two (2) years.

The Executive Change in Control Agreement will be provided to you for complete review.

You will also receive an Indemnification Agreement to protect you from potential claims made against you in your capacity as an executive of the Company.

8. Special Sign on Bonus. You will be eligible to receive a one-time sign on bonus in the amount of $800.000 less applicable taxes and withholding. This sign-on bonus is being provided to you to assist you with your requirements to pay back your current employer for relocation assistance that they provided to you. This payment will be made to you with your regularly scheduled paycheck as soon as practicable after your start date. Should you voluntarily terminate your employment or be involuntarily terminated for cause. including but not limited to a violation of the Gardner Denver Code of Ethics and Business Conduct, from the Company within thirty six (36) months of your date of hire. you will be required to repay 100% of the sign-on bonus payment, including all local state and federal taxes paid on your behalf by the company.

Notwithstanding the foregoing, in the event of a Change in Control (as defined in the Gardner Denver, Inc. Long —Term Incentive Plan) or if you are involuntarily terminated without cause, you shall be released of any obligation to repay the sign-on bonus described above.

As additional consideration for the Special Sign On Bonus and Special Equity Grants, you agree that for a period of two (2) years following the termination of your affiliation with the Company for any reason, you shall not directly or indirectly (i) induce, solicit, request or advise any Customers (as defined below) to patronize any business which competes with any business of the Company or its affiliates for which you have had any management responsibility during your affiliation with Company; or (ii) entice, solicit, request or advise any employee of the Company or any of its affiliaties to accept employment (or other affiliation) with any other person, firm or business. As used above, “Customers” means all customers of any business of the Company or its affiliates for which you had contact or management responsibility during your affiliation with Company.

Chris Celtruda Offer Letter 4-7-2011 Initial CRC Date 4/8/11

Gardner Denver, Inc. | 1550 Liberty Ridge Drive – Suite 320 | Wayne, PA 19087-5667 | Office : 610-249-2000 | Fax : 610-232-0425

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9.	Relocation. You will be eligible for relocation benefits to the Wayne PA area. A copy of the relocation benefits description and summary of the principal elements of this program will be provided to you upon request. Of course, we will work with you, as necessary, to ensure that you have a seamless relocation to the Wayne, PA area.
	At this time we are not offering you a Loss on Sale or Home Buyout relocation benefit based on our discussions that you will not need these benefits to complete your relocation to Pennsylvania.
	Your benefits under the relocation program will be contingent upon your signing the attached Relocation Agreement, which will provide that if you voluntarily terminate your employment with the Company within thirty six (36) months from the date of hire, you will be required to repay 100% of the expense of your relocation, including all local, state and federal taxes paid on your behalf by the company.
	Accordingly, by signing this offer letter, you are authoring Gardner Denver to withhold any and all Reimbursement Amounts form any funds owed to you by Gardner Denver upon your termination, including any base salary or bonuses. Any portion of the Reimbursement Amount remaining unpaid after your termination will bear interest at a rate equal to the lesser of (i) 18% or (ii) the maximum, non-usurious rate of interest permitted by applicable law.
	Gardner Denver has a contract with Prudential that will assist you with your relocation to the Wayne, Pennsylvania area. A Prudential representative will contact you to provide detailed information about your relocation. Please do not list your home or contact anyone about the movement of household goods until you have discussed your relocation with Prudential.
10.	Executive Agreements.
	As part of this offer you will receive a severance plan agreement with the following provisions:

a.	lump sum severance payment equal to one times the sum of your annual base salary and executive annual bonus at full target
b.	12 months of paid COBRA for Health and Welfare benefits at the coverage level prior to your termination
c.	outplacement services for up to 12 months
d.	with the following general terms and conditions (agreement will have full T&C’s);

i.	the agreement stipulates that you will receive the severance benefits only if you are involuntarily terminated for other than for cause.
ii.	Should you be involuntarily terminated for cause, including but not limited to a violation of the Gardner Denver Code of Ethics and Business Conduct, you will not receive a severance payment

Chris Celtruda Offer Letter 4-7-2011 lnitial CRC Date 4/8/11

Gardner Denver, lnc. | 1550 Liberty Ridge Drive — Suite 320 | Wayne, PA 19087-5667 | Office: 610-249-2000 | Fax: 610-232-0425

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iii.	subject to other standard terms and conditions for the Company’s severance packages including but not limited to waiver and release and non-disclosure agreements, and
iv.	the severance agreement will expire after your second year of employment (day of your second anniversary of date of hire).

11.	Retirement Plans. As an executive of Gardner Denver. you will be eligible to participate in the Company’s Retirement Savings Plan and Supplemental Excess Defined Contribution Plan. The Company’s Retirement Savings Plan is a tax-qualified 401(k) retirement savings plan. You will be eligible to contribute from 1% to 100% of compensation tax deferred to this plan up to the IRS limit (2011 = $16,500 pre-tax limit plus $5,500 pre-tax catch-up if age 50 or older). The Company matches the first 3% of employee contribution $1 for each $1 and the second 3% of employee contributions $.50 for each $1. The Company match is contributed in the form of our common stock, but you will have the right to diversify out of Company common stock into other fund alternatives, subject to applicable securities law requirements. You will also receive a non-elective Company contribution equal to 4% of compensation up to the Social Security wage limit (2011 = $106,800) base plus 8% of compensation that exceeds the Social Security wage base up to the IRS limit (2011 = $245,000). All employee and company matching contributions are fully vested immediately and the non-elective company contribution becomes fully vested after three (3) years of employment.
	In addition to the Retirement Savings Plan. you will be eligible to participate in the Supplemental Excess Defined Contribution Plan. The Supplemental Plan provides you the opportunity to continue to be credited with contributions on a pre-tax basis beyond the IRS limits that apply to the Retirement Savings Plan. The Company matching contributions in this Plan are made at the same rate as in the Retirement Savings plan described above . You will also receive a non-elective Company contribution equal to 12% of compensation that exceeds the IRS limit (2011 = $245,000). All employee and Company matching contributions are fully vested immediately and the non-elective company contribution becomes fully vested after three (3) years of employment.
12.	Long-Term Care Insurance Program. The Compensation Committee adopted a Long-Term Care Insurance program for Executives in 2004. The Company will pay for your premium payments under this Program for required ten (10) years as an executive of Gardner Denver. It provides lifetime benefit protection of $300 per day and increases each year after 2005 at the lesser of the CPI or 5%.
13.	Additional Executive Benefits. As an executive of Gardner Denver. you will also be eligible for the following benefits: (a) annual tax planning and tax return preparation services by an external financial planning services company, (currently Rubin Brown); (b) estate planning services (every five (5) years ); (c) executive retirement planning in connection with your retirement from Gardner Denver: (d) required annual executive physical examinations; (e)

Chris Celtruda Offer Letter 4-7-2011 Initial CRC Date 4/8/11

Gardner Denver. Inc. | 1550 Liberty Ridge Drive-Suite 320 | Wayne, PA 19087-5667 | Office: 610-249-2000 | Fax: 610-232-0425

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	executive long-term disability insurance; and (f) participation in the charitable donations matching gifts program that matches your charitable donations up to $2,500 annually.
14.	Health and Welfare Insurance Coverage. You will also be eligible for other benefits coverage including medical, dental, and life insurance and disability. A brief summary of these benefit programs will be provided to you. The Gardner Denver benefits plan coverage year begins on April 1st and ends on March 31st.
15.	Vacation. You will be eligible for four (4) weeks of vacation per year.
16.	Start Date. Your start date will be April 26, 2011 or earlier.

Chris, I am very excited by the prospect of your acceptance of this offer to become a part of the Gardner Denver team. Clearly, you can make a positive contribution to our goal of growing the Company into a larger and more profitable organization. Please acknowledge your acceptance of this offer by signing and dating this letter on the space provided below and faxing it back to Armando L. Castorena, Vice President Human Resources at (610) 232-0425 or email a pdf of the signed offer letter to armando.castorena@gardnerdenver.com.

Sincerely,

/s/ Barry L. Pennypacker
Barry L. Pennypacker
President & Chief Executive Officer

I have read and accept this offer of employment and agree to the terms and conditions.

ACCEPTED AND AGREED:

/s/ C. R. Celtruda
Christopher R. Celtruda

Date: April 8, 2011

Chris Celtruda Offer Letter 4-7-2011 Initial____ Date ____

Gardner Denver, Inc. | 1550 Liberty Ridge Drive — Suite 320 | Wayne, PA 19087-5667 | Office: 610-249-2000 | Fax: 610-232-0425

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EX-31.1

Exhibit 31.1

CEO Form 10-Q Certification

I, Barry L. Pennypacker, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Gardner Denver, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 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)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011	/s/ Barry L. Pennypacker
	Barry L. Pennypacker
	President and Chief Executive Officer Gardner Denver, Inc.

EX-31.2

Exhibit 31.2

CFO Form 10-Q Certification

I, Michael M. Larsen, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Gardner Denver, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 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)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011	/s/ Michael M. Larsen
	Michael M. Larsen
	Vice President and Chief Financial Officer Gardner Denver, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gardner Denver, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Barry L. Pennypacker, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, that:

(1) The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Barry L. Pennypacker  

Barry L. Pennypacker 

President and Chief Executive Officer
Gardner Denver, Inc.
August 4, 2011 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gardner Denver, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Periodic Report”), I, Michael M. Larsen, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, that:

(1) The Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael M. Larsen  

Michael M. Larsen 

Vice President and Chief Financial Officer
Gardner Denver, Inc.
August 4, 2011 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML



Stock-Based Compensation (Schedule of Restricted Share Awards) (Details) (USD $) In Thousands, except Per Share data	6 Months Ended
	Jun. 30, 2011
Stock-Based Compensation
Nonvested, Shares, Beginning Of Period	161
Nonvested, Weighted-Average Grant-Date Fair Value (per share), Beginning Of Period	$ 35.13
Granted, Shares	43
Granted, Weighted-Average Grant-Date Fair Value (per share)	$ 77.81
Vested, Shares	(41)
Vested, Weighted-Average Grant-Date Fair Value (per share)	$ 38.08
Forfeited, Shares	(9)
Forfeited, Weighted-Average Grant-Date Fair Value (per share)	$ 39.86
Nonvested, Shares, End Of Period	154
Nonvested, Weighted-Average Grant-Date Fair Value (per share), End Of Period	$ 46.09

XML



Condensed Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 121,347	$ 157,029
Accounts receivable (net of allowance of $12,052 at June 30, 2011 and $11,531 at December 31, 2010)	445,812	369,860
Inventories, net	299,470	241,485
Deferred income taxes	34,053	34,628
Other current assets	31,719	25,535
Total current assets	932,401	828,537
Property, plant and equipment (net of accumulated depreciation of $362,198 at June 30, 2011 and $338,010 at December 31, 2010)	295,672	286,563
Goodwill	591,636	571,796
Other intangibles, net	299,721	289,588
Other assets	66,123	50,614
Total assets	2,185,553	2,027,098
Current liabilities:
Short-term borrowings and current maturities of long-term debt	38,010	37,228
Accounts payable	206,796	143,331
Accrued liabilities	203,689	179,041
Total current liabilities	448,495	359,600
Long-term debt, less current maturities	148,308	250,682
Postretirement benefits other than pensions	13,110	13,678
Deferred income taxes	64,101	62,157
Other liabilities	145,952	151,308
Total liabilities	819,966	837,425
Stockholders' equity:
Common stock, $0.01 par value; 100,000,000 shares authorized; 52,315,578 and 52,181,335 shares outstanding at June 30, 2011 and December 31, 2010, respectively	597	595
Capital in excess of par value	603,165	591,988
Retained earnings	827,059	705,699
Accumulated other comprehensive income	110,765	61,425
Treasury stock at cost; 7,344,984 and 7,268,653 shares at June 30, 2011 and December 31, 2010, respectively	(188,869)	(182,544)
Total Gardner Denver stockholders' equity	1,352,717	1,177,163
Noncontrolling interests	12,870	12,510
Total stockholders' equity	1,365,587	1,189,673
Total liabilities and stockholders' equity	$ 2,185,553	$ 2,027,098

XML



Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Condensed Consolidated Balance Sheets
Allowance for doubtful accounts	$ 12,052	$ 11,531
Accumulated depreciation on property, plant and equipment	$ 362,198	$ 338,010
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	52,315,578	52,181,335
Treasury stock, shares	7,344,984	7,268,653

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Stockholders' Equity and Earnings Per Share (Schedule of Calculation of Basic and Diluted Earnings per Common Share, and Antidilutive Equity-Based Awards Outstanding) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stockholders' Equity and Earnings Per Share
Net income attributable to Gardner Denver	$ 67,121	$ 37,334	$ 126,599	$ 69,292
Basic	52,285	52,399	52,246	52,275
Effect of stock-based compensation awards	399	403	416	421
Diluted	52,684	52,802	52,662	52,696
Basic earnings per share	$ 1.28	$ 0.71	$ 2.42	$ 1.33
Diluted earnings per share	$ 1.27	$ 0.71	$ 2.40	$ 1.31
Antidilutive equity-based awards outstanding	147	245	105	207

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets

Schedule of Changes in Carrying Amount of Goodwill Attributable to Each Business Segment

	Industrial Products Group			Engineered Products Group			Total
Balance as of December 31, 2009	$	256,824		$	321,190		$	578,014
Acquisitions		—			5,202			5,202
Foreign currency translation		(6,740	)		(4,680	)		(11,420	)
Balance as of December 31, 2010		250,084			321,712			571,796
Foreign currency translation		9,126			10,714			19,840
Balance as of June 30, 2011	$	259,210		$	332,426		$	591,636
Cumulative goodwill impairment charges (1)	$	252,533		$	—		$	252,533

(1) Based on exchange rates at the date of the charge.

Schedule of Gross Carrying Amount and Accumulated Amortization of Identifiable Intangible Assets, Other Than Goodwill

	June 30, 2011					December 31, 2010
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists and relationships	$	126,701	$	(35,658	)	$	118,844	$	(29,973	)
Acquired technology		101,235		(57,678	)		94,689		(53,224	)
Trade names		58,528		(10,094	)		55,320		(8,621	)
Other		7,110		(3,962	)		7,344		(3,424	)
Unamortized intangible assets:
Trade names		113,539		—			108,633		—
Total other intangible assets	$	407,113	$	(107,392	)	$	384,830	$	(95,242	)

Schedule of Amortization of Intangible Assets

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Intangible asset amortization expense	$	4,510	$	4,249	$	8,851	$	8,788

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Registrant Name	GARDNER DENVER INC
Entity Central Index Key	0000916459
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		52,326,949

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Stock-Based Compensation (Schedule of Other Information about Stock Options) (Details) (Stock Option Awards [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock Option Awards [Member]
Weighted-average estimated grant-date fair value of employee stock options granted	$ 28.96		$ 28.23
Pre tax intrinsic values of stock options exercised, total	$ 2,903	$ 1,897	$ 7,435	$ 8,230
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011	$ 5,115		$ 5,115
Weighted-average period (in years) to be recognized as expense			2.1

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Debt (Tables)

6 Months Ended

Jun. 30, 2011

Debt

Schedule of Debt and Capital Lease Obligations

	June 30, 2011		December 31, 2010
Short-term debt	$	2,951	$	7,440
Long-term debt:
Credit Line, due 2013 (1)	$	35,000	$	—
Term Loan, denominated in U.S. dollars ("USD"), due 2013 (2)		68,077		75,000
Term Loan, denominated in euros ("EUR"), due 2013 (3)		64,233		65,250
Senior Subordinated Notes at 8%, due 2013 (4)		—		125,000
Secured Mortgages (5)		7,610		7,322
Capitalized leases and other long-term debt		8,447		7,898
Total long-term debt, including current maturities		183,367		280,470
Current maturities of long-term debt		35,059		29,788
Total long-term debt, less current maturities	$	148,308	$	250,682

(1) The loans under this facility may be denominated in USD or several foreign currencies. The interest rates under the facility are based on prime, federal funds and/or LIBOR for the applicable currency. At June 30, 2011, the applicable rate was 1.8% and averaged 2.1% for the six-month period ended June 30, 2011.

(2) The interest rate for this loan varies with prime, federal funds and/or LIBOR. At June 30, 2011, the applicable rate was 2.2% and averaged 2.3% for the six-month period ended June 30, 2011.

(3) The interest rate for this loan varies with LIBOR. At June 30, 2011, this rate was 3.2% and averaged 3.0% for the six-month period ended June 30, 2011.

(4) On May 2, 2011, the Company redeemed all $125.0 million in aggregate principal amount outstanding of its Senior Subordinated Notes at 8%, plus accrued and unpaid interest. As a result, the Company wrote off $834 of unamortized debt issue cost.

(5) This amount consists of two fixed-rate commercial loans with an outstanding balance of €5,248 at June 30, 2011. The loans are secured by the Company's facility in Bad Neustadt, Germany.

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Stock-Based Compensation (Schedule of Stock Option Awards) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Stock-Based Compensation
Outstanding, Beginning Balance, Shares	863
Outstanding, Beginning Balance, Outstanding Weighted-Average Exercise Price	$ 32.69
Granted, Shares	179
Granted, Outstanding Weighted-Average Exercise Price	$ 76.34
Exercised, Shares	(160)
Exercised, Outstanding Weighted-Average Exercise Price	$ 30.75
Forfeited, Shares	(25)
Forfeited, Weighted-Average Grant-Date Fair Value	$ 47.01
Expired or canceled, Shares
Expired or canceled, Outstanding Weighted-Average Exercise Price
Outstanding, Ending Balance, Shares	857
Outstanding, Ending Balance, Outstanding Weighted-Average Exercise Price	$ 41.65
Outstanding, Ending Balance, Aggregate Intrinsic Value	$ 36,346
Outstanding, Ending Balance, Weighted-Average Remaining Contractual Life (in years)	4.6
Exercisable, Ending Balance, Shares	456
Exercisable, Ending Balance, Outstanding Weighted-Average Exercise Price	$ 32.03
Exercisable, Ending Balance, Aggregate Intrinsic Value	$ 23,749
Exercisable, Ending Balance, Weighted-Average Remaining Contractual Life (in years)	3.5

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Debt

6 Months Ended

Jun. 30, 2011

Debt

Debt

Note 7. Debt

The Company's debt at June 30, 2011 and December 31, 2010 is summarized as follows:

	June 30, 2011		December 31, 2010
Short-term debt	$	2,951	$	7,440
Long-term debt:
Credit Line, due 2013 (1)	$	35,000	$	—
Term Loan, denominated in U.S. dollars ("USD"), due 2013 (2)		68,077		75,000
Term Loan, denominated in euros ("EUR"), due 2013 (3)		64,233		65,250
Senior Subordinated Notes at 8%, due 2013 (4)		—		125,000
Secured Mortgages (5)		7,610		7,322
Capitalized leases and other long-term debt		8,447		7,898
Total long-term debt, including current maturities		183,367		280,470
Current maturities of long-term debt		35,059		29,788
Total long-term debt, less current maturities	$	148,308	$	250,682

(1) The loans under this facility may be denominated in USD or several foreign currencies. The interest rates under the facility are based on prime, federal funds and/or LIBOR for the applicable currency. At June 30, 2011, the applicable rate was 1.8% and averaged 2.1% for the six-month period ended June 30, 2011.

(2) The interest rate for this loan varies with prime, federal funds and/or LIBOR. At June 30, 2011, the applicable rate was 2.2% and averaged 2.3% for the six-month period ended June 30, 2011.

(3) The interest rate for this loan varies with LIBOR. At June 30, 2011, this rate was 3.2% and averaged 3.0% for the six-month period ended June 30, 2011.

(4) On May 2, 2011, the Company redeemed all $125.0 million in aggregate principal amount outstanding of its Senior Subordinated Notes at 8%, plus accrued and unpaid interest. As a result, the Company wrote off $834 of unamortized debt issue cost.

(5) This amount consists of two fixed-rate commercial loans with an outstanding balance of €5,248 at June 30, 2011. The loans are secured by the Company's facility in Bad Neustadt, Germany.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Schedule of Stock-Based Compensation Expense and Realized Excess Tax Benefits

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Selling and administrative expenses	$	1,928		$	1,165		$	4,262		$	3,022
Total stock-based compensation expense included in operating expenses	$	1,928		$	1,165		$	4,262		$	3,022
Income before income taxes		(1,928	)		(1,165	)		(4,262	)		(3,022	)
Provision for income taxes		573			357			1,232			964
Net income	$	(1,355	)	$	(808	)	$	(3,030	)	$	(2,058	)
Net cash provided by operating activities	$	(724	)	$	(414	)	$	(2,237	)	$	(1,903	)
Net cash used in financing activities	$	724		$	414		$	2,237		$	1,903

Schedule of Stock Option Awards

	Shares			Outstanding Weighted- Average Exercise Price (per share)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2010		863		$	32.69
Granted		179		$	76.34
Exercised		(160	)	$	30.75
Forfeited		(25	)	$	47.01
Expired or canceled		—		$	—
Outstanding at June 30, 2011		857		$	41.65	$	36,346		4.6 years
Exercisable at June 30, 2011		456		$	32.03	$	23,749		3.5 years

Schedule of Other Information about Stock Options

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Weighted-average estimated grant-date fair value of employee stock options granted (per share)	$	28.96			$	28.23
Total pre-tax intrinsic value of stock options exercised	$	2,903	$	1,897	$	7,435	$	8,230
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011					$	5,115
Weighted-average period (in years) to be recognized as expense						2.1

Schedule of Valuation Assumptions

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Assumptions:
Risk-free interest rate		1.4	%		1.7	%		1.9	%		2.3	%
Dividend yield		0.2	%		0.5	%		0.3	%		0.5	%
Volatility factor		45			46			44			43
Expected life (in years)		3.8			3.8			4.3			4.7

Schedule of Restricted Share Awards

	Shares			Weighted- Average  Grant- Date Fair Value (per share)
Nonvested at December 31, 2010		161		$	35.13
Granted		43		$	77.81
Vested		(41	)	$	38.08
Forfeited		(9	)	$	39.86
Nonvested at June 30, 2011		154		$	46.09

Schedule of Other Information about Restricted Share Awards

	Six Months Ended June 30,
	2011		2010
Total fair value of awards vested during the period	$	3,035	$	843
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011	$	3,770
Weighted-average period (in years) to be recognized as expense		2.2

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Accrued Liabilities (Schedule of Changes in Accrued Product Warranty Liability) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Accrued Liabilities
Balance at beginning of period	$ 21,033	$ 18,134	$ 19,100	$ 19,312
Product warranty accruals	8,234	5,360	14,966	10,950
Settlements	(5,964)	(5,784)	(11,272)	(11,985)
Effect of foreign currency translation	228	(704)	737	(1,271)
Balance at end of period	$ 23,531	$ 17,006	$ 23,531	$ 17,006

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Goodwill and Other Intangible Assets (Schedule of Changes in Carrying Amount of Goodwill Attributable to Each Business Segment) ( Details) (USD $) In Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Beginning Balance	$ 571,796	$ 578,014
Acquisitions		5,202
Foreign currency translation	19,840	(11,420)
Ending Balance	591,636	571,796
Industrial Products Group [Member]
Beginning Balance	250,084	256,824
Acquisitions
Foreign currency translation	9,126	(6,740)
Ending Balance	259,210	250,084
Engineered Products Group [Member]
Beginning Balance	321,712	321,190
Acquisitions		5,202
Foreign currency translation	10,714	(4,680)
Ending Balance	$ 332,426	$ 321,712

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Pension and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2011

Pension and Other Postretirement Benefits

Schedule of Net Periodic Benefit Cost

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	276		$	252		$	8		$	4
Interest cost		897			965			3,066			2,808			193			249
Expected return on plan assets		(1,054	)		(885	)		(2,829	)		(2,509	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			10			6			(15	)		(25	)
Unrecognized net actuarial loss (gain)		308			359			224			238			(318	)		(325	)
FASB ASC 715-30 curtailment gain		—			—			—			—			—			—
Total net periodic benefit cost (income)	$	151		$	439		$	747		$	795		$	(132	)	$	(97	)
	Six Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	538		$	524		$	15		$	8
Interest cost		1,794			1,930			6,036			5,772			386			498
Expected return on plan assets		(2,108	)		(1,770	)		(5,586	)		(5,134	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			19			12			(30	)		(50	)
Unrecognized net actuarial loss (gain)		616			718			443			494			(636	)		(650	)
FASB ASC 715-30 curtailment gain		—			—			—			(837	)		—			—
Total net periodic benefit cost (income)	$	302		$	878		$	1,450		$	831		$	(265	)	$	(194	)

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

Note 12. Income Taxes

As of June 30, 2011, the total balance of unrecognized tax benefits was $4.1 million compared with $4.5 million at December 31, 2010. The decrease in unrecognized tax benefits was primarily due to expiring statutes of limitations in Germany and other jurisdictions, and the settlement of the 2003 and 2004 tax audits in Germany and certain items related to the 2005 audit. The unrecognized tax benefits at June 30, 2011 include $4.1 million of uncertain tax positions that would affect the Company's effective tax rate if recognized, of which $2.0 million would be offset by a reduction of a corresponding deferred tax asset. The Company does not expect any significant changes to its unrecognized tax benefits within the next twelve months.

The Company's accounting policy with respect to interest expense on underpayments of income tax and related penalties is to recognize such interest expense and penalties as part of the provision for income taxes. The Company's income tax liabilities at June 30, 2011 include approximately $0.7 million of accrued interest and $0.3 million of penalties.

The Company's U.S. federal income tax returns for the tax years 2008 and 2009 are under examination by the Internal Revenue Service. The examination was initiated during the quarter ended September 30, 2010. As of the date of this report, the examination has not identified any material changes. The statutes of limitations for the U.S. state tax returns are open beginning with the 2006 tax year, except for three states for which the statutes have been extended, beginning with the 2003 tax year for one state and the 2006 tax year for the other two states.

The Company is subject to income tax in approximately 30 jurisdictions outside the U.S. The statute of limitations varies by jurisdiction. The Company's significant operations outside the U.S. are located in China, the United Kingdom and Germany. In Germany, the Company is finalizing the remaining tax audit for the 2005 tax year. Tax years 2006 and beyond remain subject to potential examination. These examinations have not identified any material changes. In China and the United Kingdom, tax years prior to 2006 are closed. In addition, audits are being conducted in certain other countries. To date, no material adjustments have been proposed as a result of these audits.

The following table summarizes the Company's income tax provision and effective income tax rate:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510
Provision for income taxes	$	27,263		$	12,603		$	49,802		$	22,333
Effective income tax rate		28.7	%		24.9	%		28.1	%		24.1	%

The year over year increase in the effective tax rate primarily reflects a higher proportion of taxable income in the U.S. in 2011 compared to 2010.

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Inventories

6 Months Ended

Jun. 30, 2011

Inventories

Inventories

Note 3. Inventories

Inventories as of June 30, 2011 and December 31, 2010 consisted of the following:

	June 30, 2011			December 31, 2010
Raw materials, including parts and subassemblies	$	199,511		$	163,192
Work-in-process		54,315			38,419
Finished goods		61,731			54,898
		315,557			256,509
Excess of FIFO costs over LIFO costs		(16,087	)		(15,024	)
Inventories, net	$	299,470		$	241,485

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Restructuring (Summary of the Activity in the Restructuring Accrual Accounts) (Details) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011
Beginning Balance	$ 6,043
Charged to expense	3,963
Paid	(5,526)
Other, net	707
Ending Balance	5,187
Termination Benefits [Member]
Beginning Balance	4,593
Charged to expense	3,279
Paid	(4,333)
Other, net	667
Ending Balance	4,206
Other [Member]
Beginning Balance	1,450
Charged to expense	684
Paid	(1,193)
Other, net	40
Ending Balance	$ 981

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Stockholders' Equity and Earnings Per Share

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Earnings Per Share

Stockholders' Equity and Earnings Per Share

Note 9. Stockholders' Equity and Earnings Per Share

In November 2008, the Company's Board of Directors authorized a share repurchase program to acquire up to 3.0 million shares of the Company's outstanding common stock. During the six-month period ended June 30, 2011, the Company repurchased 72 thousand shares under this program at a total cost of $5.3 million.

The following table details the calculation of basic and diluted earnings per common share, and antidilutive equity-based awards outstanding not included in the computation of diluted earnings per common share, for the three and six-month periods ended June 30, 2011 and 2010 (shares in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334	$	126,599	$	69,292
Weighted average shares of common stock outstanding:
Basic		52,285		52,399		52,246		52,275
Effect of stock-based compensation awards		399		403		416		421
Diluted		52,684		52,802		52,662		52,696
Earnings Per Share:
Basic	$	1.28	$	0.71	$	2.42	$	1.33
Diluted	$	1.27	$	0.71	$	2.40	$	1.31
Antidilutive equity-based awards outstanding		147		245		105		207

On April 20, 2011, the Company announced that it had reached an agreement with the minority shareholders of its two joint ventures in China, Shanghai CompAir Compressor Co. Ltd. and Shanghai CompAir-Dalong High Pressure Equipment Co. Ltd., to acquire all of their equity interests in these entities, representing 49 percent and 40 percent of the two entities, respectively. The purchase price of RMB 122.0 million (approximately $18.8 million based on exchange rates at the date of payment) was placed by the Company into escrow with the Shanghai United Assets and Equity Exchange during the second quarter of 2011 pending finalization of certain Chinese governmental approvals, and was recorded as a cash outflow from financing activities in the consolidated statements of cash flows. The transaction is currently expected to close during the third quarter of 2011 and will be accounted for by the Company as an equity transaction, at which time the non-controlling interests associated with these two joint ventures will be eliminated from the consolidated statements of operations and balance sheet.

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Contingencies

6 Months Ended

Jun. 30, 2011

Contingencies

Contingencies

Note 14. Contingencies

The Company is a party to various legal proceedings, lawsuits and administrative actions, which are of an ordinary or routine nature for a company of its size and sector. In addition, due to the bankruptcies of several asbestos manufacturers and other primary defendants, among other things, the Company has been named as a defendant in a number of asbestos personal injury lawsuits. The Company has also been named as a defendant in a number of silica personal injury lawsuits. The plaintiffs in these suits allege exposure to asbestos or silica from multiple sources and typically the Company is one of approximately 25 or more named defendants. In the Company's experience to date, the substantial majority of the plaintiffs have not suffered an injury for which the Company bears responsibility.

Predecessors to the Company sometimes manufactured, distributed and/or sold products allegedly at issue in the pending asbestos and silica litigation lawsuits (the "Products"). However, neither the Company nor its predecessors ever mined, manufactured, mixed, produced or distributed asbestos fiber or silica sand, the materials that allegedly caused the injury underlying the lawsuits. Moreover, the asbestos-containing components of the Products, if any, were enclosed within the subject Products.

The Company has entered into a series of agreements with certain of its or its predecessors' legacy insurers and certain potential indemnitors to secure insurance coverage and/or reimbursement for the costs associated with the asbestos and silica lawsuits filed against the Company. The Company has also pursued litigation against certain insurers or indemnitors where necessary. The latest of these actions, Gardner Denver, Inc. v. Certain Underwriters at Lloyd's, London, et al., was filed on July 9, 2010, in the Eighth Judicial District, Adams County, Illinois, as case number 10-L-48 (the "Adams County Case"). In the lawsuit, the Company seeks, among other things, to require certain excess insurer defendants to honor their insurance policy obligations to the Company, including payment in whole or in part of the costs associated with the asbestos lawsuits filed against the Company.

The Company believes that the pending and future asbestos and silica lawsuits are not likely to, in the aggregate, have a material adverse effect on its consolidated financial position, results of operations or liquidity, based on: the Company's anticipated insurance and indemnification rights to address the risks of such matters; the limited potential asbestos exposure from the Products described above; the Company's experience that the vast majority of plaintiffs are not impaired with a disease attributable to alleged exposure to asbestos or silica from or relating to the Products or for which the Company otherwise bears responsibility; various potential defenses available to the Company with respect to such matters; and the Company's prior disposition of comparable matters. However, due to inherent uncertainties of litigation and because future developments, including, without limitation, potential insolvencies of insurance companies or other defendants, an adverse determination in the Adams County Case, or other inability to collect from the Company's historical insurers or indemnitors could cause a different outcome. While the outcome of legal proceedings is inherently uncertain, based on presently known facts, experience, and circumstances, the Company believes that the amounts accrued on its balance sheet are adequate and that the liabilities arising from the asbestos and silica personal injury lawsuits will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. In the event of unexpected future developments, it is possible that the ultimate resolution of these matters may be material to the Company's consolidated financial position, results of operations or liquidity. However, at this time, based on presently available information, the Company views this possibility as remote.

The Company has been identified as a potentially responsible party ("PRP") with respect to several sites designated for cleanup under U.S. federal "Superfund" or similar state laws that impose liability for cleanup of certain waste sites and for related natural resource damages. Persons potentially liable for such costs and damages generally include the site owner or operator and persons that disposed or arranged for the disposal of hazardous substances found at those sites. Although these laws impose joint and several liability, in application, the PRPs typically allocate the investigation and cleanup costs based upon the volume of waste contributed by each PRP. Based on currently available information, the Company was only a small contributor to these waste sites, and the Company has, or is attempting to negotiate, de minimis settlements for their cleanup. The cleanup of the remaining sites is substantially complete and the Company's future obligations entail a share of the sites' ongoing operating and maintenance expense.

The Company is also addressing three on-site cleanups for which it is the primary responsible party. Two of these cleanup sites are in the operation and maintenance stage and the third is in the implementation stage. Based on currently available information, the Company does not anticipate that any of these sites will result in material additional costs beyond those already accrued on its balance sheet.

The Company has an accrued liability on its balance sheet to the extent costs are known or can be reasonably estimated for its remaining financial obligations for these matters. Based on currently available information, the Company does not anticipate any material adverse effect on its results of operations, financial condition, liquidity or competitive position as a result of compliance with federal, state, local or foreign environmental laws or regulations, or cleanup costs relating to the sites discussed above.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2011

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Note 10. Accumulated Other Comprehensive Income (Loss)

The Company's other comprehensive income (loss) consists of (i) unrealized foreign currency net gains and losses on the translation of the assets and liabilities of its foreign operations, (ii) realized and unrealized foreign currency gains and losses on intercompany notes of a long-term nature and certain hedges of foreign subsidiaries, (iii) unrealized gains and losses on cash flow hedges (consisting of interest rate swaps), net of income taxes, and (iv) pension and other postretirement prior service cost and actuarial gains or losses, net of income taxes.

The following table sets forth the changes in each component of accumulated other comprehensive income (loss):

	Cumulative Currency Translation Adjustment (1)			Foreign Currency Gains (Losses)			Unrealized Gains (Losses) on Cash Flow Hedges			Pension  and Postretirement Benefit Plans			Accumulated Other Comprehensive Income
Balance at December 31, 2009	$	134,573		$	(21,319	)	$	(250	)	$	(30,490	)	$	82,514
Before tax (loss) income		(38,820	)		8,920			(706	)		287			(30,319	)
Income tax effect		—			297			268			(84	)		481
Other comprehensive (loss) income		(38,820	)		9,217			(438	)		203			(29,838	)
Balance at March 31, 2010		95,753			(12,102	)		(688	)		(30,287	)		52,676
Before tax (loss) income		(47,788	)		664			(495	)		260			(47,359	)
Income tax effect		—			(649	)		188			(75	)		(536	)
Other comprehensive (loss) income		(47,788	)		15			(307	)		185			(47,895	)
Balance at June 30, 2010	$	47,965		$	(12,087	)	$	(995	)	$	(30,102	)	$	4,781
Balance at December 31, 2010	$	69,282		$	19,095		$	(933	)	$	(26,019	)	$	61,425
Before tax income (loss)		31,245			3,524			404			(669	)		34,504
Income tax effect		—			(434	)		(154	)		(71	)		(659	)
Other comprehensive income (loss)		31,245			3,090			250			(740	)		33,845
Balance at March 31, 2011		100,527			22,185			(683	)		(26,759	)		95,270
Before tax income (loss)		17,711			(2,403	)		(23	)		136			15,421
Income tax effect		—			99			9			(34	)		74
Other comprehensive income (loss)		17,711			(2,304	)		(14	)		102			15,495
Balance at June 30, 2011	$	118,238		$	19,881		$	(697	)	$	(26,657	)	$	110,765

(1) Income taxes are generally not provided for foreign currency translation adjustments, as such adjustments relate to permanent investments in international subsidiaries.

The Company's comprehensive income (loss) for the three and six-month periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334		$	126,599	$	69,292
Other comprehensive income (loss)		15,495		(47,895	)		49,340		(77,733	)
Comprehensive income (loss) attributable to Gardner Denver		82,616		(10,561	)		175,939		(8,441	)
Net income attributable to noncontrolling interests		575		590			996		885
Other comprehensive income (loss)		196		(86	)		388		(809	)
Comprehensive income attributable to noncontrolling interests		771		504			1,384		76
Total comprehensive income (loss)	$	83,387	$	(10,057	)	$	177,323	$	(8,365	)

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Supplemental Information (Tables)

6 Months Ended

Jun. 30, 2011

Supplemental Information

Components of Other Operating Expense (Income), Net, and Supplemental Cash Flow Information

	Three Months Ended June 30,				Six Months Ended June 30
	2011		2010		2011		2010
Other Operating Expense, Net
Foreign currency losses (gains), net	$	1,344	$	373	$	2,589	$	(628	)
Restructuring charges, net (1)		2,983		1,342		3,963		2,696
Other, net		1,760		1,553		1,147		(151	)
Total other operating expense, net	$	6,087	$	3,268	$	7,699	$	1,917
Supplemental Cash Flow Information
Cash taxes paid					$	46,233	$	25,381
Interest paid						9,544		11,329

(1) See Note 2 "Restructuring."

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Stock-Based Compensation

Note 8. Stock-Based Compensation

The following table summarizes the total stock-based compensation expense included in the consolidated statements of operations and the realized excess tax benefits included in the consolidated statements of cash flows for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Selling and administrative expenses	$	1,928		$	1,165		$	4,262		$	3,022
Total stock-based compensation expense included in operating expenses	$	1,928		$	1,165		$	4,262		$	3,022
Income before income taxes		(1,928	)		(1,165	)		(4,262	)		(3,022	)
Provision for income taxes		573			357			1,232			964
Net income	$	(1,355	)	$	(808	)	$	(3,030	)	$	(2,058	)
Net cash provided by operating activities	$	(724	)	$	(414	)	$	(2,237	)	$	(1,903	)
Net cash used in financing activities	$	724		$	414		$	2,237		$	1,903

Stock Option Awards

A summary of the Company's stock option activity for the six-month period ended June 30, 2011 is presented in the following table (underlying shares in thousands):

	Shares			Outstanding Weighted- Average Exercise Price (per share)		Aggregate Intrinsic Value		Weighted- Average Remaining Contractual Life
Outstanding at December 31, 2010		863		$	32.69
Granted		179		$	76.34
Exercised		(160	)	$	30.75
Forfeited		(25	)	$	47.01
Expired or canceled		—		$	—
Outstanding at June 30, 2011		857		$	41.65	$	36,346		4.6 years
Exercisable at June 30, 2011		456		$	32.03	$	23,749		3.5 years

The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying stock options and the quoted closing price of the Company's common stock at June 30, 2011 multiplied by the number of in-the-money stock options. The following table presents certain other information about the Company's stock options:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Weighted-average estimated grant-date fair value of employee stock options granted (per share)	$	28.96			$	28.23
Total pre-tax intrinsic value of stock options exercised	$	2,903	$	1,897	$	7,435	$	8,230
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011					$	5,115
Weighted-average period (in years) to be recognized as expense						2.1

Valuation Assumptions

The fair value of each stock option grant under the Company's Amended and Restated Long-Term Incentive Plan was estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used for the periods indicated are noted in the table below:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Assumptions:
Risk-free interest rate		1.4	%		1.7	%		1.9	%		2.3	%
Dividend yield		0.2	%		0.5	%		0.3	%		0.5	%
Volatility factor		45			46			44			43
Expected life (in years)		3.8			3.8			4.3			4.7

Restricted Share Awards

A summary of the Company's restricted share award activity for the six-month period ended June 30, 2011 is presented in the following table (underlying shares in thousands):

	Shares			Weighted- Average  Grant- Date Fair Value (per share)
Nonvested at December 31, 2010		161		$	35.13
Granted		43		$	77.81
Vested		(41	)	$	38.08
Forfeited		(9	)	$	39.86
Nonvested at June 30, 2011		154		$	46.09

The restricted shares granted in the six-month period ended June 30, 2011 were valued at the market close price of the Company's common stock on the date of grant. The following table presents certain other information about the Company's restricted share awards:

	Six Months Ended June 30,
	2011		2010
Total fair value of awards vested during the period	$	3,035	$	843
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011	$	3,770
Weighted-average period (in years) to be recognized as expense		2.2

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Stockholders' Equity and Earnings Per Share (Narrative) (Details) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2011 USD ($)	Jun. 30, 2011 CNY	Nov. 30, 2008	Apr. 20, 2011 Shanghai CompAir Compressor Co. Ltd. [Member]	Apr. 20, 2011 Shanghai CompAir-Dalong High Pressure Equipment Co. Ltd. [Member]
Share repurchased, authorized			3,000,000
Stock repurchased during period, shares	72,000
Stock repurchased during period value	$ 5.3
Equity Method Investment, Ownership Percentage				49.00%	40.00%
Purchase price	$ 18.8	122.0

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Gardner Denver, Inc. and its majority-owned subsidiaries (collectively referred to herein as "Gardner Denver" or the "Company"). Certain prior year balance sheet items have been reclassified to conform to the current year presentation. In consolidation, all significant intercompany transactions and accounts have been eliminated.

The financial information presented as of any date other than December 31, 2010 has been prepared from the books and records of the Company without audit. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such financial statements.

The unaudited interim condensed consolidated financial statements should be read in conjunction with the complete consolidated financial statements and notes thereto included in Gardner Denver's Annual Report on Form 10-K for the year ended December 31, 2010.

The results of operations for the six-month period ended June 30, 2011 are not necessarily indicative of the results to be expected for the full year. The balance sheet at December 31, 2010 has been derived from the audited financial statements as of that date but does not include all of the information and notes required by GAAP for complete financial statements.

Other than as specifically indicated in these "Notes to Condensed Consolidated Financial Statements" included in this Quarterly Report on Form 10-Q, the Company has not materially changed its significant accounting policies from those disclosed in its Form 10-K for the year ended December 31, 2010.

New Accounting Standards

Recently Adopted Accounting Pronouncements

In October 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2009-13, Revenue Recognition (Topic 605) - Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force ("ASU 2009-13"). ASU 2009-13 updates the existing multiple-element revenue arrangements guidance currently included under FASB Accounting Standards Codification ("ASC") 605-25, Revenue Recognition, Multiple-Element Arrangements. The revised guidance primarily provides two significant changes: (i) eliminates the need for objective and reliable evidence of fair value for the undelivered element in order for a delivered item to be treated as a separate unit of accounting, and (ii) eliminates the residual method to allocate the arrangement consideration. In addition, the guidance expands the disclosure requirements for revenue recognition. ASU 2009-13 was effective for fiscal years beginning on or after June 15, 2010. Adoption of this guidance in the first quarter of 2011 did not have a material effect on the Company's results of operations, financial position and cash flows.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements ("ASU 2010-06"). This update requires the following new disclosures: (i) the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and a description of the reasons for the transfers; and (ii) a reconciliation for fair value measurements using significant unobservable inputs (Level 3), including separate information about purchases, sales, issuance, and settlements. The update also clarifies existing requirements about fair value measurement disclosures and disclosures about inputs and valuation techniques. The new disclosures and clarifications of existing disclosures were effective for interim and annual reporting periods beginning after December 15, 2009, except for the reconciliation of Level 3 activity, which was effective for the Company in the first quarter of 2011. See Note 11 "Hedging Activities and Fair Value Measurements" for the disclosures required by ASU 2010-06. Adoption of this guidance had no effect on the Company's results of operations, financial position and cash flows.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) – Presentation of Comprehensive Income ("ASU 2011-05"). This update requires that the components of net income, the components of other comprehensive income and the total of comprehensive income be presented as a single continuous financial statement or in two separate but consecutive statements. The option of presenting other comprehensive income in the statement of stockholders' equity is eliminated. This update also requires the presentation on the face of the financial statements of reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income and the components of other comprehensive income are presented. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2011

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 4. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill attributable to each business segment for the six-month period ended June 30, 2011, and the year ended December 31, 2010, and cumulative impairment charges are presented in the table below:

	Industrial Products Group			Engineered Products Group			Total
Balance as of December 31, 2009	$	256,824		$	321,190		$	578,014
Acquisitions		—			5,202			5,202
Foreign currency translation		(6,740	)		(4,680	)		(11,420	)
Balance as of December 31, 2010		250,084			321,712			571,796
Foreign currency translation		9,126			10,714			19,840
Balance as of June 30, 2011	$	259,210		$	332,426		$	591,636
Cumulative goodwill impairment charges (1)	$	252,533		$	—		$	252,533

(1) Based on exchange rates at the date of the charge.

 The $5.2 million increase in goodwill related to acquisitions in 2010 was associated with the valuation of ILMVAC GmbH ("ILMVAC").

The following table presents the gross carrying amount and accumulated amortization of identifiable intangible assets, other than goodwill, at the dates presented:

	June 30, 2011					December 31, 2010
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer lists and relationships	$	126,701	$	(35,658	)	$	118,844	$	(29,973	)
Acquired technology		101,235		(57,678	)		94,689		(53,224	)
Trade names		58,528		(10,094	)		55,320		(8,621	)
Other		7,110		(3,962	)		7,344		(3,424	)
Unamortized intangible assets:
Trade names		113,539		—			108,633		—
Total other intangible assets	$	407,113	$	(107,392	)	$	384,830	$	(95,242	)

Amortization of intangible assets for the three and six-month periods ended June 30, 2011 and 2010 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Intangible asset amortization expense	$	4,510	$	4,249	$	8,851	$	8,788

Amortization of intangible assets held as of June 30, 2011 is anticipated to be approximately $17.0 million annually in 2012 through 2015 based upon exchange rates as of June 30, 2011. The increase in the carrying amount of identifiable assets other than goodwill between December 31, 2010 and June 30, 2011 was due primarily to the effect of changes in foreign currency exchange rates and the acquisition of certain technology during the second quarter of 2011.

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Goodwill and Other Intangible Assets (Schedule of Gross Carrying Amount and Accumulated Amortization of Identifiable Intangible Assets, Other Than Goodwill) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Intangible assets, accumulated amortization	$ (107,392)	$ (95,242)
Total other intangible assets, gross carrying amount	407,113	384,830
Customer Lists and Relationships [Member]
Amortized intangible assets, gross carrying amount	126,701	118,844
Intangible assets, accumulated amortization	(35,658)	(29,973)
Acquired Technology [Member]
Amortized intangible assets, gross carrying amount	101,235	94,689
Intangible assets, accumulated amortization	(57,678)	(53,224)
Trade Names [Member]
Amortized intangible assets, gross carrying amount	58,528	55,320
Intangible assets, accumulated amortization	(10,094)	(8,621)
Unamortized intangible assets, gross carrying amount	113,539	108,633
Other Intangible Assets [Member]
Amortized intangible assets, gross carrying amount	7,110	7,344
Intangible assets, accumulated amortization	$ (3,962)	$ (3,424)

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2011

Income Taxes

Summary of Company's Income Tax Provision and Effective Income Tax Rate

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510
Provision for income taxes	$	27,263		$	12,603		$	49,802		$	22,333
Effective income tax rate		28.7	%		24.9	%		28.1	%		24.1	%

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Hedging Activities and Fair Value Measurements (Schedule of Gains and Losses on Derivatives Designated as Cash Flow Hedges) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Hedging Activities and Fair Value Measurements
Amount of gain or (loss) recognized in AOCI on derivatives (effective portion)	$ (292)	[1]	$ (825)	[1]	$ (170)	[1]	$ (1,912)	[1]
Amount of gain or (loss) reclassified from AOCI into income (effective portion)	(269)	[1]	(330)	[1]	(551)	[1]	(711)	[1]
Amount of gain or (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)		[1]	$ (5)	[1]	$ (1)	[1]	$ (5)	[1]

[1] Losses on derivatives reclassified from accumulated other comprehensive income ("AOCI") into income (effective portion) were included in the interest expense line on the face of the Condensed Consolidated Statements of Operations.

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Hedging Activities and Fair Value Measurements (Schedule of Gains and (Losses), Net of Income Tax, Associated With Changes in the Fair Value of Debt) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Gain (loss), net of income tax, recorded through other comprehensive income	$ (292)	[1]	$ (825)	[1]	$ (170)	[1]	$ (1,912)	[1]
Term Loan, Denominated in Euros ("EUR"), Due 2013 [Member]
Gain (loss), net of income tax, recorded through other comprehensive income	(317)		1,566		(317)		2,637
Balance included in accumulated other comprehensive income at June 30	$ (5,450)		$ (2,809)		$ (5,450)		$ (2,809)

[1] Losses on derivatives reclassified from accumulated other comprehensive income ("AOCI") into income (effective portion) were included in the interest expense line on the face of the Condensed Consolidated Statements of Operations.

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Stock-Based Compensation (Schedule of Other Information about Restricted Share Awards) (Details) (Restricted Share Awards [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Restricted Share Awards [Member]
Total fair value of awards vested during the period	$ 3,035	$ 843
Pre-tax unrecognized compensation expense, net of estimated forfeitures as of June 30, 2011	$ 3,770
Weighted-average period to be recognized as expense, years	2.2

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Supplemental Information (Components of Other Operating Expense (Income), Net, and Supplemental Cash Flow Information) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended				12 Months Ended		30 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010		Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2011
Supplemental Information
Foreign currency transaction loss (gain), net	$ 1,344		$ 373		$ 2,589		$ (628)
Restructuring charges, net	2,983	[1]	1,342	[1]	3,963	[1]	2,696	[1]	2,196	46,126	52,285
Other, net	1,760		1,553		1,147		(151)
Total other operating expense, net	6,087		3,268		7,699		1,917
Cash taxes paid					46,233		25,381
Interest paid					$ 9,544		$ 11,329

[1] See Note 2 "Restructuring."

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Accrued Liabilities

6 Months Ended

Jun. 30, 2011

Accrued Liabilities

Accrued Liabilities

Note 5. Accrued Liabilities

Accrued liabilities as of June 30, 2011 and December 31, 2010 consisted of the following:

	June 30, 2011		December 31, 2010
Salaries, wages and related fringe benefits	$	57,751	$	50,540
Taxes		32,977		25,367
Advance payments on sales contracts		43,689		39,026
Product warranty		23,531		19,100
Other		45,741		45,008
Total accrued liabilities	$	203,689	$	179,041

A reconciliation of the changes in the accrued product warranty liability for the three and six-month periods ended June 30, 2011 and 2010 is as follows:

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Balance at beginning of period	$	21,033		$	18,134		$	19,100		$	19,312
Product warranty accruals		8,234			5,360			14,966			10,950
Settlements		(5,964	)		(5,784	)		(11,272	)		(11,985	)
Effect of foreign currency translation		228			(704	)		737			(1,271	)
Balance at end of period	$	23,531		$	17,006		$	23,531		$	17,006

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Accrued Liabilities (Schedule of Accrued Liabilities) (Details) (USD $) In Thousands	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009
Accrued Liabilities
Salaries, wages and related fringe benefits	$ 57,751		$ 50,540
Taxes	32,977		25,367
Advance payments on sales contracts	43,689		39,026
Product warranty	23,531	21,033	19,100	17,006	18,134	19,312
Other	45,741		45,008
Total accrued liabilities	$ 203,689		$ 179,041

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Stockholders' Equity and Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Stockholders' Equity and Earnings Per Share

Schedule of Calculation of Basic and Diluted Earnings per Common Share, and Antidilutive Equity-Based Awards Outstanding

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334	$	126,599	$	69,292
Weighted average shares of common stock outstanding:
Basic		52,285		52,399		52,246		52,275
Effect of stock-based compensation awards		399		403		416		421
Diluted		52,684		52,802		52,662		52,696
Earnings Per Share:
Basic	$	1.28	$	0.71	$	2.42	$	1.33
Diluted	$	1.27	$	0.71	$	2.40	$	1.31
Antidilutive equity-based awards outstanding		147		245		105		207

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Segment Results (Schedule of Financial Information by Business Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues	$ 610,693	$ 449,519	$ 1,142,546	$ 871,683
Operating income	99,172	56,587	185,995	104,051
Interest expense	3,934	6,062	9,281	12,178
Other expense (income), net	279	(2)	(683)	(637)
Income (loss) before income taxes	94,959	50,527	177,397	92,510
Industrial Products Group [Member]
Revenues	327,846	268,650	614,056	515,044
Operating income	34,325	20,157	65,127	39,710
Operating income as a percentage of revenues	10.50%	7.50%	10.60%	7.70%
Engineered Products Group [Member]
Revenues	282,847	180,869	528,490	356,639
Operating income	$ 64,847	$ 36,430	$ 120,868	$ 64,341
Operating income as a percentage of revenues	22.90%	20.10%	22.90%	18.00%

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Income Taxes (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Unrecognized tax benefits	$ 4.1	$ 4.5
Uncertain tax positions that would affect the effective tax rate if recognized	4.1
Offsetting reduction of a corresponding deferred tax asset	2.0
Accrued Interest	0.7
Penalties	$ 0.3
Foreign Country [Member]
Income tax jurisdictions outside U.S.	30

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Segment Results (Tables)

6 Months Ended

Jun. 30, 2011

Segment Results

Schedule of Financial Information by Business Segment

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Industrial Products Group
Revenues	$	327,846		$	268,650		$	614,056		$	515,044
Operating income		34,325			20,157			65,127			39,710
Operating income as a percentage of revenues		10.5	%		7.5	%		10.6	%		7.7	%
Engineered Products Group
Revenues	$	282,847		$	180,869		$	528,490		$	356,639
Operating income		64,847			36,430			120,868			64,341
Operating income as a percentage of revenues		22.9	%		20.1	%		22.9	%		18.0	%
Reconciliation of Segment Results to Consolidated Results
Total segment operating income	$	99,172		$	56,587		$	185,995		$	104,051
Interest expense		3,934			6,062			9,281			12,178
Other expense (income), net		279			(2	)		(683	)		(637	)
Consolidated income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510

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Goodwill and Other Intangible Assets (Schedule of Amortization of Intangible Assets) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Goodwill and Other Intangible Assets
Intangible asset amortization expense	$ 4,510	$ 4,249	$ 8,851	$ 8,788

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Hedging Activities and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Hedging Activities and Fair Value Measurements

Schedule of Notional Amounts, Fair Values and Classification of the Company's Outstanding Derivatives by Risk Category and Instrument Type

	June 30, 2011
	Balance Sheet Location	Notional Amount (1)		Asset Derivatives Fair Value (1)		Liability Derivatives Fair Value (1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	79,002	$	—	$	1,172
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Current assets	$	10,389	$	620	$	—
Foreign currency forwards	Current liabilities	$	87,788	$	499	$	2,774

	December 31, 2010
	Balance Sheet Location	Notional Amount (1)		Asset Derivatives Fair Value (1)		Liability Derivatives Fair Value (1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	76,742	$	—	$	1,560
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Accrued liabilities	$	113,871	$	709	$	1,884

(1) Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

Schedule of Gains and Losses on Derivatives Designated as Cash Flow Hedges

	Three Months Ended June 30,						Six Months Ended June 30,
Interest rate swap contracts (1)	2011			2010			2011			2010
Amount of gain or (loss) recognized in AOCI on derivatives (effective portion)	$	(292	)	$	(825	)	$	(170	)	$	(1,912	)
Amount of gain or (loss) reclassified from AOCI into income (effective portion)		(269	)		(330	)		(551	)		(711	)
Amount of gain or (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)		—			(5	)		(1	)		(5	)

(1) Losses on derivatives reclassified from accumulated other comprehensive income ("AOCI") into income (effective portion) were included in the interest expense line on the face of the Condensed Consolidated Statements of Operations.

Schedule of Gains and (Losses) on Forward Currency Contracts Outstanding and Total Net Foreign Currency Gains and (Losses)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Foreign currency forward contracts	$	(1,586	)	$	2,188		$	(2,005	)	$	5,360
Total net foreign currency (losses) and gains (1)		(1,344	)		(373	)		(2,589	)		628

(1) See Note 13 "Supplemental Information"

Schedule of Gains and (Losses), Net of Income Tax, Associated With Changes in the Fair Value of Debt

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
(Loss) gain, net of income tax, recorded through other comprehensive income	$	(317	)	$	1,566	$	(317	)	$	2,637
Balance included in accumulated other comprehensive income at June 30							(5,450	)		(2,809	)

Summary of Fair Value Hierarchy of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

	Level 1		Level 2		Level 3		Total
Financial Assets
Foreign currency forwards (1)	$	—	$	1,119	$	—	$	1,119
Trading securities held in deferred compensation plan (2)		6,334		—		—		6,334
Total	$	6,334	$	1,119	$	—	$	7,453
Financial Liabilities
Foreign currency forwards (1)	$	—	$	2,774	$	—	$	2,774
Interest rate swaps (3)		—		1,172		—		1,172
Phantom stock plan (4)		—		6,069		—		6,069
Deferred compensation plan (5)		6,334		—		—		6,334
Total	$	6,334	$	10,015	$	—	$	16,349

(1) Based on internally-developed models that use as their basis readily observable market parameters such as current spot and forward rates, and the LIBOR index.

(2) Based on the observable price of publicly traded mutual funds which, in accordance with FASB ASC 710, Compensation – General, are classified as "Trading" securities and accounted for using the mark-to-market method.

(3) Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of June 30, 2011. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

(4) Based on the price of the Company's common stock.

(5) Based on the fair value of the investments in the deferred compensation plan.

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Supplemental Information

6 Months Ended

Jun. 30, 2011

Supplemental Information

Supplemental Information

Note 13. Supplemental Information

The components of other operating expense, net, and supplemental cash flow information are as follows:

	Three Months Ended June 30,				Six Months Ended June 30
	2011		2010		2011		2010
Other Operating Expense, Net
Foreign currency losses (gains), net	$	1,344	$	373	$	2,589	$	(628	)
Restructuring charges, net (1)		2,983		1,342		3,963		2,696
Other, net		1,760		1,553		1,147		(151	)
Total other operating expense, net	$	6,087	$	3,268	$	7,699	$	1,917
Supplemental Cash Flow Information
Cash taxes paid					$	46,233	$	25,381
Interest paid						9,544		11,329

(1) See Note 2 "Restructuring."

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Hedging Activities and Fair Value Measurements (Narrative) (Details) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011 USD ($)	Jun. 30, 2011 EUR (€)
Hedging Activities and Fair Value Measurements
Borrowings resulting in interest rate risk	$ 186.3
Foreign currency contracts maturity period	one	one
Variable rate borrowings	50.0	20.0
Variable interest rate lower range	1.80%	1.80%
Variable interest rate higher range	2.20%	2.20%
Lower expiration dates	2012	2012
Higher expiration dates	2013	2013
Expected reclassification of losses out of AOCI into earnings during the next 12 months	0.8
Variable rate borrowings outstanding	68.1	44.3
Number of foreign currency contracts outstanding	44	44
Notional amounts lower range	0.1
Notional amounts higher range	11.3
Portion of term loan used as a hedge for net investment in subsidiaries		€ 25.5

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Hedging Activities and Fair Value Measurements (Summary of Fair Value Hierarchy of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (USD $) In Thousands	Jun. 30, 2011
Foreign currency forwards	$ 1,119	[1]
Trading securities held in deferred compensation plan	6,334	[2]
Total	7,453
Foreign currency forwards	2,774	[1]
Interest rate swaps	1,172	[3]
Phantom stock plan	6,069	[4]
Deferred compensation plan	6,334	[5]
Total	16,349
Fair Value, Inputs, Level 1 [Member]
Foreign currency forwards		[1]
Trading securities held in deferred compensation plan	6,334	[2]
Total	6,334
Foreign currency forwards		[1]
Interest rate swaps		[3]
Phantom stock plan		[4]
Deferred compensation plan	6,334	[5]
Total	6,334
Fair Value, Inputs, Level 2 [Member]
Foreign currency forwards	1,119	[1]
Trading securities held in deferred compensation plan		[2]
Total	1,119
Foreign currency forwards	2,774	[1]
Interest rate swaps	1,172	[3]
Phantom stock plan	6,069	[4]
Deferred compensation plan		[5]
Total	10,015
Fair Value, Inputs, Level 3 [Member]
Foreign currency forwards		[1]
Trading securities held in deferred compensation plan		[2]
Total
Foreign currency forwards		[1]
Interest rate swaps		[3]
Phantom stock plan		[4]
Deferred compensation plan		[5]
Total

[1] Based on internally-developed models that use as their basis readily observable market parameters such as current spot and forward rates, and the LIBOR index.

[2] Based on the observable price of publicly traded mutual funds which, in accordance with FASB ASC 710, Compensation - General, are classified as "Trading" securities and accounted for using the mark-to-market method.

[3] Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of June 30, 2011. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

[4] Based on the price of the Company's common stock.

[5] Based on the fair value of the investments in the deferred compensation plan.

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Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2011

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

Note 6. Pension and Other Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company's defined benefit pension plans and other postretirement benefit plans recognized for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	276		$	252		$	8		$	4
Interest cost		897			965			3,066			2,808			193			249
Expected return on plan assets		(1,054	)		(885	)		(2,829	)		(2,509	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			10			6			(15	)		(25	)
Unrecognized net actuarial loss (gain)		308			359			224			238			(318	)		(325	)
FASB ASC 715-30 curtailment gain		—			—			—			—			—			—
Total net periodic benefit cost (income)	$	151		$	439		$	747		$	795		$	(132	)	$	(97	)
	Six Months Ended June 30,
	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2011			2010			2011			2010			2011			2010
Service cost	$	—		$	—		$	538		$	524		$	15		$	8
Interest cost		1,794			1,930			6,036			5,772			386			498
Expected return on plan assets		(2,108	)		(1,770	)		(5,586	)		(5,134	)		—			—
Recognition of:
Unrecognized prior service cost		—			—			19			12			(30	)		(50	)
Unrecognized net actuarial loss (gain)		616			718			443			494			(636	)		(650	)
FASB ASC 715-30 curtailment gain		—			—			—			(837	)		—			—
Total net periodic benefit cost (income)	$	302		$	878		$	1,450		$	831		$	(265	)	$	(194	)

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Restructuring (Tables)

6 Months Ended

Jun. 30, 2011

Restructuring

Schedule of Restructuring Charges by Reportable Segment

	Industrial Products Group		Engineered Products Group			Total
Fiscal year 2009	$	25,791	$	20,335		$	46,126
Fiscal year 2010		3,687		(1,491	)		2,196
Six months ended June 30, 2011		3,571		392			3,963
Total	$	33,049	$	19,236		$	52,285

Summary of the Activity in the Restructuring Accrual Accounts

	Termination Benefits			Other			Total
Balance as of December 31, 2010	$	4,593		$	1,450		$	6,043
Charged to expense		3,279			684			3,963
Paid		(4,333	)		(1,193	)		(5,526	)
Other, net		667			40			707
Balance as of June 30, 2011	$	4,206		$	981		$	5,187

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Contingencies (Details)	6 Months Ended
	Jun. 30, 2011
Contingencies
Number of parties named as defendants along with the company in silica personal injury lawsuits	25 or more

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Income Taxes (Summary of Company's Income Tax Provision and Effective Income Tax Rate) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Income Taxes
Income before income taxes	$ 94,959	$ 50,527	$ 177,397	$ 92,510
Provision for income taxes	$ 27,263	$ 12,603	$ 49,802	$ 22,333
Effective income tax rate	28.70%	24.90%	28.10%	24.10%

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Goodwill and Other Intangible Assets (Goodwill Impairment Charges) (Details) (USD $) In Thousands	Jun. 30, 2011
Impairment of goodwill	$ 252,533	[1]
Industrial Products Group [Member]
Impairment of goodwill	252,533	[1]
Engineered Products Group [Member]
Impairment of goodwill		[1]

[1] Based on exchange rates at the date of the charge.

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2011

Accumulated Other Comprehensive Income (Loss)

Component of Accumulated Other Comprehensive Income (Loss)

	Cumulative Currency Translation Adjustment (1)			Foreign Currency Gains (Losses)			Unrealized Gains (Losses) on Cash Flow Hedges			Pension  and Postretirement Benefit Plans			Accumulated Other Comprehensive Income
Balance at December 31, 2009	$	134,573		$	(21,319	)	$	(250	)	$	(30,490	)	$	82,514
Before tax (loss) income		(38,820	)		8,920			(706	)		287			(30,319	)
Income tax effect		—			297			268			(84	)		481
Other comprehensive (loss) income		(38,820	)		9,217			(438	)		203			(29,838	)
Balance at March 31, 2010		95,753			(12,102	)		(688	)		(30,287	)		52,676
Before tax (loss) income		(47,788	)		664			(495	)		260			(47,359	)
Income tax effect		—			(649	)		188			(75	)		(536	)
Other comprehensive (loss) income		(47,788	)		15			(307	)		185			(47,895	)
Balance at June 30, 2010	$	47,965		$	(12,087	)	$	(995	)	$	(30,102	)	$	4,781
Balance at December 31, 2010	$	69,282		$	19,095		$	(933	)	$	(26,019	)	$	61,425
Before tax income (loss)		31,245			3,524			404			(669	)		34,504
Income tax effect		—			(434	)		(154	)		(71	)		(659	)
Other comprehensive income (loss)		31,245			3,090			250			(740	)		33,845
Balance at March 31, 2011		100,527			22,185			(683	)		(26,759	)		95,270
Before tax income (loss)		17,711			(2,403	)		(23	)		136			15,421
Income tax effect		—			99			9			(34	)		74
Other comprehensive income (loss)		17,711			(2,304	)		(14	)		102			15,495
Balance at June 30, 2011	$	118,238		$	19,881		$	(697	)	$	(26,657	)	$	110,765

(1) Income taxes are generally not provided for foreign currency translation adjustments, as such adjustments relate to permanent investments in international subsidiaries.

Schedule of Comprehensive Income (Loss)

	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011		2010
Net income attributable to Gardner Denver	$	67,121	$	37,334		$	126,599	$	69,292
Other comprehensive income (loss)		15,495		(47,895	)		49,340		(77,733	)
Comprehensive income (loss) attributable to Gardner Denver		82,616		(10,561	)		175,939		(8,441	)
Net income attributable to noncontrolling interests		575		590			996		885
Other comprehensive income (loss)		196		(86	)		388		(809	)
Comprehensive income attributable to noncontrolling interests		771		504			1,384		76
Total comprehensive income (loss)	$	83,387	$	(10,057	)	$	177,323	$	(8,365	)

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash Flows From Operating Activities
Net income	$ 127,595	$ 70,177
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	30,191	30,348
Foreign currency transaction loss (gain), net	2,589	(628)
Net loss on asset dispositions	1,140	629
Stock issued for employee benefit plans	697	1,863
Stock-based compensation expense	4,262	3,022
Excess tax benefits from stock-based compensation	(2,237)	(1,903)
Deferred income taxes	(939)	(4,754)
Changes in assets and liabilities:
Receivables	(61,498)	(36,234)
Inventories	(47,318)	(10,762)
Accounts payable and accrued liabilities	71,059	6,629
Other assets and liabilities, net	(11,037)	9,230
Net cash provided by operating activities	114,504	67,617
Cash Flows From Investing Activities
Capital expenditures	(20,980)	(12,338)
Disposals of property, plant and equipment	1,124	1,154
Net cash paid in business combinations	(2,325)	(8)
Net cash used in investing activities	(22,181)	(11,192)
Cash Flows From Financing Activities
Principal payments on short-term borrowings	(10,527)	(11,804)
Proceeds from short-term borrowings	5,886	12,984
Principal payments on long-term debt	(186,309)	(43,410)
Proceeds from long-term debt	82,575	8,016
Proceeds from stock option exercises	4,918	9,712
Excess tax benefits from stock-based compensation	2,237	1,903
Purchase of treasury stock	(6,169)	(17,864)
Cash dividends paid	(5,237)	(5,246)
Acquisition of noncontrolling interests	(18,806)
Other	(1,024)	(996)
Net cash used in financing activities	(132,456)	(46,705)
Effect of exchange rate changes on cash and cash equivalents	4,451	(8,318)
Net (decrease) increase in cash and cash equivalents	(35,682)	1,402
Cash and cash equivalents, beginning of year	157,029	109,736
Cash and cash equivalents, end of period	$ 121,347	$ 111,138

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Inventories (Tables)

6 Months Ended

Jun. 30, 2011

Inventories

Schedule of Inventories

	June 30, 2011			December 31, 2010
Raw materials, including parts and subassemblies	$	199,511		$	163,192
Work-in-process		54,315			38,419
Finished goods		61,731			54,898
		315,557			256,509
Excess of FIFO costs over LIFO costs		(16,087	)		(15,024	)
Inventories, net	$	299,470		$	241,485

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Pension and Other Postretirement Benefits (Schedule of Net Periodic Benefit Cost) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
U.S. Plans [Member]
Service cost
Interest cost	897	965	1,794	1,930
Expected return on plan assets	(1,054)	(885)	(2,108)	(1,770)
Unrecognized prior service cost
Unrecognized net actuarial loss (gain)	308	359	616	718
Total net periodic benefit cost (income)	151	439	302	878
Non-U.S. Plans [Member]
Service cost	276	252	538	524
Interest cost	3,066	2,808	6,036	5,772
Expected return on plan assets	(2,829)	(2,509)	(5,586)	(5,134)
Unrecognized prior service cost	10	6	19	12
Unrecognized net actuarial loss (gain)	224	238	443	494
FASB ASC 715-30 curtailment gain				(837)
Total net periodic benefit cost (income)	747	795	1,450	831
Other Postretirement Benefits [Member]
Service cost	8	4	15	8
Interest cost	193	249	386	498
Unrecognized prior service cost	(15)	(25)	(30)	(50)
Unrecognized net actuarial loss (gain)	(318)	(325)	(636)	(650)
Total net periodic benefit cost (income)	$ (132)	$ (97)	$ (265)	$ (194)

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2011

Accrued Liabilities

Schedule of Accrued Liabilities

	June 30, 2011		December 31, 2010
Salaries, wages and related fringe benefits	$	57,751	$	50,540
Taxes		32,977		25,367
Advance payments on sales contracts		43,689		39,026
Product warranty		23,531		19,100
Other		45,741		45,008
Total accrued liabilities	$	203,689	$	179,041

Schedule of Changes in Accrued Product Warranty Liability

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Balance at beginning of period	$	21,033		$	18,134		$	19,100		$	19,312
Product warranty accruals		8,234			5,360			14,966			10,950
Settlements		(5,964	)		(5,784	)		(11,272	)		(11,985	)
Effect of foreign currency translation		228			(704	)		737			(1,271	)
Balance at end of period	$	23,531		$	17,006		$	23,531		$	17,006

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Restructuring

6 Months Ended

Jun. 30, 2011

Restructuring

Restructuring

Note 2. Restructuring

In 2008, 2009 and 2010, the Company announced restructuring plans designed to address (i) rationalization of the Company's manufacturing footprint, (ii) slowing global economic growth and the resulting deterioration in the Company's end markets, (iii) integration of CompAir Holdings Limited ("CompAir") into its existing operations and (iv) additional cost reductions and margin improvement initiatives. These plans included the closure and consolidation of manufacturing facilities in Europe and the U.S., and various voluntary and involuntary employee termination and relocation programs. Execution of these plans was substantively completed during 2010. The Company recorded additional charges during the six-month period of 2011 in connection with the continued rationalization of facilities and other cost reduction initiatives. Charges recorded in connection with these plans, in accordance with FASB ASC 420, Exit or Disposal Cost Obligations and FASB ASC 712, Compensation-Nonretirement Postemployment Benefits, are included in "Other operating expense, net" in the Condensed Consolidated Statements of Operations, and are summarized for the fiscal years ended December 31, 2009 and 2010 and the six-month period ended June 30, 2011 by reportable segment as follows:

	Industrial Products Group		Engineered Products Group			Total
Fiscal year 2009	$	25,791	$	20,335		$	46,126
Fiscal year 2010		3,687		(1,491	)		2,196
Six months ended June 30, 2011		3,571		392			3,963
Total	$	33,049	$	19,236		$	52,285

The following table summarizes the activity in the restructuring accrual accounts:

	Termination Benefits			Other			Total
Balance as of December 31, 2010	$	4,593		$	1,450		$	6,043
Charged to expense		3,279			684			3,963
Paid		(4,333	)		(1,193	)		(5,526	)
Other, net		667			40			707
Balance as of June 30, 2011	$	4,206		$	981		$	5,187

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Hedging Activities and Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Hedging Activities and Fair Value Measurements

Hedging Activities and Fair Value Measurements

Note 11. Hedging Activities and Fair Value Measurements

Hedging Activities

The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in commodity prices, interest rates, and foreign currency exchange rates. The Company's exposure to these risks is managed through a combination of operating and financing activities. The Company selectively uses derivative financial instruments ("derivatives"), including foreign currency forward contracts and interest rate swaps, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively. The Company does not purchase or hold derivatives for trading or speculative purposes. Fluctuations in commodity prices, interest rates, and foreign currency exchange rates can be volatile, and the Company's risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company's financial results.

The Company's exposure to interest rate risk results primarily from its borrowings of $186.3 million at June 30, 2011. The Company manages its debt centrally, considering tax consequences and its overall financing strategies. The Company manages its exposure to interest rate risk by maintaining a mixture of fixed and variable rate debt and, from time to time, uses pay-fixed interest rate swaps as cash flow hedges of variable rate debt in order to adjust the relative proportions.

A substantial portion of the Company's operations is conducted by its subsidiaries outside of the U.S. in currencies other than the USD. Almost all of the Company's non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. The USD, EUR, British pound sterling ("GBP"), and Chinese yuan ("CNY") are the principal currencies in which the Company and its subsidiaries enter into transactions. The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries' assets, liabilities, and earnings into USD. The Company partially offsets these exposures by having certain of its non-U.S. subsidiaries act as the obligor on a portion of its borrowings and by denominating such borrowings, as well as a portion of the borrowings for which the Company is the obligor, in currencies other than the USD.

The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances monthly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.

In accordance with FASB ASC 815, Derivatives and Hedging ("FASB ASC 815"), the Company records its derivatives as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are recognized either in net income or in other comprehensive income, depending on the designated purpose of the derivative. All cash flows associated with derivatives are classified as operating cash flows in the Condensed Consolidated Statements of Cash Flows. It is the Company's policy not to speculate in derivative instruments.

Fluctuations due to changes in foreign currency exchange rates in the value of non-USD borrowings that have been designated as hedges of the Company's net investment in foreign operations are included in other comprehensive income.

The following tables summarize the notional amounts, fair values and classification of the Company's outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets:

	June 30, 2011
	Balance Sheet Location	Notional Amount (1)		Asset Derivatives Fair Value (1)		Liability Derivatives Fair Value (1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	79,002	$	—	$	1,172
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Current assets	$	10,389	$	620	$	—
Foreign currency forwards	Current liabilities	$	87,788	$	499	$	2,774

	December 31, 2010
	Balance Sheet Location	Notional Amount (1)		Asset Derivatives Fair Value (1)		Liability Derivatives Fair Value (1)
Derivatives designated as hedging instruments under FASB ASC 815
Interest rate swap contracts	Other liabilities	$	76,742	$	—	$	1,560
Derivatives not designated as hedging instruments under FASB ASC 815
Foreign currency forwards	Accrued liabilities	$	113,871	$	709	$	1,884

(1) Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

Gains and losses on derivatives designated as cash flow hedges in accordance with FASB ASC 815 included in the Condensed Consolidated Statements of Operations for the three and six-month periods ended June 30, 2011 and 2010, respectively, are as presented in the table below:

	Three Months Ended June 30,						Six Months Ended June 30,
Interest rate swap contracts (1)	2011			2010			2011			2010
Amount of gain or (loss) recognized in AOCI on derivatives (effective portion)	$	(292	)	$	(825	)	$	(170	)	$	(1,912	)
Amount of gain or (loss) reclassified from AOCI into income (effective portion)		(269	)		(330	)		(551	)		(711	)
Amount of gain or (loss) recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)		—			(5	)		(1	)		(5	)

(1) Losses on derivatives reclassified from accumulated other comprehensive income ("AOCI") into income (effective portion) were included in the interest expense line on the face of the Condensed Consolidated Statements of Operations.

At June 30, 2011, the Company is the fixed rate payor on three interest rate swap contracts that effectively fix the LIBOR-based index used to determine the interest rates charged on a total of $50.0 million and €20.0 million of the Company's LIBOR-based variable rate borrowings. These contracts carry fixed rates ranging from 1.8% to 2.2% and have expiration dates ranging from 2012 to 2013. These swap agreements qualify as hedging instruments and have been designated as cash flow hedges of forecasted LIBOR-based interest payments. Based on LIBOR-based swap yield curves as of June 30, 2011, the Company expects to reclassify losses of $0.8 million out of AOCI into earnings during the next 12 months. The Company's LIBOR-based variable rate borrowings outstanding at June 30, 2011 were $68.1 million and €44.3 million.

There were 44 foreign currency forward contracts outstanding as of June 30, 2011 with notional amounts ranging from $0.1 million to $11.3 million. The Company has not designated any forward contracts as hedging instruments. The majority of these contracts are used to hedge the change in fair value of recognized foreign currency denominated assets or liabilities caused by changes in foreign currency exchange rates. The changes in the fair value of these contracts generally offset the changes in the fair value of a corresponding amount of the hedged items, both of which are included in the other operating expense, net, line on the face of the Condensed Consolidated Statements of Operations. The Company's gains and (losses) on forward currency contracts outstanding and total net foreign currency gains and (losses) for the three and six-month periods ended June 30, 2011 and 2010 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Foreign currency forward contracts	$	(1,586	)	$	2,188		$	(2,005	)	$	5,360
Total net foreign currency (losses) and gains (1)		(1,344	)		(373	)		(2,589	)		628

(1) See Note 13 "Supplemental Information"

As of June 30, 2011, the Company had designated approximately €25.5 million of its term loan denominated in EUR as a hedge of its net investment in subsidiaries with EUR functional currencies. Accordingly, changes in the fair value of this debt due to changes in the USD to EUR exchange rate have been recorded through other comprehensive income. The Company's gains and (losses), net of income tax, associated with changes in the fair value of this debt for the three and six-month periods ended June 30, 2011 and 2010, and the net balance of such gains and losses at June 30, 2011 and 2010 were as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
(Loss) gain, net of income tax, recorded through other comprehensive income	$	(317	)	$	1,566	$	(317	)	$	2,637
Balance included in accumulated other comprehensive income at June 30							(5,450	)		(2,809	)

Fair Value Measurements

The Company's financial instruments consist primarily of cash equivalents, trade receivables, trade payables, deferred compensation assets and obligations, derivatives and debt instruments. The book values of these instruments are a reasonable estimate of their respective fair values.

The following table summarizes the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2011:

	Level 1		Level 2		Level 3		Total
Financial Assets
Foreign currency forwards (1)	$	—	$	1,119	$	—	$	1,119
Trading securities held in deferred compensation plan (2)		6,334		—		—		6,334
Total	$	6,334	$	1,119	$	—	$	7,453
Financial Liabilities
Foreign currency forwards (1)	$	—	$	2,774	$	—	$	2,774
Interest rate swaps (3)		—		1,172		—		1,172
Phantom stock plan (4)		—		6,069		—		6,069
Deferred compensation plan (5)		6,334		—		—		6,334
Total	$	6,334	$	10,015	$	—	$	16,349

(1) Based on internally-developed models that use as their basis readily observable market parameters such as current spot and forward rates, and the LIBOR index.

(2) Based on the observable price of publicly traded mutual funds which, in accordance with FASB ASC 710, Compensation – General, are classified as "Trading" securities and accounted for using the mark-to-market method.

(3) Measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of June 30, 2011. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparties.

(4) Based on the price of the Company's common stock.

(5) Based on the fair value of the investments in the deferred compensation plan.

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Accumulated Other Comprehensive Income (Loss) (Schedule of Comprehensive Income (Loss)) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Accumulated Other Comprehensive Income (Loss)
Net income attributable to Gardner Denver	$ 67,121	$ 37,334	$ 126,599	$ 69,292
Other comprehensive income (loss)	15,495	(47,895)	49,340	(77,733)
Comprehensive income (loss) attributable to Gardner Denver	82,616	(10,561)	175,939	(8,441)
Net income attributable to noncontrolling interests	575	590	996	885
Other comprehensive income (loss)	196	(86)	388	(809)
Comprehensive income attributable to noncontrolling interests	771	504	1,384	76
Total comprehensive income (loss)	$ 83,387	$ (10,057)	$ 177,323	$ (8,365)

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Hedging Activities and Fair Value Measurements (Schedule of Gains and (Losses) on Forward Currency Contracts Outstanding and Total Net Foreign Currency Gains and (Losses)) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Hedging Activities and Fair Value Measurements
Foreign currency forward contracts	$ (1,586)		$ 2,188		$ (2,005)		$ 5,360
Total net foreign currency gains and (losses)	$ (1,344)	[1]	$ (373)	[1]	$ (2,589)	[1]	$ 628	[1]

[1] See Note 13 "Supplemental Information"

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Restructuring (Schedule of Restructuring Charges by Reportable Segment) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended				12 Months Ended		30 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010		Dec. 31, 2010	Dec. 31, 2009	Jun. 30, 2011
Restructuring Charges	$ 2,983	[1]	$ 1,342	[1]	$ 3,963	[1]	$ 2,696	[1]	$ 2,196	$ 46,126	$ 52,285
Industrial Products Group [Member]
Restructuring Charges					3,571				3,687	25,791	33,049
Engineered Products Group [Member]
Restructuring Charges					$ 392				$ (1,491)	$ 20,335	$ 19,236

[1] See Note 2 "Restructuring."

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Segment Results

6 Months Ended

Jun. 30, 2011

Segment Results

Segment Results

Note 15. Segment Results

The Company has determined its reportable segments in accordance with FASB ASC 280, Segment Reporting ("FASB ASC 280"), and evaluates the performance of its reportable segments based on, among other measures, operating income, which is defined as income before interest expense, other expense (income), net, and income taxes. Reportable segment operating income and segment operating margin (defined as segment operating income divided by segment revenues) are indicative of short-term operating performance and ongoing profitability. Management closely monitors the operating income and operating margin of each reportable segment to evaluate past performance and actions required to improve profitability.

In the Industrial Products Group, the Company designs, manufactures, markets and services the following products and related aftermarket parts for industrial and commercial applications: rotary screw, reciprocating, and sliding vane air and gas compressors; positive displacement, centrifugal and side channel blowers; and vacuum pumps primarily serving manufacturing, transportation and general industry and selected OEM and engineered system applications. The Company also markets and services complementary ancillary products. Stationary air compressors are used in manufacturing, process applications and materials handling, and to power air tools and equipment. Blowers are used primarily in pneumatic conveying, wastewater aeration, numerous applications in industrial manufacturing and engineered vacuum systems. The markets served are primarily in Europe, the U.S. and Asia.

In the Engineered Products Group, the Company designs, manufactures, markets and services a diverse group of pumps, compressors, liquid ring vacuum pumps, water jetting and loading arm systems and related aftermarket parts. These products are used in well drilling, well servicing and production of oil and natural gas; industrial, commercial and transportation applications; and in industrial cleaning and maintenance. Liquid ring pumps are used in many different applications such as water removal, distilling, reacting, flare gas recovery, efficiency improvement, lifting and handling, and filtering, principally in the pulp and paper, industrial manufacturing, petrochemical and power industries. This segment also designs, manufactures, markets and services other engineered products and components and equipment for the chemical, petroleum and food industries. The markets served are primarily in the U.S., Europe, Canada and Asia.

The following table provides financial information by business segment for the three and six-month periods ended June 30, 2011 and 2010:

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Industrial Products Group
Revenues	$	327,846		$	268,650		$	614,056		$	515,044
Operating income		34,325			20,157			65,127			39,710
Operating income as a percentage of revenues		10.5	%		7.5	%		10.6	%		7.7	%
Engineered Products Group
Revenues	$	282,847		$	180,869		$	528,490		$	356,639
Operating income		64,847			36,430			120,868			64,341
Operating income as a percentage of revenues		22.9	%		20.1	%		22.9	%		18.0	%
Reconciliation of Segment Results to Consolidated Results
Total segment operating income	$	99,172		$	56,587		$	185,995		$	104,051
Interest expense		3,934			6,062			9,281			12,178
Other expense (income), net		279			(2	)		(683	)		(637	)
Consolidated income before income taxes	$	94,959		$	50,527		$	177,397		$	92,510

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Operations
Revenues	$ 610,693	$ 449,519	$ 1,142,546	$ 871,683
Cost of sales	400,425	297,919	747,822	586,276
Gross profit	210,268	151,600	394,724	285,407
Selling and administrative expenses	105,009	91,745	201,030	179,439
Other operating expense, net	6,087	3,268	7,699	1,917
Operating income	99,172	56,587	185,995	104,051
Interest expense	3,934	6,062	9,281	12,178
Other expense (income), net	279	(2)	(683)	(637)
Income before income taxes	94,959	50,527	177,397	92,510
Provision for income taxes	27,263	12,603	49,802	22,333
Net income	67,696	37,924	127,595	70,177
Less: Net income attributable to noncontrolling interests	575	590	996	885
Net income attributable to Gardner Denver	$ 67,121	$ 37,334	$ 126,599	$ 69,292
Net earnings per share attributable to Gardner Denver common stockholders
Basic earnings per share	$ 1.28	$ 0.71	$ 2.42	$ 1.33
Diluted earnings per share	$ 1.27	$ 0.71	$ 2.40	$ 1.31
Cash dividends declared per common share	$ 0.05	$ 0.05	$ 0.10	$ 0.10

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Inventories (Schedule of Inventories) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Inventories
Raw materials, including parts and subassemblies	$ 199,511	$ 163,192
Work-in-process	54,315	38,419
Finished goods	61,731	54,898
Inventories, gross	315,557	256,509
Excess of FIFO costs over LIFO costs	(16,087)	(15,024)
Inventories, net	$ 299,470	$ 241,485

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Stock-Based Compensation (Schedule of Valuation Assumptions) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock-Based Compensation
Risk-free interest rate	1.40%	1.70%	1.90%	2.30%
Dividend yield	0.20%	0.50%	0.30%	0.50%
Volatility factor	45.00%	46.00%	44.00%	43.00%
Expected life (in years)	3.8	3.8	4.3	4.7

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Hedging Activities and Fair Value Measurements (Schedule of Notional Amounts, Fair Values and Classification of the Company's Outstanding Derivatives by Risk Category and Instrument Type) (Details) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
Designated as Hedging Instrument [Member] | Other Liabilities [Member] | Interest Rate Swaps Contracts [Member]
Notional Amount	$ 79,002	[1]	$ 76,742	[1]
Asset Derivatives Fair Value		[1]		[1]
Liability Derivatives Fair Value	1,172	[1]	1,560	[1]
Not Designated as Hedging Instrument [Member] | Accrued Liabilities [Member] | Foreign Currency Forwards [Member]
Notional Amount			113,871	[1]
Asset Derivatives Fair Value			709	[1]
Liability Derivatives Fair Value			1,884	[1]
Not Designated as Hedging Instrument [Member] | Current Assets [Member] | Foreign Currency Forwards [Member]
Notional Amount	10,389	[1]
Asset Derivatives Fair Value	620	[1]
Not Designated as Hedging Instrument [Member] | Current Liabilities [Member] | Foreign Currency Forwards [Member]
Notional Amount	87,788	[1]
Asset Derivatives Fair Value	499	[1]
Liability Derivatives Fair Value	$ 2,774	[1]

[1] Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.

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Debt (Schedule of Debt and Capital Lease Obligations) (Details) In Thousands, unless otherwise specified	0 Months Ended			6 Months Ended				6 Months Ended				6 Months Ended
	May 02, 2011 USD ($)	Jun. 30, 2011 USD ($)	Dec. 31, 2010 USD ($)	Jun. 30, 2011 Credit Line, Due 2013 [Member] USD ($)		Dec. 31, 2010 Credit Line, Due 2013 [Member] USD ($)		Jun. 30, 2011 Term Loan, Denominated in U.S. Dollars, Due 2013 [Member] USD ($)		Dec. 31, 2010 Term Loan, Denominated in U.S. Dollars, Due 2013 [Member] USD ($)		Jun. 30, 2011 Term Loan, Denominated in Euros ("EUR"), Due 2013 [Member] USD ($)		Dec. 31, 2010 Term Loan, Denominated in Euros ("EUR"), Due 2013 [Member] USD ($)		Jun. 30, 2011 Senior Subordinated Notes at 8%, Due 2013 [Member]	Dec. 31, 2010 Senior Subordinated Notes at 8%, Due 2013 [Member] USD ($)		Jun. 30, 2011 Secured Mortgages [Member] USD ($)		Jun. 30, 2011 Secured Mortgages [Member] EUR (€)		Dec. 31, 2010 Secured Mortgages [Member] USD ($)		Jun. 30, 2011 Capitalized Leases and Other Long-Term Debt [Member] USD ($)	Dec. 31, 2010 Capitalized Leases and Other Long-Term Debt [Member] USD ($)
Short-term debt		$ 2,951	$ 7,440
Total long-term debt, including current maturities	125,000	183,367	280,470	35,000	[1]		[1]	68,077	[2]	75,000	[2]	64,233	[3]	65,250	[3]		125,000	[4]	7,610	[5]	5,248	[5]	7,322	[5]	8,447	7,898
Current maturities of long-term debt		35,059	29,788
Total long-term debt, less current maturities		148,308	250,682
Interest rate of loan varies with LIBOR and/or prime and/or federal funds				1.80%				2.20%				3.20%
Average interest rate of loan with LIBOR and/or prime and/or federal funds				2.10%				2.30%				3.00%
Interest rate on Senior Subordinated Notes	8.00%															8.00%
Debt maturity date				2013				2013				2013				2013
Write off of unamortized debt issue cost	$ 834

[1] The loans under this facility may be denominated in USD or several foreign currencies. The interest rates under the facility are based on prime, federal funds and/or LIBOR for the applicable currency. At June 30, 2011, the applicable rate was 1.8% and averaged 2.1% for the six-month period ended June 30, 2011.

[2] The interest rate for this loan varies with prime, federal funds and/or LIBOR. At June 30, 2011, the applicable rate was 2.2% and averaged 2.3% for the six-month period ended June 30, 2011.

[3] The interest rate for this loan varies with LIBOR. At June 30, 2011, this rate was 3.2% and averaged 3.0% for the six-month period ended June 30, 2011.

[4] On May 2, 2011, the Company redeemed all $125.0 million in aggregate principal amount outstanding of its Senior Subordinated Notes at 8%, plus accrued and unpaid interest. As a result, the Company wrote off $834 of unamortized debt issue cost.

[5] This amount consists of two fixed-rate commercial loans with an outstanding balance of €5,248 at June 30, 2011. The loans are secured by the Company's facility in Bad Neustadt, Germany.

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Stock-Based Compensation (Schedule of Stock-Based Compensation Expense and Realized Excess Tax Benefits) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Selling and administrative expenses	$ 105,009	$ 91,745	$ 201,030	$ 179,439
Income (loss) before income taxes	94,959	50,527	177,397	92,510
Provision for income taxes	(27,263)	(12,603)	(49,802)	(22,333)
Net income	67,696	37,924	127,595	70,177
Net cash provided by operating activities			114,504	67,617
Net cash used in financing activities			(132,456)	(46,705)
Stock-Based Compensation [Member]
Selling and administrative expenses	1,928	1,165	4,262	3,022
Total stock-based compensation expense included in operating expenses	1,928	1,165	4,262	3,022
Income (loss) before income taxes	(1,928)	(1,165)	(4,262)	(3,022)
Provision for income taxes	573	357	1,232	964
Net income	(1,355)	(808)	(3,030)	(2,058)
Net cash provided by operating activities	(724)	(414)	(2,237)	(1,903)
Net cash used in financing activities	$ 724	$ 414	$ 2,237	$ 1,903

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Accumulated Other Comprehensive Income (Loss) (Component of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended		3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011 Cumulative Currency Translation Adjustment [Member]		Mar. 31, 2011 Cumulative Currency Translation Adjustment [Member]		Jun. 30, 2010 Cumulative Currency Translation Adjustment [Member]		Mar. 31, 2010 Cumulative Currency Translation Adjustment [Member]		Jun. 30, 2011 Foreign Currency Gains (Losses) [Member]	Mar. 31, 2011 Foreign Currency Gains (Losses) [Member]	Jun. 30, 2010 Foreign Currency Gains (Losses) [Member]	Mar. 31, 2010 Foreign Currency Gains (Losses) [Member]	Jun. 30, 2011 Unrealized Gains (Losses) on Cash Flow Hedges [Member]	Mar. 31, 2011 Unrealized Gains (Losses) on Cash Flow Hedges [Member]	Jun. 30, 2010 Unrealized Gains (Losses) on Cash Flow Hedges [Member]	Mar. 31, 2010 Unrealized Gains (Losses) on Cash Flow Hedges [Member]	Jun. 30, 2011 Pension and Postretirement Benefit Plans [Member]	Mar. 31, 2011 Pension and Postretirement Benefit Plans [Member]	Jun. 30, 2010 Pension and Postretirement Benefit Plans [Member]	Mar. 31, 2010 Pension and Postretirement Benefit Plans [Member]	Jun. 30, 2011 Accumulated Other Comprehensive Income [Member]	Mar. 31, 2011 Accumulated Other Comprehensive Income [Member]	Jun. 30, 2010 Accumulated Other Comprehensive Income [Member]	Mar. 31, 2010 Accumulated Other Comprehensive Income [Member]
Balance at beginning of period			$ 61,425		$ 100,527	[1]	$ 69,282	[1]	$ 95,753	[1]	$ 134,573	[1]	$ 22,185	$ 19,095	$ (12,102)	$ (21,319)	$ (683)	$ (933)	$ (688)	$ (250)	$ (26,759)	$ (26,019)	$ (30,287)	$ (30,490)	$ 95,270	$ 61,425	$ 52,676	$ 82,514
Before tax (loss) income					17,711	[1]	31,245	[1]	(47,788)	[1]	(38,820)	[1]	(2,403)	3,524	664	8,920	(23)	404	(495)	(706)	136	(669)	260	287	15,421	34,504	(47,359)	(30,319)
Income tax effect										[1]		[1]	99	(434)	(649)	297	9	(154)	188	268	(34)	(71)	(75)	(84)	74	(659)	(536)	481
Other comprehensive income (loss)	15,495	(47,895)	49,340	(77,733)	17,711	[1]	31,245	[1]	(47,788)	[1]	(38,820)	[1]	(2,304)	3,090	15	9,217	(14)	250	(307)	(438)	102	(740)	185	203	15,495	33,845	(47,895)	(29,838)
Balance at ending of period	$ 110,765		$ 110,765		$ 118,238	[1]	$ 100,527	[1]	$ 47,965	[1]	$ 95,753	[1]	$ 19,881	$ 22,185	$ (12,087)	$ (12,102)	$ (697)	$ (683)	$ (995)	$ (688)	$ (26,657)	$ (26,759)	$ (30,102)	$ (30,287)	$ 110,765	$ 95,270	$ 4,781	$ 52,676

[1] Income taxes are generally not provided for foreign currency translation adjustments, as such adjustments relate to permanent investments in international subsidiaries.

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Goodwill and Other Intangible Assets (Narrative) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Goodwill and Other Intangible Assets
Anticipated amortization of intangible assets in 2012	$ 17,000,000
Anticipated amortization of intangible assets in 2013	17,000,000
Anticipated amortization of intangible assets in 2014	17,000,000
Anticipated amortization of intangible assets in 2015	17,000,000
Increase in goodwill related to acquisitions associated with the preliminary valuation		$ 5,202,000