DOV
$80.22
Dover
($.70)
(.87%)
Earnings Details
4th Quarter December 2016
Thursday, January 26, 2017 6:45:00 AM
Tweet Share Watch
Summary

Dover Sees Revenue Above Estimates

Dover (DOV) reported 4th Quarter December 2016 earnings of $0.71 per share on revenue of $1.8 billion. The consensus earnings estimate was $0.84 per share on revenue of $1.7 billion. Revenue grew 4.9% on a year-over-year basis.

The company said it expects 2017 earnings of $3.40 to $3.60 per share on revenue of $7.47 billion to $7.61 billion. The current consensus earnings estimate is $3.54 per share on revenue of $7.41 billion for the year ending December 31, 2017.

Dover Corp owns and operates a portfolio of manufacturing companies providing components and equipment, specialty systems and support services for a variety of applications in the industrial products, engineered systems, fluid management.

Results
Reported Earnings
$0.71
Earnings Whisper
-
Consensus Estimate
$0.84
Reported Revenue
$1.78 Bil
Revenue Estimate
$1.70 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Dover Reports Fourth Quarter And Full Year 2016 Results

Dover (DOV) announced today that for the fourth quarter ended December 31, 2016, revenue was $1.8 billion, an increase of 5% from the prior year. The increase in the quarter was driven by acquisition growth of 11%, offset by an organic revenue decline of 2%, a 3% impact from dispositions, and an unfavorable impact from foreign exchange of 1%. Earnings from continuing operations were $161.2 million, an increase of 18% as compared to $136.6 million for the prior year period. Diluted earnings per share from continuing operations ("EPS") for the fourth quarter ended December 31, 2016, were $1.03, compared to $0.87 EPS in the prior year period, representing an increase of 18%. EPS from continuing operations for the fourth quarter of 2016 included a gain on a disposition of $0.36, a charge of $0.09 for a voluntary product recall, and $0.05 of discrete tax benefits. EPS from continuing operations for the prior year period include discrete tax benefits of $0.06 EPS. Excluding these items, adjusted EPS from continuing operations for the fourth quarter of 2016 was $0.71, a decrease of 12% from an adjusted EPS of $0.81 in the prior year period. EPS for the fourth quarter ended December 31, 2016 and 2015 include restructuring costs of $0.04 EPS and $0.08 EPS, respectively.

Revenue for the year ended December 31, 2016 was $6.8 billion, a decrease of 2% from the prior year, reflecting an organic revenue decline of 5%, a 3% impact from dispositions, and an unfavorable impact from foreign exchange of 1%, offset by acquisition growth of 7%. Earnings from continuing operations for the year ended December 31, 2016, were $508.9 million, a decrease of 15% as compared to $595.9 million for the prior year period. Diluted EPS for the year ended December 31, 2016, was $3.25, compared to $3.74 EPS in the prior year period, representing a decrease of 13%. EPS from continuing operations for the year ended December 31, 2016, includes gains on dispositions of $0.44, a charge of $0.09 for a voluntary product recall, and discrete tax benefits of $0.09. EPS from continuing operations for the year ended December 31, 2015, includes discrete tax benefits of $0.11. Excluding these items adjusted EPS from continuing operations decreased 22% to $2.82 from a comparable EPS of $3.63 in the prior year period. EPS for the years ended December 31, 2016 and 2015 also include restructuring costs of $0.18 EPS and $0.25 EPS, respectively.

Dover’s President and Chief Executive Officer, Robert A. Livingston, said, "I was pleased with our fourth quarter business activity and results. And, I was especially pleased we were able to close the Wayne transaction earlier than previously expected.

"Among the highlights in the quarter were a continued recovery in our shorter cycle drilling and artificial lift markets, along with strong results in our Printing & Identification platform. We also saw solid activity in our Bearings & Compression and Petrochemical & Polymer markets. These positive developments helped mitigate continued soft conditions in longer cycle oil & gas markets, especially within transport, and challenges in retail refrigeration.

"With regard to 2017, we confirm our guidance for full year diluted earnings per share from continuing operations to be in the range of $3.40 to $3.60. Within this guidance, revenue growth is expected to be 10% to 12%, including organic growth of 3% to 5% and acquisition growth of approximately 10%, partially offset by a 1% impact from dispositions and a 2% headwind from FX."

Net earnings for the fourth quarter ended December 31, 2016, were $161.2 million, or $1.03 EPS, compared to net earnings of $141.8 million, or $0.91 EPS, for the same period of 2015, which included earnings from discontinued operations of $5.3 million.

Net earnings for the year ended December 31, 2016, were $508.9 million, or $3.25 EPS, compared to net earnings of $869.8 million, or $5.46 EPS, for the same period of 2015, which included earnings from discontinued operations of $273.9 million, or $1.72 EPS. 2015 earnings from discontinued operations included gains of $265.6 million, or $1.67 EPS, resulting from the disposition of two businesses.

Dover will host a webcast of its fourth quarter 2016 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 26, 2017. 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 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 revenue exceeding $7 billion. We deliver innovative equipment and components, specialty systems and support services through four major operating segments: Energy, Engineered Systems, Fluids, and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of 29,000 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. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, foreign exchange, changes in operations, acquisitions, industries in which Dover businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements. Forward-looking statements may be indicated by words or phrases such as "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast", or the use of the future tense and similar words or phrases. 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, oil and natural gas demand, production growth, and prices; changes in exploration and production spending by Dover’s customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; economic conditions generally and changes in economic conditions globally and in markets served by Dover businesses, including well activity and U.S. industrials activity; Dover’s ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs as well as efforts to reduce sourcing input costs; the impact of interest rate and currency exchange rate fluctuations; the ability of Dover’s businesses to expand into new geographic markets; Dover’s ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of Dover’s businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; increased competition and pricing pressures; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; increases in the cost of raw materials; domestic and foreign governmental and public policy changes or developments, including environmental regulations, conflict minerals disclosure requirements, and tax policies; protection and validity of patent and other intellectual property rights; the impact of legal matters and legal compliance risks, including product recalls; conditions and events affecting domestic and global financial and capital markets; and a downgrade in Dover’s credit ratings which, among other matters, could make obtaining financing more difficult and costly. Dover refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as its 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 its actual results to differ materially from its current expectations and from the forward-looking statements contained herein. Dover undertakes no obligation to update any forward-looking statement, except as required by law.

INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2016
DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)
Three Months Ended December 31,
Years Ended December 31,
2016
2015
2016
2015
Revenue
$
1,777,961
$
1,694,600
$
6,794,342
$
6,956,311
Cost of goods and services
1,158,257
1,080,791
4,322,373
4,388,167
Gross profit
619,704
613,809
2,471,969
2,568,144
Selling, general, and administrative expenses
455,622
414,365
1,757,523
1,647,382
Operating earnings
164,082
199,444
714,446
920,762
Interest expense
35,515
32,520
136,401
131,676
Interest income
(2,738)
(1,271)
(6,759)
(4,419)
Other income, net
(191)
(1,295)
(7,930)
(7,105)
Gain on sale of businesses
(84,537)
--
(96,598)
--
Earnings before provision for income taxes and discontinued operations 216,033
169,490
689,332
800,610
Provision for income taxes
54,871
32,916
180,440
204,729
Earnings from continuing operations
161,162
136,574
508,892
595,881
Earnings from discontinued operations, net
--
5,251
--
273,948
Net earnings
$
161,162
$
141,825
$
508,892
$
869,829
Basic earnings per common share:
Earnings from continuing operations
$
1.04
$
0.88
$
3.28
$
3.78
Earnings from discontinued operations, net
--
0.03
--
1.74
Net earnings
1.04
0.92
3.28
5.52
Weighted average shares outstanding
155,376
154,986
155,231
157,619
Diluted earnings per common share:
Earnings from continuing operations
$
1.03
$
0.87
$
3.25
$
3.74
Earnings from discontinued operations, net
--
0.03
--
1.72
Net earnings
1.03
0.91
3.25
5.46
Weighted average shares outstanding
156,816
156,254
156,636
159,172
Dividends paid per common share
$
0.44
$
0.42
$
1.72
$
1.64
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)
2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
REVENUE
Energy
$
283,230
$
259,008
$
273,248
$
292,952
$
1,108,438
$
430,423
$
366,044
$
363,872
$
323,341
$
1,483,680
Engineered Systems
Printing & Identification
239,681
263,648
253,091
266,082
1,022,502
230,181
229,934
227,992
255,563
943,670
Industrials
337,314
328,784
317,471
360,212
1,343,781
343,015
363,157
351,404
341,667
1,399,243
576,995
592,432
570,562
626,294
2,366,283
573,196
593,091
579,396
597,230
2,342,913
Fluids
399,062
405,838
412,822
482,852
1,700,574
340,236
351,511
352,018
355,508
1,399,273
Refrigeration & Food Equipment
363,252
429,386
451,328
376,373
1,620,339
372,097
448,115
492,460
418,758
1,731,430
Intra-segment eliminations
(266)
(319)
(197)
(510)
(1,292)
(451)
(133)
(164)
(237)
(985)
Total consolidated revenue
$
1,622,273
$
1,686,345
$
1,707,763
$
1,777,961
$
6,794,342
$
1,715,501
$
1,758,628
$
1,787,582
$1,694,600
$
6,956,311
NET EARNINGS
Segment Earnings:
Energy
$
11,244
$
(75)
$
13,279
$
30,888
$
55,336
$
52,305
$
40,909
$
48,726
$
31,250
$
173,190
Engineered Systems
93,748
104,034
97,240
96,807
391,829
88,149
96,702
102,866
89,244
376,961
Fluids
46,047
54,033
66,178
34,663
200,921
54,634
70,168
74,911
62,404
262,117
Refrigeration & Food Equipment
38,161
63,230
64,111
118,126
283,628
36,150
65,732
76,665
42,752
221,299
Total segments
189,200
221,222
240,808
280,484
931,714
231,238
273,511
303,168
225,650
1,033,567
Corporate expense / other
29,862
24,566
26,638
31,674
112,740
34,526
20,382
25,881
24,911
105,700
Interest expense
33,318
33,779
33,789
35,515
136,401
33,005
33,053
33,098
32,520
131,676
Interest income
(1,604)
(1,622)
(795)
(2,738)
(6,759)
(968)
(1,065)
(1,115)
(1,271)
(4,419)
Earnings from continuing operations before provision for income taxes 127,624
164,499
181,176
216,033
689,332
164,675
221,141
245,304
169,490
800,610
Provision for income taxes
28,268
46,209
51,092
54,871
180,440
47,485
65,507
58,821
32,916
204,729
Earnings from continuing operations
99,356
118,290
130,084
161,162
508,892
117,190
155,634
186,483
136,574
595,881
Earnings (loss) from discontinued operations, net
--
--
--
--
--
92,320
176,762
(385)
5,251
273,948
Net earnings
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
$
209,510
$
332,396
$
186,098
$ 141,825
$
869,829
SEGMENT OPERATING MARGIN
Energy
4.0
% --
% 4.9
% 10.5
% 5.0
%
12.2
% 11.2
% 13.4
% 9.7
% 11.7
%
Engineered Systems
16.2
% 17.6
% 17.0
% 15.5
% 16.6
%
15.4
% 16.3
% 17.8
% 14.9
% 16.1
%
Fluids
11.5
% 13.3
% 16.0
% 7.2
% 11.8
%
16.1
% 20.0
% 21.3
% 17.6
% 18.7
%
Refrigeration & Food Equipment
10.5
% 14.7
% 14.2
% 31.4
% 17.5
%
9.7
% 14.7
% 15.6
% 10.2
% 12.8
%
Total segment operating margin
11.7
% 13.1
% 14.1
% 15.8
% 13.7
%
13.5
% 15.6
% 17.0
% 13.3
% 14.9
%
DEPRECIATION AND AMORTIZATION EXPENSE
Energy
$
34,160
$
33,289
$
32,605
$
31,366
$
131,420
$
34,427
$
32,740
$
31,858
$
42,754
$
141,779
Engineered Systems
16,036
16,075
16,238
25,597
73,946
14,526
14,392
14,503
16,493
59,914
Fluids
20,511
20,981
20,833
22,899
85,224
13,848
13,648
13,367
15,215
56,078
Refrigeration & Food Equipment
16,728
16,881
16,146
15,263
65,018
16,458
16,406
16,609
16,601
66,074
Corporate
1,169
868
901
2,193
5,131
923
841
837
643
3,244
Total depreciation and amortization expense
$
88,604
$
88,094
$
86,723
$
97,318
$
360,739
$
80,182
$
78,027
$
77,174
$
91,706
$
327,089
DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)
2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
BOOKINGS
Energy
$
273,445
$
246,021
$
270,685
$
299,771
$
1,089,922
$
416,628
$
345,079
$
351,557
$
315,996
$
1,429,260
Engineered Systems
Printing & Identification
242,569
266,490
248,443
268,951
1,026,453
235,617
224,203
226,756
250,639
937,215
Industrials
329,957
304,345
331,435
374,073
1,339,810
337,070
336,173
338,744
357,451
1,369,438
572,526
570,835
579,878
643,024
2,366,263
572,687
560,376
565,500
608,090
2,306,653
Fluids
418,345
413,767
413,535
457,283
1,702,930
339,310
333,695
357,032
321,154
1,351,191
Refrigeration & Food Equipment 411,367
468,661
429,134
336,645
1,645,807
419,659
486,793
430,681
379,967
1,717,100
Intra-segment eliminations
(90)
(944)
(245)
(308)
(1,587)
(628)
(417)
(385)
(486)
(1,916)
Total consolidated bookings
$
1,675,593
$
1,698,340
$
1,692,987
$
1,736,415
$
6,803,335
$
1,747,656
$
1,725,526
$
1,704,385
$
1,624,721
$
6,802,288
BACKLOG
Energy
$
144,828
$
129,873
$
126,519
$
134,181
$
212,060
$
194,819
$
156,631
$
155,586
Engineered Systems
Printing & Identification
102,640
104,509
101,190
98,924
108,151
103,403
100,476
98,288
Industrials
235,384
210,646
224,892
252,780
276,598
248,592
236,298
250,725
338,024
315,155
326,082
351,704
384,749
351,995
336,774
349,013
Fluids
286,457
315,786
318,246
331,238
259,504
240,389
236,608
243,459
Refrigeration & Food Equipment 303,479
332,312
309,462
258,329
337,084
373,193
307,351
247,352
Intra-segment eliminations
(36)
(265)
(252)
(102)
(595)
(354)
(598)
(808)
Total consolidated backlog
$
1,072,752
$
1,092,861
$
1,080,057
$
1,075,350
$
1,192,802
$
1,160,042
$
1,036,766
$
994,602
DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)
Earnings Per Share
2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
Basic earnings (loss) per common share:
Continuing operations
$
0.64
$
0.76
$
0.84
$
1.04
$
3.28
$
0.72
$
0.98
$
1.20
$
0.88
$
3.78
Discontinued operations
--
--
--
--
--
0.57
1.11
--
0.03
1.74
Net earnings
$
0.64
$
0.76
$
0.84
$
1.04
$
3.28
$
1.30
$
2.10
$
1.20
$
0.92
$
5.52
Diluted earnings (loss) per common share:
Continuing operations
$
0.64
$
0.76
$
0.83
$
1.03
$
3.25
$
0.72
$
0.97
$
1.19
$
0.87
$
3.74
Discontinued operations
--
--
--
--
--
0.57
1.10
--
0.03
1.72
Net earnings
$
0.64
$
0.76
$
0.83
$
1.03
$
3.25
$
1.28
$
2.07
$
1.19
$
0.91
$
5.46
Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:
Net earnings (loss):
Continuing operations
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
$
117,190
$
155,634
$
186,483
$
136,574
$
595,881
Discontinued operations
--
--
--
--
--
92,320
176,762
(385)
5,251
273,948
Net earnings
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
$
209,510
$
332,396
$
186,098
$
141,825
$
869,829
Average shares outstanding:
Basic
155,064
155,180
155,300
155,376
155,231
161,650
158,640
155,300
154,986
157,619
Diluted
156,161
156,595
156,798
156,816
156,636
163,323
160,398
156,560
156,254
159,172
Adjusted Earnings Per Share (Non-GAAP)
Earnings from continuing operations are adjusted by gains (losses) from discrete and other tax items, gain on disposition of businesses, and a product recall charge to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:
2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
Adjusted earnings from continuing operations:
Earnings from continuing operations
$
99,356
$
118,290
$
130,084
$
161,162
$
508,892
$
117,190
$
155,634
$
186,483
$
136,574
$
595,881
Gains (losses) from discrete and other tax items 7,348
(1,221)
(304)
7,752
13,575
--
--
8,131
9,382
17,513
Gain on dispositions, net of tax
11,228
--
--
56,975
68,203
--
--
--
--
--
Product recall charge, net of tax
--
--
--
(14,237)
(14,237)
--
--
--
--
--
Adjusted earnings from continuing operations
$
80,780
$
119,511
$
130,388
$
110,672
$
441,351
$
117,190
$
155,634
$
178,352
$
127,192
$
578,368
Adjusted diluted earnings per common share:
Earnings from continuing operations
$
0.64
$
0.76
$
0.83
$
1.03
$
3.25
$
0.72
$
0.97
$
1.19
$
0.87
$
3.74
Gains (losses) from discrete and other tax items 0.05
(0.01)
--
0.05
0.09
--
--
0.05
0.06
0.11
Gain on dispositions, net of tax
0.07
--
--
0.36
0.44
--
--
--
--
--
Product recall charge, net of tax
--
--
--
(0.09)
(0.09)
--
--
--
--
--
Adjusted earnings from continuing operations
$
0.52
$
0.76
$
0.83
$
0.71
$
2.82
$
0.72
$
0.97
$
1.14
$
0.81
$
3.63
* Per share data may not add due to rounding.
DOVER CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)(in thousands)
December 31, 2016
December 31, 2015
Assets:
Cash and cash equivalents
$
349,146
$
362,185
Receivables, net of allowances
1,265,201
1,120,490
Inventories, net
870,487
802,895
Prepaid and other current assets
104,357
133,440
Property, plant and equipment, net
945,670
854,269
Goodwill
4,562,677
3,737,389
Intangible assets, net
1,802,923
1,413,223
Other assets and deferred charges
215,530
182,185
Total assets
$
10,115,991
$
8,606,076
Liabilities and Stockholders’ Equity:
Notes payable and current maturities of long-term debt $
414,550
$
151,122
Payables and accrued expenses
1,525,768
1,216,060
Deferred taxes and other non-current liabilities
1,169,290
990,664
Long-term debt
3,206,637
2,603,655
Stockholders’ equity
3,799,746
3,644,575
Total liabilities and stockholders’ equity
$
10,115,991
$
8,606,076
DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)(in thousands)
Years Ended December 31,
2016
2015
Operating activities:
Net earnings
$
508,892
$
869,829
Earnings from discontinued operations, net
--
(273,948)
Depreciation and amortization
360,739
327,089
Stock-based compensation
21,015
30,697
Contributions to employee benefit plans
(25,691)
(21,942)
Gain on sale of businesses
(96,598)
--
Net change in assets and liabilities
93,618
17,334
Net cash provided by operating activities of continuing operations
861,975
949,059
Investing activities:
Additions to property, plant and equipment
(165,205)
(154,251)
Acquisitions (net of cash and cash equivalents acquired)
(1,561,737)
(567,843)
Proceeds from the sale of property, plant and equipment
17,749
14,604
Proceeds from the sale of businesses
206,407
689,314
Settlement of net investment hedge
--
(17,752)
Other
(1,057)
1,350
Net cash used in investing activities of continuing operations
(1,503,843)
(34,578)
Financing activities:
Change in commercial paper and notes payable, net
254,834
(327,000)
Net increase in debt
654,382
94,252
Dividends to stockholders
(268,339)
(257,969)
Purchase of common stock
--
(600,164)
Net proceeds from exercise of share-based awards
(7,269)
(1,005)
Net cash provided by (used in) financing activities of continuing operations 633,608
(1,091,886)
Net cash used in discontinued operations
--
(115,930)
Effect of exchange rate changes on cash
(4,779)
(26,061)
Net decrease in cash and cash equivalents
(13,039)
(319,396)
Cash and cash equivalents at beginning of period
362,185
681,581
Cash and cash equivalents at end of period
$
349,146
$
362,185

ADDITIONAL INFORMATION FOURTH QUARTER AND FULL YEAR 2016 (Amounts in thousands except share data and where otherwise indicated)

Acquisitions

During the fourth quarter of 2016, the Company completed the acquisitions of Ravaglioli S.p.A. Group, a provider of automotive service equipment, and Wayne Fueling Systems Ltd., a provider of fuel dispensing, payment, systems and aftermarket services for retail and commercial fuel stations. These acquisitions were acquired to complement and expand upon existing operations within the Engineered Systems and Fluids segments, respectively. For the full year 2016, Dover made a total of six acquisitions for a net cash consideration totaling $1,561.7 million.

Disposed Businesses

For the full year 2016, the Company completed the sale of Texas Hydraulics, a custom manufacturer of fluid power components, during the first quarter of 2016 as well as Tipper Tie, a global supplier of processing and clip packaging machines, during the fourth quarter of 2016. These disposals did not represent strategic shifts in operations and, therefore, did not qualify for presentation as a discontinued operation. Upon disposal of these businesses, the Company recognized total proceeds of $47.3 million and $158.9 million, which resulted in an after-tax gain on sale of $11.2 million and $57.0 million, respectively.

Restructuring

During the quarter, the Company took actions to adjust our costs and streamline our businesses, resulting in $8.8 million, or $0.04 EPS, of restructuring charges. These charges were incurred primarily within our Fluids segment with costs incurred of $7.8 million. For full year, restructuring costs totaled $40.2 million, or $0.18 EPS, of which primarily $18.5 million was incurred in Energy and $16.9 million in Fluids.

Tax Rate

The effective tax rate on continuing operations was 25.4% and 19.4% for the fourth quarters of 2016 and 2015, respectively. On a full year basis, the effective tax rates on continuing operations for 2016 and 2015 were 26.2% and 25.6%, respectively. The 2016 and 2015 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 29.0% and 25.0% for 2016 and 2015, respectively, and the full year rates were 28.1% and 27.8% for 2016 and 2015, respectively. The increase in the effective tax rate year over year is principally due to adjustments of the tax accounts to the U.S. tax return filed.

Capitalization

The following table provides a reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:

Net Debt to Net Capitalization Ratio (Non-GAAP)
December 31, 2016
December 31, 2015
Current maturities of long-term debt
$
6,950
$
122
Commercial paper
407,600
151,000
Notes payable and current maturities of long-term debt
414,550
151,122
Long-term debt
3,206,637
2,603,655
Total debt
3,621,187
2,754,777
Less: Cash and cash equivalents
(349,146)
(362,185)
Net debt
3,272,041
2,392,592
Add: Stockholders’ equity
3,799,746
3,644,575
Net capitalization
$
7,071,787
$
6,037,167
Net debt to net capitalization
46.3
%
39.6
%

Quarterly Cash Flow

2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
Net Cash Flows Provided By (Used In):
Operating activities
$
133,413
$
207,868
$
231,665
$
289,029
$
861,975
$
131,332
$
218,911
$
282,213
$
316,603
$
949,059
Investing activities
(425,857)
(69,415)
(66,110)
(942,461)
(1,503,843)
156,585
457,875
(33,454)
(615,584)
(34,578)
Financing activities
178,507
(127,678)
98,491
484,288
633,608
(416,603)
(608,329)
(86,033)
19,079
(1,091,886)

Quarterly Free Cash Flow (Non-GAAP)

2016
2015
Q1
Q2
Q3
Q4
FY 2016
Q1
Q2
Q3
Q4
FY 2015
Cash flow from operating activities
$
133,413
$
207,868
$
231,665
$
289,029
$
861,975
$
131,332
$
218,911
$
282,213
$
316,603
$
949,059
Less: Capital expenditures
(37,230)
(35,422)
(43,116)
(49,437)
(165,205)
(27,956)
(43,807)
(39,516)
(42,972)
(154,251)
Free cash flow
$
96,183
$
172,446
$
188,549
$
239,592
$
696,770
$
103,376
$
175,104
$
242,697
$
273,631
$
794,808
Free cash flow as a percentage of earnings from continuing operations 96.8
% 145.8
% 144.9
% 148.7
% 136.9
%
88.2
% 112.5
% 130.1
% 200.4
% 133.4
%
Free cash flow as a percentage of revenue
5.9
% 10.2
% 11.0
% 13.5
% 10.3
%
6.0
% 10.0
% 13.6
% 16.1
% 11.4
%

Revenue Growth Factors

2016
Q1
Q2
Q3
Q4
Full Year
Organic
(7) %
(7) %
(7) %
(2) %
(5)
%
Acquisitions
6
%
6
%
6
%
11
%
7
%
Dispositions
(3) %
(3) %
(3) %
(3) %
(3)
%
Currency translation (1) %
--
%
(1) %
(1) %
(1)
%
(5) %
(4) %
(5) %
5
%
(2)
%

Non-GAAP Disclosures

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 earnings from continuing operations, adjusted diluted earnings per common share, net debt, net capitalization, net debt to net capitalization ratio, free cash flow, organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for earnings from continuing operations, diluted earnings per common share, debt or equity, 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 earnings from continuing operations represents earnings from continuing operations adjusted for gains or losses from discrete and other tax items, gain on disposition of businesses, and a product recall charge. Adjusted diluted earnings per common share represents adjusted earnings from continuing operations divided by average diluted shares. 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. Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders’ equity. Management believes the net debt to net capitalization ratio is useful to assess our overall financial leverage and capacity. Free cash flow represents net cash provided by operating activities minus capital expenditures. Management believes that free cash flow is an important measure 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 performance and trends between periods.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dover-reports-fourth-quarter-and-full-year-2016-results-300397177.html

SOURCE Dover Corporation

https://rt.prnewswire.com/rt.gif?NewsItemId=NY97358&Transmission_Id=201701260645PR_NEWS_USPR_____NY97358&DateId=20170126