UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 30, 2014
________________________________
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
________________________________
State of Delaware | 1-4018 | 53-0257888 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3005 Highland Parkway | ||
Downers Grove, Illinois | 60515 | |
(Address of principal executive offices) | (Zip Code) | |
(630) 541-1540
(Registrant’s telephone number, including area code)
______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On January 30, 2014, Dover Corporation (i) issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the year ended December 31, 2013; and (ii) posted on its website at
http://www.dovercorporation.com the presentation slides attached hereto as Exhibit 99.2 for the year ended December 31, 2013.
The information in this Current Report on Form 8-K, including exhibits, is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be incorporated by reference into any of Dover’s filings with the SEC under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this report:
99.1 Dover Corporation Press Release dated January 30, 2014.
99.2 Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | January 30, 2014 | DOVER CORPORATION | ||
(Registrant) | ||||
By: | /s/ Ivonne M. Cabrera | |||
Ivonne M. Cabrera | ||||
Senior Vice President, General Counsel & Secretary | ||||
EXHIBIT INDEX
Number | Exhibit | |
99.1 | Press Release of Dover Corporation dated January 30, 2014 | |
99.2 | Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com | |
Exhibit 99.1
CONTACT: | ||
Paul Goldberg | ||
Vice President - Investor Relations | ||
(212) 922-1640 | ||
DOVER REPORTS FOURTH QUARTER AND FULL YEAR 2013 RESULTS; PROVIDES 2014 GUIDANCE ON A PRO FORMA BASIS
• | Reports quarterly revenue of $2.2 billion, an increase of 10% over the prior year |
• | Delivers quarterly diluted earnings per share from continuing operations of $1.22, an increase of 5% over last year |
• | Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.28, excluding Knowles spin-off costs of $0.09 and tax benefits of $0.03, up 17% from an adjusted prior year |
• | Expects 2014 full year revenue growth of 5% to 6% and pro forma diluted earnings per share of $4.60 to $4.80, excluding Knowles and related spin-off costs |
• | Remains on track to complete the spin-off of Knowles before the end of the first quarter 2014 |
Downers Grove, Illinois, January 30, 2014 — Dover (NYSE: DOV) today announced financial results for the fourth quarter and full year ended December 31, 2013. In addition, the Company is providing pro forma unaudited financial data for Dover, excluding Knowles and related spin-off costs, for the full year ended December 31, 2013. The planned spin-off of Knowles remains on track and is expected to be finalized before the end of the first quarter 2014.
Dover Results (including Knowles)
Revenue for the fourth quarter ended December 31, 2013 was $2.2 billion, an increase of 10% over the prior year period. The revenue increase was driven by organic growth of 5% and a 5% increase from acquisitions. Earnings from continuing operations were $210.8 million, or $1.22 diluted earnings per share (“EPS”), compared to $208.2 million, or $1.16 EPS, in the prior year period, representing increases of 1% and 5%, respectively. EPS from continuing operations includes Knowles spin-off costs of $0.09 EPS and discrete tax benefits of $0.03 recognized in the current quarter. Excluding these items and a $0.07 EPS tax benefit recognized in the prior year period, adjusted EPS from continuing operations for the fourth quarter of 2013 was $1.28, reflecting an increase of 17% over an adjusted EPS of $1.09 in the prior year period.
Revenue for the year ended December 31, 2013, was $8.7 billion, an increase of 8% over the prior year, reflecting organic growth of 3% and a 5% increase from acquisitions. Earnings from continuing operations for the year ended December 31, 2013, were $965.8 million, or $5.57 EPS, compared to $833.1 million, or $4.53 EPS in the prior year period, representing increases of 16% and 23%, respectively. EPS from continuing operations for the year includes Knowles spin-off costs of $0.17 EPS, discrete tax benefits of $0.44 EPS, and other one-time gains of $0.02 compared to $0.09 EPS of discrete tax benefits in the prior year. Excluding these items, adjusted EPS from continuing operations for the year ended December 31, 2013 was $5.28, an increase of 19% over an adjusted EPS of $4.44 in the prior year.
Commenting on the fourth quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, “I am very pleased with our fourth quarter results as we achieved solid organic growth in all segments. Our broad-based order and shipment activity was particularly strong at our businesses serving the refrigeration and food equipment, fast moving consumer goods, fluids, drilling and downstream energy markets. In the consumer electronics market, our strong position with a key OEM allowed us to grow nicely despite continuing headwinds at two other customers. Additionally, we closed on several acquisitions in the quarter, notably in the fluids and downstream energy spaces, and raised €300 million in the debt market. These actions have positioned us well as we move into 2014.”
“For the year, we generated over $940 million in free cash flow. We continued to make significant internal and acquisition investments in our key growth spaces, increased the dividend for the 58th consecutive year, and progressed as planned on our $1 billion share repurchase program.”
Net earnings for the fourth quarter of 2013 were $194.0 million or $1.13 EPS, including a loss from discontinued operations of $16.8 million, or $0.10 EPS, compared to net earnings of $159.9 million, or $0.89 EPS, for the same period of 2012, which included a loss from discontinued operations of $48.4 million, or $0.27 EPS. Reflected within discontinued operations were impairment charges of $14.0 million, or $0.08 EPS, in 2013 and $51.9 million, or $0.29 EPS, in 2012, connected with the anticipated sale of our electronic test and assembly businesses.
Net earnings for the year ended December 31, 2013 were $1.0 billion, or $5.78 EPS, including net earnings from discontinued operations of $37.3 million, or $0.22 EPS, compared to net earnings of $811.1 million, or $4.41 EPS, for the same period of 2012, which included a net loss from discontinued operations of $22.0 million or $0.12 EPS. Reflected within discontinued operations were impairment charges connected with the anticipated sale of our electronic test and assembly businesses of $32.7 million, net of tax, or $0.19 EPS in 2013, and $51.9 million, net of tax, or $0.28 EPS in 2012, and discrete tax benefits of $54.8 million, or $0.32 EPS in 2013.
Dover Results (excluding Knowles) Pro Forma
In connection with the spin-off, certain pro forma unaudited financial data is being provided for Dover, excluding Knowles and related spin-off costs, for the year ending December 31, 2013. Effective with the anticipated first quarter spin-off, it is expected that Knowles will be accounted for as a discontinued operation in the Company’s financial statements.
Revenue for the year ended December 31, 2013 was $7.5 billion, an increase of 8% over the prior year. Earnings from continuing operations for the year ended December 31, 2013, were $832 million, or $4.79 EPS, increases of 21% and 28% over the prior year, respectively. Adjusted EPS from continuing operations for the year ended December 31, 2013 was $4.31, representing an increase of 18% over an adjusted prior year period.
Dover Outlook (excluding Knowles) Pro Forma
Mr. Livingston continued, “We are very excited about the strength and positioning of Dover. Our markets are improving and our team is executing at a high level, as evidenced by our second half growth rates. Accordingly, we expect the strong performance we saw in the fast moving consumer goods and refrigeration markets to continue into 2014. We also expect the solid market conditions for our fluids and downstream energy businesses to carryover from the fourth quarter. Finally, within Energy we anticipate improved North American markets for our drilling and artificial lift businesses, along with continued geographic expansion. In all, excluding Knowles, we expect full year organic growth of 3% to 4% complemented by acquisition growth of 2%, resulting in revenue growth of 5% to 6%. The benefits of our lean and productivity initiatives, leverage on volume, and
a lower share count from our ongoing repurchase program will drive solid EPS growth. As a result, we anticipate full year diluted EPS from continuing operations to be in the range of $4.60 - $4.80 on a pro forma basis excluding Knowles and related spin-off costs. At the mid-point, our guidance represents a 9% increase.”
Dover will host a webcast of its fourth quarter 2013 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 30, 2014. The webcast can be accessed on the Dover website at www.dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover’s fourth quarter results and its operating segments can also be found on the Company’s website.
About Dover:
Dover is a diversified global manufacturer with annual revenues approaching $8 billion. For over 50 years, Dover has been delivering outstanding products and services that reflect its market leadership and commitment to operational and technical excellence. The Company's entrepreneurial business model encourages, promotes and fosters deep customer engagement which has led to Dover's well-established and valued reputation for providing superior customer service and industry-leading product innovation. Dover focuses on innovative equipment and components, specialty systems and support services through its four major operating segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Headquartered in Downers Grove, Illinois, Dover is traded on the New York Stock Exchange under “DOV.” Additional information is available on our website at www.dovercorporation.com.
Forward-Looking Statement:
This press release contains “forward-looking” statements within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, 2014 revenue growth and earnings per share, expected performance following the completion of the planned spin-off of Knowles, anticipated market conditions and our positioning, expected contributions from acquisitions, as well as productivity initiatives, leverage on increased sales and share repurchase activities, operating and strategic plans, cash flows, industries in which Dover businesses operate and the U.S. and global economies. The forward-looking statements in this release may be indicated by words or phrases such as “anticipate,” “expect,” “believe,” “indicate,” “suggests,” “will,” “plans,” “supports,” “projects,” “should,” “would,” “could,” “forecast” and “management is of the opinion,” or the use of the future tense. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, the state of the worldwide economy and sovereign credit; political events; the impact of natural disasters and their effect on global supply chains and energy markets; current economic conditions and uncertainties in the credit and capital markets; instability in countries where we conduct business; our ability to expand into new geographic markets and to anticipate and meet customer demands for new products; increased competition and pricing pressures in our markets; the impact of the proposed spin-off and our ability to consummate it as anticipated; the terms and timing of the sale of any business in discontinued operations; the impact of loss of a single-source manufacturing facility; changes in customer demand or loss of a significant customer; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes including environmental regulations, conflict minerals disclosure requirements, and tax policies (including domestic and international export subsidy programs, R&E credits and other similar programs); protection and validity of patent and other intellectual property rights; our ability to identify and successfully consummate value-adding acquisition opportunities; our ability to achieve expected savings from integration, synergy and other cost-control initiatives; unforeseen
developments in contingencies such as litigation; international economic conditions including interest rate and currency exchange rate fluctuations; possible future terrorist threats and their effect on the worldwide economy; and a downgrade in our credit ratings. It also contains unaudited pro forma financial information for Dover excluding Knowles, which is not necessarily indicative of Dover’s operating results for any future period. We refer you to the documents we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statement, except as required by law.
INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2013
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenue | $ | 2,209,128 | $ | 2,013,831 | $ | 8,729,813 | $ | 8,104,339 | |||||||
Cost of goods and services | 1,378,571 | 1,240,087 | 5,390,032 | 4,997,274 | |||||||||||
Gross profit | 830,557 | 773,744 | 3,339,781 | 3,107,065 | |||||||||||
Selling and administrative expenses | 513,516 | 469,668 | 1,985,849 | 1,841,688 | |||||||||||
Operating earnings | 317,041 | 304,076 | 1,353,932 | 1,265,377 | |||||||||||
Interest expense, net | 29,981 | 30,996 | 120,742 | 121,141 | |||||||||||
Other (income) expense, net | (3,016 | ) | 809 | (4,222 | ) | 6,665 | |||||||||
Earnings before provision for income taxes and discontinued operations | 290,076 | 272,271 | 1,237,412 | 1,137,571 | |||||||||||
Provision for income taxes | 79,264 | 64,047 | 271,607 | 304,452 | |||||||||||
Earnings from continuing operations | 210,812 | 208,224 | 965,805 | 833,119 | |||||||||||
Earnings (loss) from discontinued operations, net | (16,849 | ) | (48,364 | ) | 37,324 | (22,049 | ) | ||||||||
Net earnings | $ | 193,963 | $ | 159,860 | $ | 1,003,129 | $ | 811,070 | |||||||
Basic earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.24 | $ | 1.17 | $ | 5.64 | $ | 4.59 | |||||||
Earnings (loss) from discontinued operations, net | (0.10 | ) | (0.27 | ) | 0.22 | (0.12 | ) | ||||||||
Net earnings | 1.14 | 0.90 | 5.86 | 4.47 | |||||||||||
Weighted average shares outstanding | 170,027 | 177,257 | 171,271 | 181,551 | |||||||||||
Diluted earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 1.22 | $ | 1.16 | $ | 5.57 | $ | 4.53 | |||||||
Earnings (loss) from discontinued operations, net | (0.10 | ) | (0.27 | ) | 0.22 | (0.12 | ) | ||||||||
Net earnings | 1.13 | 0.89 | 5.78 | 4.41 | |||||||||||
Weighted average shares outstanding | 172,265 | 179,365 | 173,547 | 183,993 | |||||||||||
Dividends paid per common share | $ | 0.375 | $ | 0.350 | $ | 1.450 | $ | 1.330 | |||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY 2013 | Q1 | Q2 | Q3 | Q4 | FY 2012 | ||||||||||||||||||||||
REVENUE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 372,790 | $ | 401,477 | $ | 413,608 | $ | 428,392 | $ | 1,616,267 | $ | 357,575 | $ | 361,689 | $ | 396,470 | $ | 400,851 | $ | 1,516,585 | |||||||||||
Energy | 561,198 | 573,471 | 577,350 | 584,435 | 2,296,454 | 531,570 | 538,786 | 562,263 | 539,985 | 2,172,604 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 203,991 | 226,882 | 227,104 | 243,816 | 901,793 | 180,364 | 211,974 | 218,324 | 206,500 | 817,162 | |||||||||||||||||||||
Refrigeration & Industrial | 664,294 | 777,396 | 778,336 | 676,582 | 2,896,608 | 642,213 | 674,501 | 674,116 | 613,012 | 2,603,842 | |||||||||||||||||||||
Eliminations | (352 | ) | (383 | ) | (485 | ) | (472 | ) | (1,692 | ) | (453 | ) | (352 | ) | (319 | ) | (336 | ) | (1,460 | ) | |||||||||||
867,933 | 1,003,895 | 1,004,955 | 919,926 | 3,796,709 | 822,124 | 886,123 | 892,121 | 819,176 | 3,419,544 | ||||||||||||||||||||||
Printing & Identification | 237,877 | 250,646 | 256,571 | 276,681 | 1,021,775 | 243,570 | 251,875 | 246,945 | 254,141 | 996,531 | |||||||||||||||||||||
Intra-segment eliminations | (225 | ) | (726 | ) | (135 | ) | (306 | ) | (1,392 | ) | (225 | ) | (184 | ) | (194 | ) | (322 | ) | (925 | ) | |||||||||||
Total consolidated revenue | $ | 2,039,573 | $ | 2,228,763 | $ | 2,252,349 | $ | 2,209,128 | $ | 8,729,813 | $ | 1,954,614 | $ | 2,038,289 | $ | 2,097,605 | $ | 2,013,831 | $ | 8,104,339 | |||||||||||
NET EARNINGS | |||||||||||||||||||||||||||||||
Segment Earnings: | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 44,208 | $ | 51,789 | $ | 76,076 | $ | 65,626 | $ | 237,699 | $ | 46,556 | $ | 50,322 | $ | 63,706 | $ | 58,376 | $ | 218,960 | |||||||||||
Energy | 139,545 | 132,926 | 145,494 | 134,835 | 552,800 | 132,115 | 133,936 | 139,038 | 133,561 | 538,650 | |||||||||||||||||||||
Engineered Systems | 117,178 | 165,440 | 172,223 | 121,057 | 575,898 | 122,092 | 133,808 | 144,245 | 101,807 | 501,952 | |||||||||||||||||||||
Printing & Identification | 29,752 | 35,967 | 42,881 | 44,018 | 152,618 | 26,089 | 28,918 | 39,502 | 40,650 | 135,159 | |||||||||||||||||||||
Total Segments | 330,683 | 386,122 | 436,674 | 365,536 | 1,519,015 | 326,852 | 346,984 | 386,491 | 334,394 | 1,394,721 | |||||||||||||||||||||
Corporate expense / other | 33,763 | 38,341 | 43,278 | 45,479 | 160,861 | 36,546 | 36,335 | 32,001 | 31,127 | 136,009 | |||||||||||||||||||||
Net interest expense | 30,244 | 30,280 | 30,237 | 29,981 | 120,742 | 30,031 | 29,715 | 30,399 | 30,996 | 121,141 | |||||||||||||||||||||
Earnings from continuing operations before provision for income taxes | 266,676 | 317,501 | 363,159 | 290,076 | 1,237,412 | 260,275 | 280,934 | 324,091 | 272,271 | 1,137,571 | |||||||||||||||||||||
Provision for income taxes | 69,687 | 23,149 | 99,507 | 79,264 | 271,607 | 73,866 | 75,778 | 90,761 | 64,047 | 304,452 | |||||||||||||||||||||
Earnings from continuing operations | 196,989 | 294,352 | 263,652 | 210,812 | 965,805 | 186,409 | 205,156 | 233,330 | 208,224 | 833,119 | |||||||||||||||||||||
Earnings (loss) from discontinued operations, net | 13,014 | 35,697 | 5,462 | (16,849 | ) | 37,324 | 9,654 | 8,945 | 7,716 | (48,364 | ) | (22,049 | ) | ||||||||||||||||||
Net earnings | $ | 210,003 | $ | 330,049 | $ | 269,114 | $ | 193,963 | $ | 1,003,129 | $ | 196,063 | $ | 214,101 | $ | 241,046 | $ | 159,860 | $ | 811,070 | |||||||||||
SEGMENT OPERATING MARGIN | |||||||||||||||||||||||||||||||
Communication Technologies | 11.9 | % | 12.9 | % | 18.4 | % | 15.3 | % | 14.7 | % | 13.0 | % | 13.9 | % | 16.1 | % | 14.6 | % | 14.4 | % | |||||||||||
Energy | 24.9 | % | 23.2 | % | 25.2 | % | 23.1 | % | 24.1 | % | 24.9 | % | 24.9 | % | 24.7 | % | 24.7 | % | 24.8 | % | |||||||||||
Engineered Systems | 13.5 | % | 16.5 | % | 17.1 | % | 13.2 | % | 15.2 | % | 14.9 | % | 15.1 | % | 16.2 | % | 12.4 | % | 14.7 | % | |||||||||||
Printing & Identification | 12.5 | % | 14.3 | % | 16.7 | % | 15.9 | % | 14.9 | % | 10.7 | % | 11.5 | % | 16.0 | % | 16.0 | % | 13.6 | % | |||||||||||
Total Segment | 16.2 | % | 17.3 | % | 19.4 | % | 16.5 | % | 17.4 | % | 16.7 | % | 17.0 | % | 18.4 | % | 16.6 | % | 17.2 | % | |||||||||||
DEPRECIATION AND AMORTIZATION EXPENSE | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 35,501 | $ | 37,719 | $ | 38,251 | $ | 37,004 | $ | 148,475 | $ | 31,513 | $ | 32,828 | $ | 32,997 | $ | 35,281 | $ | 132,619 | |||||||||||
Energy | 26,298 | 26,599 | 26,549 | 27,898 | 107,344 | 21,184 | 23,533 | 24,639 | 25,721 | 95,077 | |||||||||||||||||||||
Engineered Systems | 31,551 | 32,282 | 32,961 | 34,360 | 131,154 | 19,582 | 23,913 | 23,060 | 27,066 | 93,621 | |||||||||||||||||||||
Printing & Identification | 7,630 | 7,606 | 7,701 | 7,845 | 30,782 | 8,331 | 8,496 | 8,777 | 7,998 | 33,602 | |||||||||||||||||||||
Corporate | 859 | 1,026 | 1,032 | 944 | 3,861 | 700 | 765 | 842 | 359 | 2,666 | |||||||||||||||||||||
$ | 101,839 | $ | 105,232 | $ | 106,494 | $ | 108,051 | $ | 421,616 | $ | 81,310 | $ | 89,535 | $ | 90,315 | $ | 96,425 | $ | 357,585 | ||||||||||||
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY 2013 | Q1 | Q2 | Q3 | Q4 | FY 2012 | ||||||||||||||||||||||
BOOKINGS | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 379,122 | $ | 422,293 | $ | 423,662 | $ | 372,901 | $ | 1,597,978 | $ | 347,291 | $ | 387,058 | $ | 411,005 | $ | 363,624 | $ | 1,508,978 | |||||||||||
Energy | 620,640 | 525,612 | 595,421 | 571,459 | 2,313,132 | 585,775 | 530,352 | 526,824 | 550,091 | 2,193,042 | |||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 223,764 | 213,359 | 222,402 | 248,079 | 907,604 | 184,711 | 204,139 | 197,767 | 209,872 | 796,489 | |||||||||||||||||||||
Refrigeration & Industrial | 755,026 | 784,904 | 662,464 | 701,928 | 2,904,322 | 711,911 | 666,223 | 600,065 | 606,931 | 2,585,130 | |||||||||||||||||||||
Eliminations | (373 | ) | (432 | ) | (372 | ) | (504 | ) | (1,681 | ) | (408 | ) | (376 | ) | (258 | ) | (399 | ) | (1,441 | ) | |||||||||||
978,417 | 997,831 | 884,494 | 949,503 | 3,810,245 | 896,214 | 869,986 | 797,574 | 816,404 | 3,380,178 | ||||||||||||||||||||||
Printing & Identification | 237,217 | 259,282 | 256,211 | 270,680 | 1,023,390 | 249,773 | 251,733 | 244,611 | 252,937 | 999,054 | |||||||||||||||||||||
Intra-segment eliminations | (720 | ) | (137 | ) | (109 | ) | (393 | ) | (1,359 | ) | (609 | ) | (221 | ) | (759 | ) | (1,020 | ) | (2,609 | ) | |||||||||||
Total consolidated bookings | $ | 2,214,676 | $ | 2,204,881 | $ | 2,159,679 | $ | 2,164,150 | $ | 8,743,386 | $ | 2,078,444 | $ | 2,038,908 | $ | 1,979,255 | $ | 1,982,036 | $ | 8,078,643 | |||||||||||
BACKLOG | |||||||||||||||||||||||||||||||
Communication Technologies | $ | 458,765 | $ | 480,426 | $ | 492,583 | $ | 436,437 | $ | 451,110 | $ | 476,745 | $ | 491,041 | $ | 453,172 | |||||||||||||||
Energy | 311,793 | 255,544 | 274,243 | 254,898 | 296,360 | 282,364 | 248,233 | 256,093 | |||||||||||||||||||||||
Engineered Systems | |||||||||||||||||||||||||||||||
Fluid Solutions | 178,854 | 184,142 | 182,557 | 255,871 | 191,327 | 172,300 | 156,191 | 160,890 | |||||||||||||||||||||||
Refrigeration & Industrial | 592,922 | 597,838 | 482,069 | 506,069 | 598,910 | 586,824 | 515,285 | 516,559 | |||||||||||||||||||||||
Eliminations | (178 | ) | (227 | ) | (113 | ) | (147 | ) | (132 | ) | (155 | ) | (94 | ) | (157 | ) | |||||||||||||||
771,598 | 781,753 | 664,513 | 761,793 | 790,105 | 758,969 | 671,382 | 677,292 | ||||||||||||||||||||||||
Printing & Identification | 95,353 | 103,864 | 105,699 | 100,032 | 102,117 | 98,216 | 98,356 | 97,857 | |||||||||||||||||||||||
Intra-segment eliminations | (886 | ) | (578 | ) | (423 | ) | (670 | ) | (986 | ) | (648 | ) | (324 | ) | (591 | ) | |||||||||||||||
Total consolidated backlog | $ | 1,636,623 | $ | 1,621,009 | $ | 1,536,615 | $ | 1,552,490 | $ | 1,638,706 | $ | 1,615,646 | $ | 1,508,688 | $ | 1,483,823 | |||||||||||||||
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY 2013 | Q1 | Q2 | Q3 | Q4 | FY 2012 | ||||||||||||||||||||||
Basic earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.14 | $ | 1.72 | $ | 1.55 | $ | 1.24 | $ | 5.64 | $ | 1.01 | $ | 1.12 | $ | 1.28 | $ | 1.17 | $ | 4.59 | |||||||||||
Discontinued operations | 0.08 | 0.21 | 0.03 | (0.10 | ) | 0.22 | 0.05 | 0.05 | 0.04 | (0.27 | ) | (0.12 | ) | ||||||||||||||||||
Net earnings | 1.21 | 1.93 | 1.58 | 1.14 | 5.86 | 1.07 | 1.17 | 1.33 | 0.90 | 4.47 | |||||||||||||||||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.12 | $ | 1.70 | $ | 1.53 | $ | 1.22 | $ | 5.57 | $ | 1.00 | $ | 1.10 | $ | 1.27 | $ | 1.16 | $ | 4.53 | |||||||||||
Discontinued operations | 0.07 | 0.21 | 0.03 | (0.10 | ) | 0.22 | 0.05 | 0.05 | 0.04 | (0.27 | ) | (0.12 | ) | ||||||||||||||||||
Net earnings | 1.20 | 1.91 | 1.56 | 1.13 | 5.78 | 1.05 | 1.15 | 1.31 | 0.89 | 4.41 | |||||||||||||||||||||
Adjusted diluted earnings per common share (calculated below): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 1.10 | $ | 1.36 | $ | 1.54 | $ | 1.28 | $ | 5.28 | $ | 1.01 | $ | 1.10 | $ | 1.25 | $ | 1.09 | $ | 4.44 | |||||||||||
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows: | |||||||||||||||||||||||||||||||
Net earnings (loss): | |||||||||||||||||||||||||||||||
Continuing operations | $ | 196,989 | $ | 294,352 | $ | 263,652 | $ | 210,812 | $ | 965,805 | $ | 186,409 | $ | 205,156 | $ | 233,330 | $ | 208,224 | $ | 833,119 | |||||||||||
Discontinued operations | 13,014 | 35,697 | 5,462 | (16,849 | ) | 37,324 | 9,654 | 8,945 | 7,716 | (48,364 | ) | (22,049 | ) | ||||||||||||||||||
Net earnings | 210,003 | 330,049 | 269,114 | 193,963 | 1,003,129 | 196,063 | 214,101 | 241,046 | 159,860 | 811,070 | |||||||||||||||||||||
Average shares outstanding: | |||||||||||||||||||||||||||||||
Basic | 173,448 | 171,111 | 170,544 | 170,027 | 171,271 | 183,737 | 183,494 | 181,763 | 177,257 | 181,551 | |||||||||||||||||||||
Diluted | 175,567 | 173,097 | 172,734 | 172,265 | 173,547 | 186,706 | 185,780 | 183,932 | 179,365 | 183,993 | |||||||||||||||||||||
Note: | |||||||||||||||||||||||||||||||
Earnings from continuing operations are adjusted by discrete tax items, incurred spin-off costs, and other one-time gains to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows: | |||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY 2013 | Q1 | Q2 | Q3 | Q4 | FY 2012 | ||||||||||||||||||||||
Adjusted earnings from continuing operations: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 196,989 | $ | 294,352 | $ | 263,652 | $ | 210,812 | $ | 965,805 | $ | 186,409 | $ | 205,156 | $ | 233,330 | $ | 208,224 | $ | 833,119 | |||||||||||
Gains (losses) from discrete and other tax items | 4,525 | 61,477 | 4,878 | 6,085 | 76,965 | (1,610 | ) | (372 | ) | 4,513 | 13,606 | 16,137 | |||||||||||||||||||
Knowles spin-off costs | — | (3,322 | ) | (10,637 | ) | (16,134 | ) | (30,093 | ) | — | — | — | — | — | |||||||||||||||||
Other one-time gains, net of tax | — | — | 2,866 | — | 2,866 | — | — | — | — | — | |||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 192,464 | $ | 236,197 | $ | 266,545 | $ | 220,861 | $ | 916,067 | $ | 188,019 | $ | 205,528 | $ | 228,817 | $ | 194,618 | $ | 816,982 | |||||||||||
Adjusted diluted earnings per common share: | |||||||||||||||||||||||||||||||
Earnings from continuing operations | $ | 1.12 | $ | 1.70 | $ | 1.53 | $ | 1.22 | $ | 5.57 | $ | 1.00 | $ | 1.10 | $ | 1.27 | $ | 1.16 | $ | 4.53 | |||||||||||
Gains (losses) from discrete and other tax items | 0.02 | 0.36 | 0.03 | 0.03 | 0.44 | (0.01 | ) | — | 0.02 | 0.07 | 0.09 | ||||||||||||||||||||
Knowles spin-off costs | — | (0.02 | ) | (0.06 | ) | (0.09 | ) | (0.17 | ) | — | — | — | — | — | |||||||||||||||||
Other one-time gains, net of tax | — | — | 0.02 | — | 0.02 | — | — | — | — | — | |||||||||||||||||||||
Adjusted earnings from continuing operations | $ | 1.10 | $ | 1.36 | $ | 1.54 | $ | 1.28 | $ | 5.28 | $ | 1.01 | $ | 1.10 | $ | 1.25 | $ | 1.09 | $ | 4.44 | |||||||||||
* Per share data may not add due to rounding. | |||||||||||||||||||||||||||||||
DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)(in thousands)
December 31, 2013 | December 31, 2012 | ||||||
Assets: | |||||||
Cash and cash equivalents | $ | 803,882 | $ | 800,076 | |||
Receivables, net of allowances | 1,359,101 | 1,225,898 | |||||
Inventories, net | 926,998 | 872,841 | |||||
Deferred tax and other current assets | 150,181 | 129,029 | |||||
Property, plant and equipment, net | 1,182,982 | 1,167,052 | |||||
Goodwill | 4,242,909 | 4,114,650 | |||||
Intangible assets, net | 1,612,487 | 1,625,420 | |||||
Other assets | 238,910 | 111,432 | |||||
Assets of discontinued operations | 244,279 | 397,545 | |||||
Total assets | $ | 10,761,729 | $ | 10,443,943 | |||
Liabilities and Stockholders' Equity: | |||||||
Notes payable and current maturities of long-term debt | $ | 229,278 | $ | 610,766 | |||
Payables and accrued expenses | 1,386,302 | 1,375,862 | |||||
Deferred taxes and other non-current liabilities | 1,063,369 | 1,139,777 | |||||
Long-term debt | 2,599,201 | 2,189,350 | |||||
Liabilities of discontinued operations | 106,183 | 208,958 | |||||
Stockholders' equity | 5,377,396 | 4,919,230 | |||||
Total liabilities and stockholders' equity | $ | 10,761,729 | $ | 10,443,943 | |||
DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)(in thousands)
Years Ended December 31, | |||||||
2013 | 2012 | ||||||
Operating activities: | |||||||
Net earnings | $ | 1,003,129 | $ | 811,070 | |||
Loss (gain) from discontinued operations, net | (37,324 | ) | 22,049 | ||||
Depreciation and amortization | 421,616 | 357,585 | |||||
Stock-based compensation | 30,480 | 30,884 | |||||
Contributions to employee benefit plans | (41,760 | ) | (48,576 | ) | |||
Net change in assets and liabilities | (197,456 | ) | 88,148 | ||||
Net cash provided by operating activities of continuing operations | 1,178,685 | 1,261,160 | |||||
Investing activities: | |||||||
Additions to property, plant and equipment | (236,833 | ) | (297,012 | ) | |||
Acquisitions (net of cash and cash equivalents acquired) | (322,838 | ) | (1,035,433 | ) | |||
Proceeds from the sale of businesses | 76,457 | — | |||||
Other | 20,163 | (13,443 | ) | ||||
Net cash used in investing activities of continuing operations | (463,051 | ) | (1,345,888 | ) | |||
Financing activities: | |||||||
Net increase in debt and notes payable | 19,530 | 603,918 | |||||
Purchase of common stock | (457,871 | ) | (748,955 | ) | |||
Proceeds from exercise of stock options and SARs, including tax benefits | 7,619 | 43,054 | |||||
Dividends to stockholders | (247,820 | ) | (240,959 | ) | |||
Net cash used in financing activities of continuing operations | (678,542 | ) | (342,942 | ) | |||
Net cash (used in) provided by discontinued operations | (29,985 | ) | 4,879 | ||||
Effect of exchange rate changes on cash | (3,301 | ) | 16,112 | ||||
Net (decrease) increase in cash and cash equivalents | 3,806 | (406,679 | ) | ||||
Cash and cash equivalents at beginning of period | 800,076 | 1,206,755 | |||||
Cash and cash equivalents at end of period | $ | 803,882 | $ | 800,076 | |||
DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)
2013 | 2012 | ||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | FY 2013 | Q1 | Q2 | Q3 | Q4 | FY 2012 | ||||||||||||||||||||||
Cash flow from operating activities (1) | $ | 78,326 | $ | 304,729 | $ | 340,005 | $ | 455,625 | $ | 1,178,685 | $ | 161,327 | $ | 243,363 | $ | 285,811 | $ | 570,659 | $ | 1,261,160 | |||||||||||
Less: Additions to property, plant and equipment | (47,153 | ) | (53,284 | ) | (57,038 | ) | (79,358 | ) | (236,833 | ) | (68,249 | ) | (72,758 | ) | (67,842 | ) | (88,163 | ) | (297,012 | ) | |||||||||||
Free cash flow | $ | 31,173 | $ | 251,445 | $ | 282,967 | $ | 376,267 | $ | 941,852 | $ | 93,078 | $ | 170,605 | $ | 217,969 | $ | 482,496 | $ | 964,148 | |||||||||||
Free cash flow as a percentage of earnings from continuing operations | 15.8 | % | 85.4 | % | 107.3 | % | 178.5 | % | 97.5 | % | 49.9 | % | 83.2 | % | 93.4 | % | 231.7 | % | 115.7 | % | |||||||||||
Free cash flow as a percentage of revenue | 1.5 | % | 11.3 | % | 12.6 | % | 17.0 | % | 10.8 | % | 4.8 | % | 8.4 | % | 10.4 | % | 24.0 | % | 11.9 | % | |||||||||||
(1) Includes one-time spin-off costs of $3,322, $10,637, and $16,134 for the second, third, and fourth quarters of 2013, respectively, and $30,093 for the full year.
ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2013
Acquisitions
During the fourth quarter of 2013, the Company completed four acquisitions, three in the Energy segment and one in the Engineered Systems segment. For the full year 2013, Dover made a total of ten acquisitions for consideration totaling $323 million.
Discontinued Operations
In the fourth quarter of 2013, the Company completed the sale of Everett Charles Technologies ("ECT"), resulting in an after-tax loss of $0.02 diluted earnings per share ("EPS"). The fourth quarter net loss from discontinued operations was $0.10 EPS, which includes income from the operations of DEK and ECT prior to sale, as well as adjustments to other discontinued assets and liabilities, including an $0.11 EPS impact related to tax obligations in foreign jurisdictions. In addition, the Company recorded an impairment charge of $0.08 EPS for DEK in connection with the planned divestiture of this business in 2014.
On a full-year basis, the Company generated net earnings of $0.22 EPS, which includes the $0.02 EPS loss on sale of ECT, as well as total impairment charges of $0.19 EPS connected with the anticipated sale of our electronic test and assembly businesses and net discrete tax benefits of $0.21 EPS.
Tax Rate
The effective tax rate on continuing operations was 27.3% and 23.5% for the fourth quarters of 2013 and 2012, respectively. On a full year basis, the effective tax rates on continuing operations for 2013 and 2012 were 21.9% and 26.8%, respectively. The 2013 and 2012 rates were favorably impacted by discrete and other items, as shown in the reconciliation for quarterly earnings per share included herein. After adjusting for discrete and other items, the fourth quarter effective tax rates were 29.4% and 28.5% for 2013 and 2012, respectively, and the full year rates were 28.2% for both 2013 and 2012. The higher rates for the quarter reflect the impact of a higher proportion of U.S. earnings, partly offset by lower effective tax rates in foreign jurisdictions.
Revenue Growth Factors
2013 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | ||||||||||
Organic | (1 | )% | 5 | % | 3 | % | 5 | % | 3 | % | ||||
Acquisitions | 6 | % | 4 | % | 4 | % | 5 | % | 5 | % | ||||
Currency translation | (1 | )% | — | % | — | % | — | % | — | % | ||||
4 | % | 9 | % | 7 | % | 10 | % | 8 | % | |||||
Free Cash Flow
The following table is a reconciliation of free cash flow (a non-GAAP measure) from cash flow provided by operating activities:
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Free Cash Flow (dollars in thousands) | |||||||||||||||
Cash flow provided by operating activities | $ | 455,625 | $ | 570,659 | $ | 1,178,685 | $ | 1,261,160 | |||||||
Less: Capital expenditures | (79,358 | ) | (88,163 | ) | (236,833 | ) | (297,012 | ) | |||||||
Free cash flow | $ | 376,267 | $ | 482,496 | $ | 941,852 | $ | 964,148 | |||||||
Free cash flow as a percentage of revenue | 17.0 | % | 24.0 | % | 10.8 | % | 11.9 | % | |||||||
Free cash flow as a percentage of earnings from continuing operations | 97.5 | % | 115.7 | % | |||||||||||
The full year decrease in 2013 free cash flow reflects a higher investment in working capital year over year, offset by higher earnings from continuing operations before depreciation and amortization and lower capital expenditures.
Share Repurchases
During the year ended December 31, 2013, the Company purchased approximately 6.0 million shares of its common stock in the open market at an average price of $76.17 per share. These repurchases were made pursuant to the share repurchase program approved in November 2012, which authorized $1 billion for share repurchases over the next 12 to 18 months. At December 31, 2013, approximately $293 million remains available for repurchases under this program.
Capitalization
The following table provides a summary reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:
Net Debt to Net Capitalization Ratio (in thousands) | December 31, 2013 | December 31, 2012 | ||||||
Current maturities of long-term debt | $ | 2,778 | $ | 3,266 | ||||
Commercial paper | 226,500 | 607,500 | ||||||
Long-term debt | 2,599,201 | 2,189,350 | ||||||
Total debt | 2,828,479 | 2,800,116 | ||||||
Less: Cash and cash equivalents | (803,882 | ) | (800,076 | ) | ||||
Net debt | 2,024,597 | 2,000,040 | ||||||
Add: Stockholders' equity | 5,377,396 | 4,919,230 | ||||||
Net capitalization | $ | 7,401,993 | $ | 6,919,270 | ||||
Net debt to net capitalization | 27.4 | % | 28.9 | % | ||||
Non-GAAP Information:
These Investor Supplement tables contain non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share, as management believes this information is useful to investors to better understand the company’s ongoing profitability and facilitates easier comparisons of the company’s profitability to prior and future periods and to its peers. The company has also disclosed herein a number of non-GAAP measures related to free cash flow and the ratio of net debt to net capitalization. Management believes these metrics are important measures of the company's operating performance and liquidity. Free cash flow information provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase common stock, while the net debt to net capitalization ratio is helpful in evaluating the company's capital structure and the amount of leverage employed.
Pro Forma Information:
The Investor Supplement tables contain pro forma financial information that reflects the operations of Knowles as a discontinued operation. Upon completion of the spin, Knowles' results will be reclassified to discontinued operations for reporting purposes in accordance with GAAP. The unaudited pro forma consolidated financial statements are presented for informational purposes only and are subject to a number of estimates, assumptions and uncertainties and does not purport to represent what our results of operations would have been if the spin-off of Knowles Corporation had occurred as of the dates indicated, what such results will be for any future periods, or what the historical results of Dover will be upon classifying Knowles as a discontinued operation as of the effective date of the spin-off of Knowles.
DOVER CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
(unaudited)(in thousands, except per share data)
Year Ended December 31, 2013 | Year Ended December 31, 2012 | ||||||||||||||
As Reported | Pro forma | As Reported | Pro forma | ||||||||||||
Revenue | $ | 8,729,813 | $ | 7,520,635 | $ | 8,104,339 | $ | 6,994,480 | |||||||
Cost of goods and services | 5,390,032 | 4,612,769 | 4,997,274 | 4,291,602 | |||||||||||
Gross profit | 3,339,781 | 2,907,866 | 3,107,065 | 2,702,878 | |||||||||||
Selling and administrative expenses | 1,985,849 | 1,692,444 | 1,841,688 | 1,590,217 | |||||||||||
Operating earnings | 1,353,932 | 1,215,422 | 1,265,377 | 1,112,661 | |||||||||||
Interest expense, net | 120,742 | 120,672 | 121,141 | 121,263 | |||||||||||
Other (income) expense, net | (4,222 | ) | (4,458 | ) | 6,665 | 7,127 | |||||||||
Earnings before provision for income taxes and discontinued operations | 1,237,412 | 1,099,208 | 1,137,571 | 984,271 | |||||||||||
Provision for income taxes | 271,607 | 267,635 | 304,452 | 298,339 | |||||||||||
Earnings from continuing operations | 965,805 | 831,573 | 833,119 | 685,932 | |||||||||||
Earnings (loss) from discontinued operations, net (1) | 37,324 | 171,556 | (22,049 | ) | 125,138 | ||||||||||
Net earnings | $ | 1,003,129 | $ | 1,003,129 | $ | 811,070 | $ | 811,070 | |||||||
Basic earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 5.64 | $ | 4.86 | $ | 4.59 | $ | 3.78 | |||||||
Earnings (loss) from discontinued operations, net (1) | 0.22 | 1.00 | (0.12 | ) | 0.69 | ||||||||||
Net earnings | 5.86 | 5.86 | 4.47 | 4.47 | |||||||||||
Weighted average shares outstanding | 171,271 | 171,271 | 181,551 | 181,551 | |||||||||||
Diluted earnings per common share: | |||||||||||||||
Earnings from continuing operations | $ | 5.57 | $ | 4.79 | $ | 4.53 | $ | 3.73 | |||||||
Earnings (loss) from discontinued operations, net (1) | 0.22 | 0.99 | (0.12 | ) | 0.68 | ||||||||||
Net earnings | 5.78 | 5.78 | 4.41 | 4.41 | |||||||||||
Weighted average shares outstanding | 173,547 | 173,547 | 183,993 | 183,993 | |||||||||||
Adjusted diluted earnings per share from continuing operations (2) | $ | 5.28 | $ | 4.31 | $ | 4.44 | $ | 3.64 | |||||||
(1) Reflects the impact of discontinuing Knowles upon spin-off, which results in a reclassification of $134.2 million, inclusive of $30 million of spin-off costs, or $0.78 diluted EPS in 2013 and $147.2 million or $0.80 diluted EPS in 2012 to earnings from discontinued operations.
(2) Adjusted for gains from discrete and other tax items of $0.46 and $0.09 in 2013 and 2012, respectively, and other one-time gains, net of tax, of $0.02 in 2013.
Fourth Quarter 2013 Earnings Conference Call January 30, 2014 - 9:00am CT
Forward Looking Statements and Pro Forma Information We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties. We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements. This presentation contains pro forma financial information that reflects the operations of Knowles as a discontinued operation. Upon completion of the spin, Knowles' results will be reclassified to discontinued operations for reporting purposes in accordance with GAAP. The unaudited pro forma consolidated financial information is presented for informational purposes only and is subject to a number of estimates, assumptions and uncertainties and does not purport to represent what our results of operations would have been if the spin-off of Knowles Corporation had occurred as of the dates indicated, what such results will be for any future periods, or what the historical results of Dover will be upon classifying Knowles as a discontinued operation as of the effective date of the spin-off of Knowles. We would also direct your attention to our internet site, www.dovercorporation.com, where considerably more information can be found. 2
$0.80 $1.00 $1.20 $1.40 $1.60 Q1* Q2 Q3* Q4* Q1* Q2* Q3* Q4* Q4 2013 Performance Adjusted Continuing Earnings Per Share* • Broad-based organic revenue growth, with strong results in the refrigeration, food equipment, fast moving consumer goods, fluids, drilling, downstream and consumer electronics markets • North America markets were solid; Europe markets grew over 10%; China remained strong • Segment margin of 16.5% in-line with last year, led by 23.1% in Energy •Bookings growth of 9% is broad-based, with growth in all segments • Overall book-to-bill of 0.98 Q4 Q4/Q4 * Excludes discrete & other tax benefits of -$0.01 in Q1 2012, $0.02 in Q3 2012, $0.07 in Q4 2012, $0.02 in Q1 2013 , $0.36 in Q2 2013, $0.03 in Q3 2013 and $0.03 in Q4 2013; includes spin off costs of $0.02 in Q2 2013, $0.06 in Q3 2013, and $0.09 in Q4 2013: includes other one-time gains of $0.02 in Q3 2013 (a) See Press Release filed under Form 8-K for free cash flow reconciliation 3 Quarterly Comments 2012 FY $4.44 2013 Revenue $2.2B 10% $8.7B 8% EPS (cont.) $1.22 5% $5.57 23% Bookings $2.2B 9% $8.7B 8% Seg. Margins 16.5% -10 bps 17.4% 20 bps Organic Rev. 5% 3% Acq. Growth 5% 5% FCF (a) $376M -22% $942M -2% FY FY/FY FY $5.28
4 Revenue Q4 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 7% 4% 3% 8% 5% Acquisitions - 5% 8% 1% 5% Currency - -1% 1% - - Total 7% 8% 12% 9% 10% FY 2013 Communication Technologies Energy Engineered Systems Printing & Identification Total Dover Organic 6% 3% 1% 2% 3% Acquisitions - 4% 9% - 5% Currency <1% -1% 1% - - Total 7% 6% 11% 2% 8%
$778 $677 $257 $277 $414 $428 $577 $584 $227 $244 $0 $350 $700 $1,050 DCT Q3 DCT Q4 DE Q3 DE Q4 DES Q3 DES Q4 DPI Q3 DPI Q4 $662 $702 $256 $271 $424 $373 $595 $571 $222 $248 $0 $350 $700 $1,050 DCT Q3 DCT Q4 DE Q3 DE Q4 DES Q3 DES Q4 DPI Q3 DPI Q4 Sequential Results – Q3 13 → Q4 13 Fluid Solutions ↑ 4% ↑ 1% Refrigeration & Industrial ↓ 12% ↓ 4% ↑ 7% ↑ 6% $ in millions 5 Bookings ↓8% ↑ 8% Revenue
6 Communication Technologies • Strong growth in Consumer Electronics led by roll-out of OEM smartphone launch, despite declining volumes at other OEMs • Telecom/Other markets continue to improve; Solid hearing health markets in Medical Technology offset by soft specialty acoustic markets; Aerospace/Defense impacted by weak military activity • Margin driven by volume conversion, productivity, and the benefits of prior restructuring, offset by asset impairments of $4 million • Book-to-bill at seasonal 0.87 $ in millions Q4 2013 Q4 2012 % Change Revenue $428 $401 7% Earnings $ 66 $ 58 12% Margin 15.3% 14.6% 70 bps Bookings $373 $364 3% Quarterly Comments Revenue by End-Market % of Q4 Revenue Y / Y Growth Consumer Electronics 52% 15% Medical Technology 15% -6% Aerospace / Defense 24% -2% Telecom / Other 9% 14%
7 Energy • Strong drilling and downstream growth • International markets remain robust in production, offsetting weak winch markets and softer U.S. sucker rod markets • Margin in-line with expectations, costs associated with recent acquisitions had 150 basis point impact • Bookings growth is particularly strong in the drilling and downstream end-markets • Book-to-bill at 0.98 $ in millions Quarterly Comments Q4 2013 Q4 2012 % Change Revenue $584 $540 8% Earnings $135 $134 1% Margin 23.1% 24.7% -160 bps Bookings $571 $550 4% Revenue by End-Market % of Q4 Revenue Y / Y Growth Drilling 18% 13% Production 52% 1% Downstream 30% 20%
8 Engineered Systems • Revenue driven by recent acquisitions and strong results in refrigeration & food equipment, fluids and the auto-aftermarket • Within refrigeration, regional activity improves • Strong plastics and petro- chemical markets aiding Fluids • Margin performance reflects continued strong execution • Bookings growth reflects acquisitions and strong fluids and auto-aftermarket activity • Book-to-bill at 1.03 $ in millions Quarterly Comments Q4 2013 Q4 2012 % Change Revenue $920 $819 12% Earnings $ 121 $102 19% Margin 13.2% 12.4% 80 bps Bookings $950 $816 16% Revenue by End-Market % of Q4 Revenue Y / Y Growth Fluids 27% 18% Refrigeration & Food Equipment 40% 18% Industrial 33% 3%
Printing & Identification • Broad-based growth in both fast moving consumer goods and industrial end-markets • Strong growth in Europe, across all product categories. • Project-related shipments increase. • Operating margin impacted by costs associated with completion of restructuring plan and deal costs • Bookings growth is broad-based • Book-to-bill at 0.98 $ in millions Quarterly Comments Q4 2013 Q4 2012 % Change Revenue $277 $254 9% Earnings $ 44 $ 41 8% Margin 15.9% 16.0% -10 bps Bookings $271 $253 7% 9 Revenue by End-Market % of Q4 Revenue Y / Y Growth Fast Moving Consumer Goods 61% 10% Industrial 39% 7%
Q4 2013 Overview Q4 2013 Net Interest Expense $30 million, down $1 million from last year and in- line with expectations Corporate Expense $45 million, up $14 million from last year, reflecting Q4 spin off costs of $16 million. Effective Tax Rate (ETR) Q4 normalized rate was 29.4%, excluding $0.03 cents of discrete tax benefits, reflecting a slightly unfavorable mix of geographic earnings(a) Capex $79 million, slightly below expectations Share Repurchases Repurchased 551K shares ($50M) in quarter under the $1 billion program. Completed 71% of $1 billion program by year-end. 10 (a) See press release filed under form 8-K for reconciliation
Selected Pro Forma Financials for Dover (Un-audited) 11 Revenue $ 6,994 $ 7,521 Operating Earnings (a) 1,113 1,215 Net Interest 121 121 Income Taxes 298 268 Earnings from Con’t Ops. $ 686 $ 832 Diluted Continuing EPS $ 3.73 $ 4.79 Adjusted Diluted Continuing EP S(b) $ 3.64 $ 4.31 Organic revenue growth 5% - 4% 2% Acquisition revenue growth 4% 6% 5% 6% Total revenue growth 9% 6% 9% 8% 2012 2013 For full year ended December 31, (b): Excludes discrete tax benefits of $0.09 EPS in 2012; discrete tax benefits of $0.46, other one-time gains of $0.02 in 2013 Note: Refer to slide 2 for pro forma disclosure. (a): Includes corporate expense of $135M in 2012 and $130M in 2013 1H FY 2H FY 18% Growth
FY 2014 Guidance – Pro Forma Revenue: • Organic revenue : ≈ 3% - 4% • Completed Acquisitions: ≈ 2% • Total revenue: ≈ 5% - 6% Corporate expense: ≈ $123 million* Interest expense: ≈ $133 million Full-Year Tax Rate: ≈ 31.0% Capital expenditures: ≈ 2.5% of revenue FCF for full year: ≈ 11% of revenue 12 Note: Refer to slide 2 for pro forma disclosure. * Excludes remaining costs to complete spin-off of Knowles
2013 Pro Forma EPS – Continuing Ops (post-spin basis) $4.79 • Less 2013 tax benefits (1): ($0.46) • Less 2013 one-time items (2): ($0.02) 2013 Pro Forma Adjusted EPS – Continuing Ops (post-spin) $4.31 • Volume, mix, price (inc. FX): $0.21 - $0.33 • Net benefits of productivity: $0.16 - $0.21 • Acquisitions: $0.06 - $0.07 • Investment / Compensation: ($0.15 - $0.20) • Corporate expenses: $0.03 - $0.04 • Interest / Shares / Tax Rate (net): ($0.02) - $0.04 2014 Pro Forma EPS – Continuing Ops $4.60 - $4.80 2014 EPS Guidance Bridge - Cont. Ops (Pro Forma) (1) $0.02 in Q1 2013, $0.38 in Q2 2013, $0.03 in Q3 2013, and $0.03 in Q4 2013 13 (2) $0.02 in Q3 2013 Note: Refer to slide 2 for pro forma disclosure. 9% Growth at mid-point
Appendix – Reconciliations 14 EPS – Continuing Ops $1.22 $5.57 • Discrete tax items: ($0.03) ($0.44) • Knowles spin-off costs: $0.09 $0.17 • Other one-time gains: - ($0.02) Adjusted EPS – Continuing Ops $1.28 $5.28 Q4 2013 FY 2013 ADJUSTED EPS FROM CONTINUING OPERATIONS Note: Per share data may not add due to rounding