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): July 20, 2021
_______________________________
(Exact name of registrant as specified in its charter)
______________________________________________
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(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 (see General Instruction A.2. below):
| 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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On July 20, 2021, Dover Corporation ("Dover") issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the quarter ended June 30, 2021.
The information in this Current Report on Form 8-K, including Exhibit 99.1 and 99.2, 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, as amended.
Item 7.01 Regulation FD Disclosure.
As previously announced, on July 20, 2021 , Dover will hold an investor conference call and webcast at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss its results of operations for the quarter ended June 30, 2021. A copy of the supplemental presentation materials that will be used during the conference call is furnished as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are furnished as part of this report:
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).
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: | July 20, 2021 | DOVER CORPORATION | ||||||||||||
| (Registrant) | ||||||||||||||
| By: | /s/ Ivonne M. Cabrera | |||||||||||||
| Ivonne M. Cabrera | ||||||||||||||
| Senior Vice President, General Counsel & Secretary | ||||||||||||||
Exhibit 99.1
| Investor Contact: | Media Contact: | |||||||
| Andrey Galiuk | Adrian Sakowicz | |||||||
| Vice President - Corporate Development | Vice President - Communications | |||||||
| and Investor Relations | (630) 743-5039 | |||||||
| (630) 743-5131 | asakowicz@dovercorp.com | |||||||
| agaliuk@dovercorp.com | ||||||||
DOVER REPORTS SECOND QUARTER 2021 RESULTS; RAISES FULL YEAR GUIDANCE
DOWNERS GROVE, Ill., July 20, 2021 — Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the second quarter ended June 30, 2021.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
| ($ in millions, except per share data) | 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||||||||||||||||||
| U.S. GAAP | ||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 2,032 | $ | 1,499 | 36 | % | $ | 3,900 | $ | 3,155 | 24 | % | ||||||||||||||||||||||||||
Net earnings 1 | 265 | 125 | 112 | % | 497 | 301 | 65 | % | ||||||||||||||||||||||||||||||
Diluted EPS | 1.82 | 0.86 | 112 | % | 3.43 | 2.07 | 66 | % | ||||||||||||||||||||||||||||||
| Non-GAAP | ||||||||||||||||||||||||||||||||||||||
| Organic revenue change | 30 | % | 19 | % | ||||||||||||||||||||||||||||||||||
Adjusted net earnings 2 | 299 | 164 | 82 | % | 562 | 368 | 53 | % | ||||||||||||||||||||||||||||||
| Adjusted diluted EPS | 2.06 | 1.13 | 82 | % | 3.87 | 2.53 | 53 | % | ||||||||||||||||||||||||||||||
1 Q2 2021 and 2020 net earnings include rightsizing and other costs of $8.2 million and $13.4 million, respectively. Q2 2020 also includes a $0.6 million expense related to the sale of AMS Chino. Year-to-date 2021 and 2020 net earnings include rightsizing and other costs of $11.3 million and $19.6 million, respectively. Year-to-date 2020 also includes a $4.4 million non-cash gain on the sale of AMS Chino.
2 Q2 2021 and 2020 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.6 million and $25.7 million, respectively, and rightsizing and other costs of $8.2 million and $13.4 million, respectively. Q2 2020 also excludes a $0.6 million expense related to the sale of AMS Chino. Year-to-date 2021 and 2020 adjusted net earnings exclude acquisition-related amortization costs of $53.4 million and $51.3 million, respectively, and rightsizing and other costs of $11.3 million and $19.6 million, respectively. Year-to-date 2020 also excludes a $4.4 million non-cash gain on the sale of AMS Chino.
For the quarter ended June 30, 2021, Dover generated revenue of $2.0 billion, an increase of 36% (+30% organic) compared to the second quarter of the prior year. GAAP net earnings of $265 million increased 112%, and GAAP diluted EPS of $1.82 was also up 112%. On an adjusted basis, net earnings of $299 million increased 82% and adjusted diluted EPS of $2.06 was also up 82% versus the comparable quarter of the prior year.
For the six months ended June 30, 2021, Dover generated revenue of $3.9 billion, an increase of 24% (+19% organic) compared to the first six months of the prior year. GAAP net earnings of $497 million increased by 65%, and GAAP diluted EPS of $3.43 was up 66% year-over-year. On an adjusted basis, net earnings of $562 million increased 53%, and adjusted diluted EPS of $3.87 was also up 53% versus the comparable period of the prior year.
A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.
MANAGEMENT COMMENTARY:
Dover’s President and Chief Executive Officer, Richard J. Tobin, said, “We performed well again this quarter as new order activity remained strong and margin improvement continued its solid trajectory across all segments. Our portfolio is performing above pre-pandemic levels in terms of revenue and margin, and our record-high backlog provides visibility into the second half of the year, and in some of our businesses into 2022.
“During the quarter we saw top-line growth across all of our segments, with the largest contributions to the year-over-year increase from pumps and process solutions, fueling solutions, food retail, marking & coding and automotive aftermarket
businesses. We are encouraged by the demand growth in compressor components, foodservice, and textile printing, and we expect continued recovery in these markets over the balance of the year.
“Our teams have done a commendable job in the first half navigating logistics bottlenecks, component and labor shortages, and cost inflation to meet end market demand and drive solid margin conversion. Our forecast for the balance of the year reflects the expectation that logistics constraints and input cost inflation will neither deteriorate nor improve materially. Despite this dynamic, we believe that our localized manufacturing and sourcing strategy and diverse business mix give us distinct advantages to win in the current demand environment.
“We also have continued to invest organically in capacity expansions in our high-growth businesses and productivity improvements across our portfolio. Our center-led initiatives are continuing to drive cost synergies across our portfolio companies allowing them to concentrate on winning in the marketplace and driving growth. Acquisition activity remains robust and we recently acquired three attractive bolt-on businesses in single-use pumps, brand protection software and IoT dispensing solutions.
“As we look toward the second half of the year, our robust backlog levels and sustained strong bookings pace give us confidence in our durable top-line trajectory. We also remain confident in our ability to execute operationally to drive portfolio profitability. As a result, we are raising our full year revenue and EPS guidance.”
FULL YEAR 2021 GUIDANCE UPDATE:
Guidance for full year 2021 revenue growth was raised to 15% to 17%. EPS guidance for full year 2021 was raised to $6.45 to $6.55 ($7.30 to $7.40 on an adjusted basis).
CONFERENCE CALL INFORMATION:
Dover will host a webcast and conference call to discuss its second quarter and year-to-date 2021 results as well as updated 2021 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Tuesday, July 20, 2021. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover’s second quarter results and its operating segments can be found on the Company’s website.
ABOUT DOVER:
Dover is a diversified global manufacturer and solutions provider with annual revenue of over $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 24,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.
FORWARD-LOOKING STATEMENTS:
This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, “forward-looking” statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2020, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
INVESTOR SUPPLEMENT - SECOND QUARTER 2021
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenue | $ | 2,031,676 | $ | 1,499,175 | $ | 3,899,577 | $ | 3,155,114 | |||||||||||||||
| Cost of goods and services | 1,259,504 | 947,577 | 2,405,857 | 1,991,273 | |||||||||||||||||||
| Gross profit | 772,172 | 551,598 | 1,493,720 | 1,163,841 | |||||||||||||||||||
| Selling, general, and administrative expenses | 428,042 | 366,740 | 837,040 | 753,681 | |||||||||||||||||||
| Operating earnings | 344,130 | 184,858 | 656,680 | 410,160 | |||||||||||||||||||
| Interest expense | 26,661 | 28,711 | 53,484 | 55,979 | |||||||||||||||||||
| Interest income | (942) | (728) | (1,622) | (1,911) | |||||||||||||||||||
| Gain on sale of a business | — | 781 | — | (5,770) | |||||||||||||||||||
| Other income, net | (4,933) | (735) | (7,776) | (8,467) | |||||||||||||||||||
| Earnings before provision for income taxes | 323,344 | 156,829 | 612,594 | 370,329 | |||||||||||||||||||
| Provision for income taxes | 58,836 | 32,063 | 115,317 | 69,284 | |||||||||||||||||||
| Net earnings | $ | 264,508 | $ | 124,766 | $ | 497,277 | $ | 301,045 | |||||||||||||||
| Net earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.84 | $ | 0.87 | $ | 3.46 | $ | 2.09 | |||||||||||||||
| Diluted | $ | 1.82 | $ | 0.86 | $ | 3.43 | $ | 2.07 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 143,941 | 143,955 | 143,854 | 144,107 | |||||||||||||||||||
| Diluted | 145,118 | 144,995 | 145,040 | 145,359 | |||||||||||||||||||
| Dividends paid per common share | $ | 0.495 | $ | 0.49 | $ | 0.99 | $ | 0.98 | |||||||||||||||
| * Per share data may be impacted by rounding. | |||||||||||||||||||||||
IS - 1
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| REVENUE | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 428,127 | $ | 442,091 | $ | 870,218 | $ | 408,160 | $ | 342,380 | $ | 750,540 | $ | 386,562 | $ | 394,175 | $ | 1,531,277 | ||||||||||||||
| Fueling Solutions | 389,678 | 437,042 | 826,720 | 359,982 | 326,495 | 686,477 | 380,511 | 409,294 | 1,476,282 | |||||||||||||||||||||||
| Imaging & Identification | 284,328 | 294,076 | 578,404 | 256,765 | 227,977 | 484,742 | 265,690 | 287,746 | 1,038,178 | |||||||||||||||||||||||
| Pumps & Process Solutions | 394,377 | 428,701 | 823,078 | 319,536 | 309,095 | 628,631 | 347,875 | 347,497 | 1,324,003 | |||||||||||||||||||||||
| Refrigeration & Food Equipment | 372,077 | 430,506 | 802,583 | 311,913 | 293,527 | 605,440 | 368,395 | 342,255 | 1,316,090 | |||||||||||||||||||||||
| Intra-segment eliminations | (686) | (740) | (1,426) | (417) | (299) | (716) | (777) | (577) | (2,070) | |||||||||||||||||||||||
| Total consolidated revenue | $ | 1,867,901 | $ | 2,031,676 | $ | 3,899,577 | $ | 1,655,939 | $ | 1,499,175 | $ | 3,155,114 | $ | 1,748,256 | $ | 1,780,390 | $ | 6,683,760 | ||||||||||||||
| NET EARNINGS | ||||||||||||||||||||||||||||||||
| Segment Earnings: | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 68,779 | $ | 62,720 | $ | 131,499 | $ | 69,094 | $ | 47,702 | $ | 116,796 | $ | 64,890 | $ | 56,481 | $ | 238,167 | ||||||||||||||
| Fueling Solutions | 66,480 | 78,755 | 145,235 | 53,498 | 47,214 | 100,712 | 66,601 | 69,661 | 236,974 | |||||||||||||||||||||||
| Imaging & Identification | 56,992 | 60,747 | 117,739 | 51,482 | 38,046 | 89,528 | 51,928 | 52,017 | 193,473 | |||||||||||||||||||||||
| Pumps & Process Solutions | 123,645 | 138,632 | 262,277 | 66,079 | 67,702 | 133,781 | 89,786 | 81,709 | 305,276 | |||||||||||||||||||||||
Refrigeration & Food Equipment 1 | 38,117 | 48,971 | 87,088 | 23,529 | 11,459 | 34,988 | 40,159 | 27,725 | 102,872 | |||||||||||||||||||||||
| Total segment earnings (EBIT) | 354,013 | 389,825 | 743,838 | 263,682 | 212,123 | 475,805 | 313,364 | 287,593 | 1,076,762 | |||||||||||||||||||||||
| Corporate expense / other | 38,620 | 40,762 | 79,382 | 24,097 | 27,311 | 51,408 | 35,603 | 39,651 | 126,662 | |||||||||||||||||||||||
| Interest expense | 26,823 | 26,661 | 53,484 | 27,268 | 28,711 | 55,979 | 27,724 | 28,234 | 111,937 | |||||||||||||||||||||||
| Interest income | (680) | (942) | (1,622) | (1,183) | (728) | (1,911) | (960) | (700) | (3,571) | |||||||||||||||||||||||
| Earnings before provision for income taxes | 289,250 | 323,344 | 612,594 | 213,500 | 156,829 | 370,329 | 250,997 | 220,408 | 841,734 | |||||||||||||||||||||||
| Provision for income taxes | 56,481 | 58,836 | 115,317 | 37,221 | 32,063 | 69,284 | 50,697 | 38,302 | 158,283 | |||||||||||||||||||||||
| Net earnings | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 176,279 | $ | 124,766 | $ | 301,045 | $ | 200,300 | $ | 182,106 | $ | 683,451 | ||||||||||||||
| SEGMENT MARGIN | ||||||||||||||||||||||||||||||||
| Engineered Products | 16.1 % | 14.2 % | 15.1 % | 16.9 % | 13.9 % | 15.6 % | 16.8 % | 14.3 % | 15.6 % | |||||||||||||||||||||||
| Fueling Solutions | 17.1 % | 18.0 % | 17.6 % | 14.9 % | 14.5 % | 14.7 % | 17.5 % | 17.0 % | 16.1 % | |||||||||||||||||||||||
| Imaging & Identification | 20.0 % | 20.7 % | 20.4 % | 20.1 % | 16.7 % | 18.5 % | 19.5 % | 18.1 % | 18.6 % | |||||||||||||||||||||||
| Pumps & Process Solutions | 31.4 % | 32.3 % | 31.9 % | 20.7 % | 21.9 % | 21.3 % | 25.8 % | 23.5 % | 23.1 % | |||||||||||||||||||||||
Refrigeration & Food Equipment 1 | 10.2 % | 11.4 % | 10.9 % | 7.5 % | 3.9 % | 5.8 % | 10.9 % | 8.1 % | 7.8 % | |||||||||||||||||||||||
| Total segment operating margin | 19.0 % | 19.2 % | 19.1 % | 15.9 % | 14.1 % | 15.1 % | 17.9 % | 16.2 % | 16.1 % | |||||||||||||||||||||||
| DEPRECIATION AND AMORTIZATION EXPENSE | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 14,047 | $ | 11,981 | $ | 26,028 | $ | 10,122 | $ | 9,722 | $ | 19,844 | $ | 10,717 | $ | 12,042 | $ | 42,603 | ||||||||||||||
| Fueling Solutions | 19,269 | 19,475 | 38,744 | 18,339 | 17,968 | 36,307 | 18,014 | 18,482 | 72,803 | |||||||||||||||||||||||
| Imaging & Identification | 9,593 | 9,294 | 18,887 | 8,769 | 9,224 | 17,993 | 9,809 | 10,576 | 38,378 | |||||||||||||||||||||||
| Pumps & Process Solutions | 16,926 | 16,866 | 33,792 | 18,336 | 17,572 | 35,908 | 17,206 | 19,077 | 72,191 | |||||||||||||||||||||||
| Refrigeration & Food Equipment | 12,096 | 12,077 | 24,173 | 11,548 | 11,421 | 22,969 | 12,081 | 11,491 | 46,541 | |||||||||||||||||||||||
| Corporate | 1,875 | 1,826 | 3,701 | 1,638 | 1,696 | 3,334 | 1,662 | 1,539 | 6,535 | |||||||||||||||||||||||
| Total depreciation and amortization expense | $ | 73,806 | $ | 71,519 | $ | 145,325 | $ | 68,752 | $ | 67,603 | $ | 136,355 | $ | 69,489 | $ | 73,207 | $ | 279,051 | ||||||||||||||
1 Q1, Q2, Q3, and FY 2020 include a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain, respectively, on the sale of the Chino, California branch of The AMS Group ("AMS Chino"). Q2 and FY 2020 also include a $3,640 write-off of assets. | ||||||||||||||||||||||||||||||||
IS - 2
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
| Earnings Per Share | ||||||||||||||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| Net earnings per share: | ||||||||||||||||||||||||||||||||
| Basic | $ | 1.62 | $ | 1.84 | $ | 3.46 | $ | 1.22 | $ | 0.87 | $ | 2.09 | $ | 1.39 | $ | 1.27 | $ | 4.74 | ||||||||||||||
| Diluted | $ | 1.61 | $ | 1.82 | $ | 3.43 | $ | 1.21 | $ | 0.86 | $ | 2.07 | $ | 1.38 | $ | 1.25 | $ | 4.70 | ||||||||||||||
| Net earnings and weighted average shares used in calculated earnings per share amounts are as follows: | ||||||||||||||||||||||||||||||||
| Net earnings | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 176,279 | $ | 124,766 | $ | 301,045 | $ | 200,300 | $ | 182,106 | $ | 683,451 | ||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | 143,765 | 143,941 | 143,854 | 144,259 | 143,955 | 144,107 | 144,032 | 143,954 | 144,050 | |||||||||||||||||||||||
| Diluted | 144,938 | 145,118 | 145,040 | 145,782 | 144,995 | 145,359 | 145,289 | 145,355 | 145,393 | |||||||||||||||||||||||
| * Per share data may be impacted by rounding. | ||||||||||||||||||||||||||||||||
IS - 3
DOVER CORPORATION
QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| Adjusted net earnings: | ||||||||||||||||||||||||||||||||
| Net earnings | $ | 232,769 | $ | 264,508 | $ | 497,277 | $ | 176,279 | $ | 124,766 | $ | 301,045 | $ | 200,300 | $ | 182,106 | $ | 683,451 | ||||||||||||||
Acquisition-related amortization, pre-tax 1 | 35,516 | 35,162 | 70,678 | 34,062 | 34,101 | 68,163 | 35,325 | 35,027 | 138,515 | |||||||||||||||||||||||
Acquisition-related amortization, tax impact 2 | (8,720) | (8,571) | (17,291) | (8,411) | (8,451) | (16,862) | (8,810) | (8,695) | (34,367) | |||||||||||||||||||||||
Rightsizing and other costs, pre-tax 3 | 4,162 | 10,779 | 14,941 | 7,859 | 16,840 | 24,699 | 5,848 | 20,925 | 51,472 | |||||||||||||||||||||||
Rightsizing and other costs, tax impact 2 | (1,031) | (2,597) | (3,628) | (1,605) | (3,452) | (5,057) | (1,343) | (4,402) | (10,802) | |||||||||||||||||||||||
(Gain) loss on disposition, pre-tax 4 | — | — | — | (6,551) | 781 | (5,770) | 557 | — | (5,213) | |||||||||||||||||||||||
(Gain) loss on disposition, tax-impact 2 | — | — | — | 1,592 | (190) | 1,402 | (135) | — | 1,267 | |||||||||||||||||||||||
Adjusted net earnings | $ | 262,696 | $ | 299,281 | $ | 561,977 | $ | 203,225 | $ | 164,395 | $ | 367,620 | $ | 231,742 | $ | 224,961 | $ | 824,323 | ||||||||||||||
| Adjusted diluted net earnings per share: | ||||||||||||||||||||||||||||||||
| Diluted net earnings per share | $ | 1.61 | $ | 1.82 | $ | 3.43 | $ | 1.21 | $ | 0.86 | $ | 2.07 | $ | 1.38 | $ | 1.25 | $ | 4.70 | ||||||||||||||
Acquisition-related amortization, pre-tax 1 | 0.25 | 0.24 | 0.49 | 0.23 | 0.24 | 0.47 | 0.24 | 0.24 | 0.95 | |||||||||||||||||||||||
Acquisition-related amortization, tax impact 2 | (0.06) | (0.06) | (0.12) | (0.06) | (0.06) | (0.12) | (0.06) | (0.06) | (0.24) | |||||||||||||||||||||||
Rightsizing and other costs, pre-tax 3 | 0.03 | 0.07 | 0.10 | 0.05 | 0.12 | 0.17 | 0.04 | 0.14 | 0.35 | |||||||||||||||||||||||
Rightsizing and other costs, tax impact 2 | (0.01) | (0.02) | (0.03) | (0.01) | (0.02) | (0.03) | (0.01) | (0.03) | (0.07) | |||||||||||||||||||||||
(Gain) loss on disposition, pre-tax 4 | — | — | — | (0.04) | — | (0.04) | — | — | (0.03) | |||||||||||||||||||||||
(Gain) loss on disposition, tax-impact 2 | — | — | — | 0.01 | — | 0.01 | — | — | 0.01 | |||||||||||||||||||||||
Adjusted diluted net earnings per share | $ | 1.81 | $ | 2.06 | $ | 3.87 | $ | 1.39 | $ | 1.13 | $ | 2.53 | $ | 1.60 | $ | 1.55 | $ | 5.67 | ||||||||||||||
1 Includes amortization on acquisition-related intangible assets and inventory step-up. | ||||||||||||||||||||||||||||||||
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period. | ||||||||||||||||||||||||||||||||
3 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges. | ||||||||||||||||||||||||||||||||
4 Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment, including working capital adjustments. | ||||||||||||||||||||||||||||||||
| * Per share data and totals may be impacted by rounding. | ||||||||||||||||||||||||||||||||
IS - 4
DOVER CORPORATION
QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP)
(unaudited)(in thousands)
Non-GAAP Reconciliations
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA | ||||||||||||||||||||||||||||||||
| Engineered Products: | ||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 68,779 | $ | 62,720 | $ | 131,499 | $ | 69,094 | $ | 47,702 | $ | 116,796 | $ | 64,890 | $ | 56,481 | $ | 238,167 | ||||||||||||||
| Rightsizing and other costs | 4,019 | 4,654 | 8,673 | 361 | 4,169 | 4,530 | 2,375 | 4,625 | 11,530 | |||||||||||||||||||||||
| Adjusted EBIT - Segment | 72,798 | 67,374 | 140,172 | 69,455 | 51,871 | 121,326 | 67,265 | 61,106 | 249,697 | |||||||||||||||||||||||
| Adjusted EBIT % | 17.0 % | 15.2 % | 16.1 % | 17.0 % | 15.2 % | 16.2 % | 17.4 % | 15.5 % | 16.3 % | |||||||||||||||||||||||
Adjusted D&A 1 | 10,594 | 9,695 | 20,289 | 10,122 | 9,722 | 19,844 | 10,651 | 10,193 | 40,688 | |||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 83,392 | $ | 77,069 | $ | 160,461 | $ | 79,577 | $ | 61,593 | $ | 141,170 | $ | 77,916 | $ | 71,299 | $ | 290,385 | ||||||||||||||
| Adjusted EBITDA % | 19.5 % | 17.4 % | 18.4 % | 19.5 % | 18.0 % | 18.8 % | 20.2 % | 18.1 % | 19.0 % | |||||||||||||||||||||||
| Fueling Solutions: | ||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 66,480 | $ | 78,755 | $ | 145,235 | $ | 53,498 | $ | 47,214 | $ | 100,712 | $ | 66,601 | $ | 69,661 | $ | 236,974 | ||||||||||||||
| Rightsizing and other costs | 58 | 1,657 | 1,715 | 1,493 | 868 | 2,361 | 1,615 | 2,727 | 6,703 | |||||||||||||||||||||||
| Adjusted EBIT - Segment | 66,538 | 80,412 | 146,950 | 54,991 | 48,082 | 103,073 | 68,216 | 72,388 | 243,677 | |||||||||||||||||||||||
| Adjusted EBIT % | 17.1 % | 18.4 % | 17.8 % | 15.3 % | 14.7 % | 15.0 % | 17.9 % | 17.7 % | 16.5 % | |||||||||||||||||||||||
Adjusted D&A 1 | 19,180 | 19,475 | 38,655 | 18,339 | 17,783 | 36,122 | 18,014 | 18,225 | 72,361 | |||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 85,718 | $ | 99,887 | $ | 185,605 | $ | 73,330 | $ | 65,865 | $ | 139,195 | $ | 86,230 | $ | 90,613 | $ | 316,038 | ||||||||||||||
| Adjusted EBITDA % | 22.0 % | 22.9 % | 22.5 % | 20.4 % | 20.2 % | 20.3 % | 22.7 % | 22.1 % | 21.4 % | |||||||||||||||||||||||
| Imaging & Identification: | ||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 56,992 | $ | 60,747 | $ | 117,739 | $ | 51,482 | $ | 38,046 | $ | 89,528 | $ | 51,928 | $ | 52,017 | $ | 193,473 | ||||||||||||||
| Rightsizing and other costs | 682 | 178 | 860 | 264 | (527) | (263) | 99 | 6,191 | 6,027 | |||||||||||||||||||||||
| Adjusted EBIT - Segment | 57,674 | 60,925 | 118,599 | 51,746 | 37,519 | 89,265 | 52,027 | 58,208 | 199,500 | |||||||||||||||||||||||
| Adjusted EBIT % | 20.3 % | 20.7 % | 20.5 % | 20.2 % | 16.5 % | 18.4 % | 19.6 % | 20.2 % | 19.2 % | |||||||||||||||||||||||
Adjusted D&A 1 | 9,218 | 9,184 | 18,402 | 8,769 | 9,224 | 17,993 | 9,809 | 10,201 | 38,003 | |||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 66,892 | $ | 70,109 | $ | 137,001 | $ | 60,515 | $ | 46,743 | $ | 107,258 | $ | 61,836 | $ | 68,409 | $ | 237,503 | ||||||||||||||
| Adjusted EBITDA % | 23.5 % | 23.8 % | 23.7 % | 23.6 % | 20.5 % | 22.1 % | 23.3 % | 23.8 % | 22.9 % | |||||||||||||||||||||||
| Pumps & Process Solutions: | ||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 123,645 | $ | 138,632 | $ | 262,277 | $ | 66,079 | $ | 67,702 | $ | 133,781 | $ | 89,786 | $ | 81,709 | $ | 305,276 | ||||||||||||||
| Rightsizing and other (benefits) costs | (2,006) | 899 | (1,107) | 3,846 | 4,691 | 8,537 | 1,771 | 3,128 | 13,436 | |||||||||||||||||||||||
| Adjusted EBIT - Segment | 121,639 | 139,531 | 261,170 | 69,925 | 72,393 | 142,318 | 91,557 | 84,837 | 318,712 | |||||||||||||||||||||||
| Adjusted EBIT % | 30.8 % | 32.5 % | 31.7 % | 21.9 % | 23.4 % | 22.6 % | 26.3 % | 24.4 % | 24.1 % | |||||||||||||||||||||||
Adjusted D&A 1 | 16,926 | 16,866 | 33,792 | 16,230 | 16,816 | 33,046 | 17,206 | 17,565 | 67,817 | |||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 138,565 | $ | 156,397 | $ | 294,962 | $ | 86,155 | $ | 89,209 | $ | 175,364 | $ | 108,763 | $ | 102,402 | $ | 386,529 | ||||||||||||||
| Adjusted EBITDA % | 35.1 % | 36.5 % | 35.8 % | 27.0 % | 28.9 % | 27.9 % | 31.3 % | 29.5 % | 29.2 % | |||||||||||||||||||||||
| Refrigeration & Food Equipment: | ||||||||||||||||||||||||||||||||
| Segment earnings (EBIT) | $ | 38,117 | $ | 48,971 | $ | 87,088 | $ | 23,529 | $ | 11,459 | $ | 34,988 | $ | 40,159 | $ | 27,725 | $ | 102,872 | ||||||||||||||
| Rightsizing and other (benefits) costs | (38) | 2,539 | 2,501 | 704 | 6,016 | 6,720 | (971) | 726 | 6,475 | |||||||||||||||||||||||
(Gain) loss on disposition 2 | — | — | — | (6,551) | 781 | (5,770) | 557 | — | (5,213) | |||||||||||||||||||||||
| Adjusted EBIT - Segment | 38,079 | 51,510 | 89,589 | 17,682 | 18,256 | 35,938 | 39,745 | 28,451 | 104,134 | |||||||||||||||||||||||
| Adjusted EBIT % | 10.2 % | 12.0 % | 11.2 % | 5.7 % | 6.2 % | 5.9 % | 10.8 % | 8.3 % | 7.9 % | |||||||||||||||||||||||
Adjusted D&A 1 | 11,745 | 12,077 | 23,822 | 11,548 | 11,421 | 22,969 | 12,081 | 11,491 | 46,541 | |||||||||||||||||||||||
| Adjusted EBITDA - Segment | $ | 49,824 | $ | 63,587 | $ | 113,411 | $ | 29,230 | $ | 29,677 | $ | 58,907 | $ | 51,826 | $ | 39,942 | $ | 150,675 | ||||||||||||||
| Adjusted EBITDA % | 13.4 % | 14.8 % | 14.1 % | 9.4 % | 10.1 % | 9.7 % | 14.1 % | 11.7 % | 11.4 % | |||||||||||||||||||||||
| Total Segments: | ||||||||||||||||||||||||||||||||
Segment earnings (EBIT) 3 | $ | 354,013 | $ | 389,825 | $ | 743,838 | $ | 263,682 | $ | 212,123 | $ | 475,805 | $ | 313,364 | $ | 287,593 | $ | 1,076,762 | ||||||||||||||
| Rightsizing and other costs | 2,715 | 9,927 | 12,642 | 6,668 | 15,217 | 21,885 | 4,889 | 17,397 | 44,171 | |||||||||||||||||||||||
(Gain) loss on disposition 2 | — | — | — | (6,551) | 781 | (5,770) | 557 | — | (5,213) | |||||||||||||||||||||||
Adjusted EBIT - Segment 4 | 356,728 | 399,752 | 756,480 | 263,799 | 228,121 | 491,920 | 318,810 | 304,990 | 1,115,720 | |||||||||||||||||||||||
Adjusted EBIT % 4 | 19.1 % | 19.7 % | 19.4 % | 15.9 % | 15.2 % | 15.6 % | 18.2 % | 17.1 % | 16.7 % | |||||||||||||||||||||||
Adjusted D&A 1 | 67,663 | 67,297 | 134,960 | 65,008 | 64,966 | 129,974 | 67,761 | 67,675 | 265,410 | |||||||||||||||||||||||
Adjusted EBITDA - Segment 4 | $ | 424,391 | $ | 467,049 | $ | 891,440 | $ | 328,807 | $ | 293,087 | $ | 621,894 | $ | 386,571 | $ | 372,665 | $ | 1,381,130 | ||||||||||||||
Adjusted EBITDA % 4 | 22.7 % | 23.0 % | 22.9 % | 19.9 % | 19.5 % | 19.7 % | 22.1 % | 20.9 % | 20.7 % | |||||||||||||||||||||||
1 Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs. | ||||||||||||||||||||||||||||||||
2 Q1, Q2, Q3, and FY 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively. | ||||||||||||||||||||||||||||||||
3 Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings. | ||||||||||||||||||||||||||||||||
4 Refer to Non-GAAP Disclosures section for definition. | ||||||||||||||||||||||||||||||||
IS - 5
DOVER CORPORATION
REVENUE GROWTH FACTORS (NON-GAAP)
(unaudited)(in thousands, except per share data*)
Non-GAAP Reconciliations
Revenue Growth Factors
| 2021 | |||||||||||
| Q2 | Q2 YTD | ||||||||||
| Organic | |||||||||||
| Engineered Products | 25.4 | % | 12.9 | % | |||||||
| Fueling Solutions | 24.9 | % | 13.4 | % | |||||||
| Imaging & Identification | 20.2 | % | 11.4 | % | |||||||
| Pumps & Process Solutions | 33.6 | % | 25.8 | % | |||||||
| Refrigeration & Food Equipment | 43.5 | % | 30.5 | % | |||||||
| Total Organic | 29.7 | % | 18.7 | % | |||||||
| Acquisitions | 1.3 | % | 1.3 | % | |||||||
| Dispositions | — | % | (0.2) | % | |||||||
| Currency translation | 4.5 | % | 3.8 | % | |||||||
| Total* | 35.5 | % | 23.6 | % | |||||||
* Totals may be impacted by rounding.
| 2021 | |||||
| Q2 | |||||
| Organic | |||||
| United States | 25.0 | % | |||
| Other Americas | 49.6 | % | |||
| Europe | 29.8 | % | |||
| Asia | 37.6 | % | |||
| Other | 43.0 | % | |||
| Total Organic | 29.7 | % | |||
| Acquisitions | 1.3 | % | |||
| Dispositions | — | % | |||
| Currency translation | 4.5 | % | |||
| Total* | 35.5 | % | |||
* Totals may be impacted by rounding.
| Adjusted EPS Guidance Reconciliation | |||||||||||
| Range | |||||||||||
| 2021 Guidance for Earnings per Share (GAAP) | $ | 6.45 | $ | 6.55 | |||||||
| Acquisition-related amortization, net | 0.74 | ||||||||||
| Rightsizing and other costs, net | 0.11 | ||||||||||
| 2021 Guidance for Adjusted Earnings per Share (Non-GAAP) | $ | 7.30 | $ | 7.40 | |||||||
IS - 6
DOVER CORPORATION
QUARTERLY CASH FLOW AND FREE CASH FLOW (NON-GAAP)
(unaudited)(in thousands)
Quarterly Cash Flow
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| Net Cash Flows Provided By (Used In): | ||||||||||||||||||||||||||||||||
| Operating activities | $ | 177,184 | $ | 260,073 | $ | 437,257 | $ | 75,863 | $ | 271,809 | $ | 347,672 | $ | 339,247 | $ | 417,891 | $ | 1,104,810 | ||||||||||||||
| Investing activities | (29,572) | (121,631) | (151,203) | (230,511) | (67,763) | (298,274) | (64,724) | (118,381) | (481,379) | |||||||||||||||||||||||
| Financing activities | (124,239) | (75,949) | (200,188) | 280,954 | (67,458) | 213,496 | (496,832) | (222,954) | (506,290) | |||||||||||||||||||||||
Quarterly Free Cash Flow (Non-GAAP)
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
Cash flow from operating activities1 | $ | 177,184 | $ | 260,073 | $ | 437,257 | $ | 75,863 | $ | 271,809 | $ | 347,672 | $ | 339,247 | $ | 417,891 | $ | 1,104,810 | ||||||||||||||
| Less: Capital expenditures | (31,260) | (41,971) | (73,231) | (40,172) | (38,999) | (79,171) | (44,393) | (42,128) | (165,692) | |||||||||||||||||||||||
| Free cash flow | $ | 145,924 | $ | 218,102 | $ | 364,026 | $ | 35,691 | $ | 232,810 | $ | 268,501 | $ | 294,854 | $ | 375,763 | $ | 939,118 | ||||||||||||||
| Free cash flow as a percentage of revenue | 7.8 % | 10.7 % | 9.3 % | 2.2 % | 15.5 % | 8.5 % | 16.9 % | 21.1 % | 14.1 % | |||||||||||||||||||||||
| Free cash flow as a percentage of net earnings | 62.7 % | 82.5 % | 73.2 % | 20.2 % | 186.6 % | 89.2 % | 147.2 % | 206.3 % | 137.4 % | |||||||||||||||||||||||
1 FY 2020 cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2, Q3, and Q4 and advanced
payments on contracts, most significantly in Q3.
IS - 7
DOVER CORPORATION
PERFORMANCE MEASURES
(unaudited)(in thousands)
| 2021 | 2020 | |||||||||||||||||||||||||||||||
| Q1 | Q2 | Q2 YTD | Q1 | Q2 | Q2 YTD | Q3 | Q4 | FY 2020 | ||||||||||||||||||||||||
| BOOKINGS | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 528,310 | $ | 497,200 | $ | 1,025,510 | $ | 414,972 | $ | 278,373 | $ | 693,345 | $ | 381,139 | $ | 484,002 | $ | 1,558,486 | ||||||||||||||
| Fueling Solutions | 422,668 | 453,146 | 875,814 | 373,070 | 311,498 | 684,568 | 383,902 | 403,400 | 1,471,870 | |||||||||||||||||||||||
| Imaging & Identification | 293,614 | 299,608 | 593,222 | 272,604 | 221,315 | 493,919 | 266,423 | 304,756 | 1,065,098 | |||||||||||||||||||||||
| Pumps & Process Solutions | 551,365 | 521,010 | 1,072,375 | 369,403 | 275,872 | 645,275 | 323,801 | 365,262 | 1,334,338 | |||||||||||||||||||||||
| Refrigeration & Food Equipment | 537,326 | 606,545 | 1,143,871 | 355,157 | 326,400 | 681,557 | 449,549 | 379,393 | 1,510,499 | |||||||||||||||||||||||
| Intra-segment eliminations | (863) | (498) | (1,361) | (375) | (460) | (835) | (926) | (425) | (2,186) | |||||||||||||||||||||||
| Total consolidated bookings | $ | 2,332,420 | $ | 2,377,011 | $ | 4,709,431 | $ | 1,784,831 | $ | 1,412,998 | $ | 3,197,829 | $ | 1,803,888 | $ | 1,936,388 | $ | 6,938,105 | ||||||||||||||
| BACKLOG | ||||||||||||||||||||||||||||||||
| Engineered Products | $ | 562,557 | $ | 613,517 | $ | 453,867 | $ | 378,874 | $ | 373,458 | $ | 463,701 | ||||||||||||||||||||
| Fueling Solutions | 238,822 | 256,497 | 211,518 | 199,305 | 204,574 | 201,521 | ||||||||||||||||||||||||||
| Imaging & Identification | 198,556 | 206,125 | 170,119 | 168,904 | 171,158 | 192,785 | ||||||||||||||||||||||||||
| Pumps & Process Solutions | 539,097 | 634,477 | 397,969 | 379,090 | 361,631 | 390,238 | ||||||||||||||||||||||||||
| Refrigeration & Food Equipment | 677,309 | 854,188 | 356,133 | 390,368 | 472,140 | 510,498 | ||||||||||||||||||||||||||
| Intra-segment eliminations | (544) | (262) | (159) | (367) | (269) | (192) | ||||||||||||||||||||||||||
| Total consolidated backlog | $ | 2,215,797 | $ | 2,564,542 | $ | 1,589,447 | $ | 1,516,174 | $ | 1,582,692 | $ | 1,758,551 | ||||||||||||||||||||
Bookings Growth Factors
| 2021 | |||||||||||
| Q2 | Q2 YTD | ||||||||||
| Organic | |||||||||||
| Engineered Products | 73.5 | % | 44.4 | % | |||||||
| Fueling Solutions | 33.5 | % | 19.2 | % | |||||||
| Imaging & Identification | 26.6 | % | 12.0 | % | |||||||
| Pumps & Process Solutions | 81.7 | % | 59.7 | % | |||||||
| Refrigeration & Food Equipment | 83.1 | % | 66.2 | % | |||||||
| Total Organic | 61.2 | % | 41.7 | % | |||||||
| Acquisitions | 2.0 | % | 1.8 | % | |||||||
| Dispositions | — | % | (0.2) | % | |||||||
| Currency translation | 5.0 | % | 4.0 | % | |||||||
| Total* | 68.2 | % | 47.3 | % | |||||||
* Totals may be impacted by rounding.
IS - 8
Non-GAAP Measures Definitions
In an effort to provide investors with additional information regarding our results as determined by GAAP, management also discloses non-GAAP information that management believes provides useful information to investors. Adjusted net earnings, adjusted diluted net earnings per share, total segment earnings (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per share, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
Adjusted net earnings represents net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, and a gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.
Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.
Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.
Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.
Management believes these measures are useful to investors to better understand the Company’s ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.
Performance Measures Definitions
Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.
Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.
Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.
We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
IS - 9
Earnings Conference Call Second Quarter 2021 July 20, 2021 9:00am CT Exhibit 99.2
2 Forward-Looking Statements and Non-GAAP Measures We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks, including the impacts of the novel coronavirus (COVID-19) on the global economy and on our customers, suppliers, employees, operations, business, liquidity and cash flow. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file from time to time with the SEC, including our Annual Report on Form 10-K for 2020 and Quarterly Reports on Form 10-Q, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements. We would also direct your attention to our website, dovercorporation.com, where considerably more information can be found. In addition to financial measures based on U.S. GAAP, Dover provides supplemental non-GAAP financial information. Management uses non-GAAP measures in addition to GAAP measures to understand and compare operating results across periods, make resource allocation decisions, and for forecasting and other purposes. Management believes these non-GAAP measures reflect results in a manner that enables, in many instances, more meaningful analysis of trends and facilitates comparison of results across periods and to those of peer companies. These non-GAAP financial measures have no standardized meaning presented in U.S. GAAP and may not be comparable to other similarly titled measures used by other companies due to potential differences between the companies in calculations. The use of these non-GAAP measures has limitations and they should not be considered as substitutes for measures of financial performance and financial position as prepared in accordance with U.S. release and investor supplement for the second
3 YTD Free Cash Flow(1) +450 bps Adj. Segment EBIT Margin(1) to 19.7% +$96M Y-o-Y +80bps to 9.3% of Revenue Q2 2021 Highlights (1) Non-GAAP measures (definitions and reconciliations in appendix) (2) See performance measures definitions in appendix (3) Refer to definition of total segment earnings (EBIT) margin in appendix 2.6 Jun-21 1.5 Jun-19 Jun-20 1.4 Mar-21 2.2 $ Billions Revenue growth: 15% - 17% (All-in) EPS: $6.45 - $6.55 (GAAP); $7.30 $7.40 (Adjusted(1)) FCF(1): 12%-14% of Revenue Revenue +61% organic(2) Book-to-bill(2): 1.17, >1 across all segments +30% organic(1) Growth in all segments (sequentially and Y-o-Y) Diluted EPS +82% Adjusted Diluted EPS(1) to $2.06 +36% Y-o-Y at $2.0B Bookings(2) +68% Y-o-Y to $2.4B Segment EBIT Margin(3) +510 bps to 19.2% +36% Y-o-Y +112% Y-o-Y to $1.82 Backlog(2) +69% Y-o-Y growth rate Guidance Revised upward
4 Summary Corporate Q2 Results Q2 2021 Highlights and Comments Revenue change (Y-o-Y) All-in Organic(1) +36% +30% Y-o-Y growth in all segments Q2 FX impact: +5%; acquisitions +1% Bookings change (Y-o-Y) All-in(2) Organic(2) +68% +61% Q2 book-to-bill(2): 1.17; bookings up Y-o-Y in all five segments Backlog +69% Y-o-Y; up across all five segments Segment EBIT margin improvement (Y-o-Y) Reported(3) Adjusted(1) +510 bps +450 bps Accretion driven by volume and productivity initiatives 32% Y-o-Y Adj. EBIT conversion margin(1) Net Earnings Reported Adjusted(1) $265M $299M Reported Q2 Y-o-Y change: +112% Adjusted(1) Q2 Y-o-Y change: +82% Diluted EPS Reported Adjusted(1) $1.82 $2.06 Reported Q2 Y-o-Y change: +112% Adjusted(1) Q2 Y-o-Y change: +82% Free Cash Flow (% of)(1) Revenue Adj. Earnings 11% 73% Q2 FCF(1) down $15M (-6%) Y-o-Y on working capital investment Guidance and other activities 2021 revised guidance: Revenue growth: 15% - 17% (All-in) EPS: $6.45 - $6.55 (GAAP); $7.30 - $7.40 (Adjusted(1)) FCF(1): 12%-14% of Revenue (1) Non-GAAP measures (definitions and/or reconciliations in appendix) (2) See performance measures definitions in appendix (3) Refer to definition of total segment earnings (EBIT) margin in appendix
5 Segment Revenue ($M) / Organic Change % Adj. EBIT % / Y-o-Y Organic Revenue Change Performance Commentary DEP $442 +25% 15.2% +0 bps +0% Top line strength in vehicle aftermarket, industrial automation, and aerospace & defense; recovery in industrial winches; waste handling flat on shipment timing Backlog(2) up $235M Y-o-Y (+62%); book-to-bill(2) 1.12; organic bookings(2) up 74% driven by strong orders in waste handling and vehicle aftermarket DFS $437 +25% 18.4% +370 bps +6% Strength in NA retail fueling (above and below ground, EMV) and vehicle wash; continued softness in Asia (China) and fuel transport Backlog(2) up $57M Y-o-Y (+29%); book-to-bill(2) 1.04; organic bookings(2) up 34% on activity in NA retail fueling, vehicle wash DII $294 +20% 20.7% +420 bps +3% Robust demand in marking & coding, serialization software. Textiles improving Backlog(2) up $37M Y-o-Y (+22%); book-to-bill(2) 1.02; organic bookings(2) up 27% driven by textiles and marking & coding DPPS $429 +34% 32.5% +910 bps +22% Growth in biopharma connectors and pumps, industrial pumps (+24%) and polymer processing. Activity in compression improving Backlog(2) up $255M Y-o-Y (+67%); book-to-bill(2) 1.22; organic bookings(2) up 82% on double-digit growth across all operating units DRFE $431 +44% 12.0% +580 bps +15% Strong demand in food retail, heat exchangers, and can making. Growth in foodservice equipment chains, improving outlook in institutional foodservice Backlog(2) up $464M Y-o-Y (+119%) to $854M, driven by can making and food retail ($290M and $457M as of 6/30/21, respectively); book-to-bill(2) 1.41; organic bookings(2) up 83% on 50+% growth across all operating units Segment Results Q2 2021(1) (1) Non-GAAP (definitions and reconciliations in appendix) (2) See performance measures definitions in appendix
6 Q2 2020 Revenue & Bookings Q2 2021 Revenue Change in Organic Revenue(1): +$445M, or +29.7% DIIDFS DPPS DRFE FX ACQ./ DISP. (2) Q2 2021 DEP ACQ./ DISP. (3) DRFEQ2 2020 DFS DII DPPS FX Q2 2021 Note: $ in millions. Numbers may not add due to rounding Q2 2021 Bookings(4) Change in Organic Bookings(4): +$865M, or +61.2% (1) Non-GAAP measure (definition and reconciliation in appendix) (2) Acquisitions: $19M, dispositions: $0M DEP ($M) 1,499 81 68 2,03212887 10446 ($M) 19 104 71 2,377271205 22559 281,413 Q2 2021 % of Revenue 8% 23% 3% 54% 12%ASIA OTHER EUROPE OTHER AMER. US 43% 38% 30% 50% 25% Rev Growth(1) Organic Organic (3) Acquisitions: $28M, dispositions: $0M (4) See performance measure definitions in appendix Q2 YTD 18% 29% 21% 25% 15%
7 Q2 2021 Adjusted Segment EBIT and Adjusted Net Earnings CORP. EXPENSE GAAP EARNINGS ACQ. AMORT. ADJ. ON SALE OF CHINO RIGHT SIZING ADJ. EARNINGS SEGMENT EBIT INT./TAX EXPENSE ADJ. EARNINGS ACQ. AMORT. RIGHT SIZING GAAP EARNINGS Change in Adjusted Net Earnings (3) +$135M 125 13 1 26 164 173 -14 -24 299 -27 Q2 2020 Q2 2021 ($M) Note: $ in millions. Numbers may not add due to rounding 265-8 DRFEDIIDFSADJ. EBIT D&A (1) ADJ. EBITDA DEP DPPS ADJ. EBITDA D&A (2) ADJ. EBIT 19.5% 19.7% Change in Adjusted Segment EBIT (3) +$173M Q2 2021 228 293 2315 400 ($M)67 15.2% Q2 2020 -6734 34 23.0% 46765 (1) Depreciation: $31M, Amortization: $34M (2) Depreciation: $32M, Amortization: $35M (3) Non-GAAP measures (definitions and reconciliations in appendix) 11.0% 14.7% +370 bps +350 bps
8 YTD 2021 Free Cash Flow 12.3% (1) Includes stock-based compensation and changes in other current and non-current assets and liabilities (2) Non-GAAP measures (reconciliations and definitions in appendix) Note: Numbers may not add due to rounding $M Net earnings 497 301 +196 D&A 145 136 +9 Adjustment for gain on disposition - (6) +6 Change in working capital (188) (101) -87 Change in other(1) (17) 17 -35 Cash flow from operations 437 348 +89 Capex (73) (79) +6 Free cash flow(2) 364 269 +96 FCF % of revenue(2) 9.3% 8.5% +80 bps FCF % of adj. earnings(2) 64.8% 73.0% -820 bps
9 Segment Market / Demand Operations1 Price Cost Mix H2 2021 Comments DEP Robust backlogs in vehicle aftermarket and waste handling Largest materials cost headwind in the portfolio Supply chain and hiring constraints DFS US EMV headwind; growth in software/systems, underground; vehicle wash - mix from EMV and Asia, M&A / + mix from underground and vehicle wash DII Robust activity in core marking & coding and serialization software; recovery in textile printing ongoing DPPS Durable strength in biopharma and pumps; industrial pumps ramping Recovery in compression impacts mix (-) DRFE Double-digit growth expected in all four operating businesses Components, labor and logistics costs Volume leverage and productivity offset input cost inflation H2 Outlook for Key Performance Drivers - Directional impact on top-line and earnings margin (positive, neutral, negative) (1) Inputs and labor availability, logistics
10 Select Capex Projects Acquisitions DEP ESG VSG Productivity Safety Paint line upgrade Floor plan optimization DFS DFS Efficiency Global product platform harmonization Digital Secure wireless communications DII M-I Capacity Efficiency India facility consolidation and expansion Digital Brand protection and customer engagement software DPPS CPC PSG Capacity Process automation Clean room expansion Digital Single-use pumps Connected dispensing systems New disposable micro- dosing pump technology DRFE Belvac SWEP Capacity Lynchburg facility expansion European facility expansion Total Spend: ~$75M1 Total Spend: $88M2 Capital Deployment Update (1) Total spend over 2020, 2021 ,2022 (2) Net of cash acquired and including contingent consideration
11 FY2021 Guidance Update (1) Non-GAAP measure (definition and/or reconciliation in appendix) (2) Mid-point Euro/Dollar assumption: 1.19 Post-Q1 Guide Revised Guide All-in Revenue Growth 10-12% 15-17% EPS GAAP Adj.(1) $5.92 - $6.02 $6.75 - $6.85 $6.45 - $6.55 $7.30 - $7.40 Tax rate 21% - 22% No change FCF(1) % of Revenue 11% - 13% 12% - 14% Capex ~$175 200 million No change +5 ppt +$0.55 $7.0B $7.1B $6.7B 20202018 18.6% 14.8% 16.6% 2019 16.7% 2021E $7.7 7.8B Adj. Segment EBIT Margin (%) Revenue ($B) $4.97 $5.93 $5.67 0 2 4 6 8 10 2021E20202018 2019 $7.30-$7.40 +14% CAGR Revenue and Adj. Segment EBIT Margin(1) Adj. Earnings Per Share(1) Prior guidance(2) Prior guidance(2) 25-35 conversion(1) +1 ppt
12 Appendix
13 Organic Revenue and Bookings Bridges Revenue Bookings 25.4% 73.5% 24.9% 33.5% 20.2% 26.6% 33.6% 81.7% 43.5% 83.1% 29.7% 61.2% 1.3% 2.0% 0.0% 0.0% 4.5% 5.0% Total 35.5% 68.2% Q2 2021 Q2 2021 YTD 25.0% 15.4% 49.6% 24.7% 29.8% 20.6% 37.6% 29.0% 43.0% 17.8% 29.7% 18.7% 1.3% 1.3% 0.0% -0.2% 4.5% 3.8% Total 35.5% 23.6% Acquisitions Dispositions Currency translation Organic US Other Americas Europe Asia Other Total Organic Acquisitions Dispositions Currency translation Organic Refrigeration & Food Equipment Total Organic Engineered Products Pumps & Process Solutions Fueling Solutions Imaging & Identification Q2 2021 Organic Growth Geographic Revenue Growth Factors Note: Numbers may not add due to rounding
14 Q2 2020 to Q2 2021 Revenue and Bookings Bridges by Segment Note: Numbers may not add due to rounding DEP DFS DII DPPS DRFE Total 342 326 228 309 294 1,499 87 81 46 104 128 445 13 15 17 14 9 68 - 14 3 2 - 19 442 437 294 429 431 2,032 DEP DFS DII DPPS DRFE Total 278 311 221 276 326 1,413 205 104 59 225 271 865 14 17 17 15 9 71 - 20 2 5 - 28 497 453 300 521 607 2,377 ($ in millions) Q2 2020 Revenue Bookings Bridge by Segment ($ in millions) Acquisitions / Dispositions Q2 2021 Revenue Organic Growth FX Revenue Bridge by Segment FX Q2 2021 Bookings Q2 2020 Bookings Organic Growth Acquisitions / Dispositions
15 Organic Revenue Growth and Q2 2021 vs. Q2 2019 Comparison Note: Numbers may not add due to rounding Segment Growth Factors Q2 Organic Growth Q2 '21 vs. Q2 '19 2020 2021 Organic Growth -20.1% 25.4% 0.3% -14.8% 24.9% 6.4% -14.0% 20.2% 3.3% -8.8% 33.6% 21.8% -20.2% 43.5% 14.5% -16.0% 29.7% 9.0% 0.7% 1.3% 2.0% -0.7% 0.0% -0.7% -1.2% 4.5% 3.2% Total -17.2% 35.5% 12.2% Acquisitions Dispositions Currency translation Organic Refrigeration & Food Equipment Total Organic Engineered Products Pumps & Process Solutions Fueling Solutions Imaging & Identification
16 Reconciliation of Q2 2021 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs DEP DFS DII DPPS DRFE Total 442 437 294 429 431 2,032 - - - - - 265 - - - - - 41 - - - - - 26 - - - - - 59 63 79 61 139 49 390 14.2% 18.0% 20.7% 32.3% 11.4% 19.2% 5 2 0 1 3 10 67 80 61 140 52 400 15.2% 18.4% 20.7% 32.5% 12.0% 19.7% 10 19 9 17 12 67 77 100 70 156 64 467 17.4% 22.9% 23.8% 36.5% 14.8% 23.0% Q2 2021 ($ in millions) Revenue Net earnings Add back: Adjusted EBITDA - Segment Adjusted EBITDA % Income tax expense Segment earnings (EBIT) EBIT % Adjustments: Rightsizing and other costs Corporate expense Adjusted EBIT % Adjusted depreciation and amortization expense(1) Interest expense, net Adjusted EBIT - Segment Note: Numbers may not add due to rounding
17 Reconciliation of Q2 2020 Net Earnings to Adj. EBIT and Adj. EBITDA and Calculation of Adj. EBIT Margin and Adj. EBITDA Margin by Segment DEP DFS DII DPPS DRFE Total 342 326 228 309 294 1,499 - - - - - 125 - - - - - 27 - - - - - 28 - - - - - 32 48 47 38 68 11 212 13.9% 14.5% 16.7% 21.9% 3.9% 14.1% 4 1 (1) 5 6 15 - - - - 1 1 52 48 38 72 18 228 15.2% 14.7% 16.5% 23.4% 6.2% 15.2% 10 18 9 17 11 65 62 66 47 89 30 293 18.0% 20.2% 20.5% 28.9% 10.1% 19.5% Interest expense, net Loss on Disposition Adjusted EBIT - Segment Adjusted EBIT % Adjusted depreciation and amortization expense (1) Q2 2020 ($ in millions) Revenue Net earnings Add back: Adjusted EBITDA - Segment Adjusted EBITDA % Income tax expense Segment earnings (EBIT) EBIT % Adjustments: Rightsizing and other costs Corporate expense (1) Adjusted depreciation and amortization expense excludes depreciation and amortization included within rightsizing and other costs Note: Numbers may not add due to rounding
18 Reconciliation of Adjusted Net Earnings to Net Earnings and Calculation of Adjusted Diluted EPS under U.S. GAAP Note: Numbers may not add due to rounding ($ in millions, except per share data) Q2 2021 Q2 2020 FY 2020 FY 2019 FY 2018 Net earnings from continuing operations ($) 265 125 683 678 591 Acquisition-related amortization, pre tax 35 34 139 138 146 Acquisition-related amortization, tax impact (9) (8) (34) (35) (37) Rightsizing and other costs, pre tax 11 17 51 32 73 Rightsizing and other costs, tax impact (3) (3) (11) (7) (15) (Loss) / Gain on disposition, pre tax - 1 (5) - - (Loss) / Gain on disposition, tax impact - - 1 - - Loss on extinguishment of debt, pre-tax - - - 24 - Loss on extinguishment of debt, tax impact - - - (5) - Loss on assets held for sale - - - 47 - Tax Cuts and Jobs Act - - - - (3) Adjusted net earnings from continuing operations ($) 299 164 824 872 756 Adjusted net earnings margin 14.7% 11.0% 12.3% 12.2% 10.8% 145 145 145 147 152 Diluted EPS from continuing operations ($) 1.82 0.86 4.70 4.61 3.89 Acquisition-related amortization, pre tax 0.24 0.24 0.95 0.94 0.96 Acquisition-related amortization, tax impact (0.06) (0.06) (0.24) (0.24) (0.24) Rightsizing and other costs, pre tax 0.07 0.12 0.35 0.22 0.48 Rightsizing and other costs, tax impact (0.02) (0.02) (0.07) (0.06) (0.10) (Loss) / Gain on disposition, pre tax - - (0.03) - - (Loss) / Gain on disposition, tax impact - - 0.01 - - Loss on extinguishment of debt, pre-tax - - - 0.16 - Loss on extinguishment of debt, tax impact - - - (0.04) - Loss on assets held for sale - - - 0.32 - Tax Cuts and Jobs Act - - - - (0.02) Adjusted diluted EPS from continuing operations ($) 2.06 1.13 5.67 5.93 4.97
19 Reconciliation of FY 2020, FY 2019, and FY 2018 Earnings from Continuing Operations to Adj. Segment EBIT and Calculation of Adj. EBIT Margin FY 2020 FY 2019 FY 2018 6,684 7,136 6,992 683 678 591 127 124 130 108 121 122 158 165 134 Loss on extinguishment of debt - 24 - 1,077 1,112 977 16.1% 15.6% 14.0% 44 27 59 (5.0) - - - 47 - 1,116 1,186 1,036 16.7% 16.6% 14.8% Loss on sale of Finder Adjusted EBIT - Segment Adjusted EBIT % Income tax expense Segment earnings (EBIT) EBIT % Adjustments: Rightsizing and other costs Gain on AMS Chino ($ in millions) Revenue Earnings from continuing operations Add back: Corporate expense Interest expense, net
20 Reconciliation of Free Cash Flow, EPS to Adjusted EPS, and Adjusted EBIT Conversion Margin Range 2021 Guidance for Earnings per Share (GAAP) $6.45 $6.55 Acquisition-related amortization, net $0.74 Rightsizing and other costs, net $0.11 2021 Guidance for Adjusted Earnings per Share (Non-GAAP) $7.30 $7.40 Note: Numbers may not add due to rounding ($ millions) YTD 2021 YTD 2020 Net Cash Provided by Operating Activities 437 348 Capital Expenditures (73) (79) Free Cash Flow 364 269 Free Cash Flow as a % of Net Earnings 73.2% 89.2% Free Cash Flow as a % of Adjusted Net Earnings 64.8% 73.0% Free Cash Flow as a % of Revenue 9.3% 8.5% Free Cash Flow ($ in millions) Q2 2021 Q2 2020 Revenue 2,032 1,499 533 Adjusted EBIT - Segment 400 228 172 Adjusted EBIT Conversion Margin 32% Adj. EBIT Conversion Margin
21 Non-GAAP Definitions Definitions of Non-GAAP Measures: Adjusted Net Earnings: is defined as net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, and gain on dispositions. Adjusted Net Earnings Margin: is defined as adjusted net earnings divided by revenue. Adjusted Diluted Net Earnings Per Share: is defined as adjusted net earnings divided by average diluted shares. Total Segment Earnings (EBIT): is defined as net earnings before income taxes, net interest expense and corporate expenses. Total Segment Earnings (EBIT) Margin: is defined as total segment earnings (EBIT) divided by revenue. Adjusted EBIT by Segment: is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, and gain on dispositions Adjusted EBIT Margin by Segment: is defined as adjusted EBIT by segment divided by segment revenue. The bps change Y-o-Y is calculated as the difference between adjusted EBIT margin for the current period and the prior period. Adjusted EBITDA by Segment: is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment: is defined as adjusted EBITDA by segment divided by segment revenue. Adjusted EBIT Conversion Margin: is defined as the change in total adjusted segment earnings (EBIT) divided by the change in revenue. Free Cash Flow: is defined as net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by net earnings. Free cash flow as a percentage of adjusted net earnings equals free cash flow divided by adjusted net earnings. Organic Revenue Growth: is defined as revenue growth excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. The tables included in this presentation provide reconciliations of the non-GAAP measures used in this presentation to the most directly comparable U.S. GAAP measures. - upplement for the second quarter.
22 Performance Measure Definitions Definitions of Performance Measures: Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends. Organic Bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. This metric is an important measure of performance and an indicator of revenue order trends. Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet been satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future. Book-to-Bill is a ratio of the amount of bookings received from customers during a period divided by the amount of revenue recorded during that same period. This metric is a useful indicator of demand. We use the above operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments.
