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Last updated on April 16, 2014 at 10:23 EDT

Dover Reports Fourth Quarter and Full Year 2012 Results; Reaffirms 2013 Guidance

January 24, 2013

DOWNERS GROVE, Ill., Jan. 24, 2013 /PRNewswire-FirstCall/ —

  • Reports quarterly revenue of $2.0 billion, an increase of 6% over the prior year
  • Delivers quarterly diluted earnings per share from continuing operations of $1.16, an increase of 10% over last year
  • Achieves adjusted quarterly diluted earnings per share from continuing operations of $1.09, excluding tax benefits of $0.07, up 7% from an adjusted prior year
  • Reaffirms 2013 full year revenue growth of 7% to 9% and diluted earnings per share from continuing operations in the range of $5.05 to $5.35

Dover (NYSE: DOV) announced today that for the fourth quarter ended December 31, 2012, revenue was $2.0 billion, an increase of 6% over the prior year period. The revenue increase was driven by organic growth of 2% and a 5% increase from acquisitions, offset in part by a 1% unfavorable impact from foreign exchange. Earnings from continuing operations were $208.2 million, or $1.16 diluted earnings per share (“EPS”), compared to $197.3 million, or $1.05 EPS, in the prior year period, representing increases in earnings from continuing operations and EPS of 6% and 10%, respectively. Excluding the impact of tax benefits of $0.07 EPS recognized in the current quarter and $0.03 EPS recognized in the prior year period, adjusted EPS from continuing operations for the fourth quarter of 2012 was $1.09, reflecting an increase of 7% over an adjusted EPS of $1.02 in the prior year period.

Revenue for the year ended December 31, 2012 was $8.1 billion, an increase of 10% over the prior year, reflecting organic growth of 5%, a 6% increase from acquisitions and a 1% unfavorable impact from foreign exchange. Earnings from continuing operations for the year ended December 31, 2012 were $833.1 million, or $4.53 EPS, compared to $773.2 million, or $4.09 EPS in the prior year period, representing an increase in earnings from continuing operations of 8% and an increase in EPS of 11%. Excluding the impact of tax benefits of $0.09 EPS in the current year and $0.22 EPS in the prior year, adjusted EPS from continuing operations for the year ended December 31, 2012 was $4.44, an increase of 15% over an adjusted EPS of $3.87 in the prior year.

Commenting on the fourth quarter results, Dover’s President and Chief Executive Officer, Robert A. Livingston, said, “I am pleased with our fourth quarter results as all our segments recorded organic growth, and the majority of our end-markets continued to show strength in orders, despite uncertain economic conditions. Within Communication Technologies, we saw the continuation of a strong smart phone market and we achieved improved sequential performance at Sound Solutions. Our Energy segment demonstrated its resiliency by posting modest organic growth despite a lower North American rig count. Engineered Systems continued to see a very active refrigeration and food equipment market, while Printing & Identification’s fast moving consumer goods market continued to expand. We also closed several acquisitions in the quarter, most notably Anthony, which will strengthen our refrigeration product offering and expand our markets and channels.”

“For the year, we generated nearly $1 billion in free cash flow, supported by strong cash conversion in the fourth quarter. Our solid cash flow is a key element in the continued execution of our capital allocation strategy. Specifically, we made significant internal and acquisition investments in our five key growth spaces, we returned cash in the form of expanded dividends and began execution on our $1 billion share repurchase program announced in November.”

“Looking ahead, our full year view of 2013 is unchanged from our December 10, 2012 investor day guidance. We expect full year organic growth of 3% to 5% complemented by acquisition growth of 4%, resulting in revenue growth of 7% to 9%. The benefits of leverage on volume coupled with a lower share count from our repurchase program will help us deliver solid earnings growth. Accordingly, we are reaffirming full year diluted EPS from continuing operations in the range of $5.05 – $5.35.”

Net earnings for the fourth quarter of 2012 were $159.9 million or $0.89 EPS, including a net loss from discontinued operations of $48.4 million, or $0.27 EPS, compared to net earnings of $278.3 million, or $1.49 EPS, for the same period of 2011, which included net income from discontinued operations of $81.0 million, or $0.43 EPS. As previously announced, two non-core businesses serving the electronic assembly and test markets were reclassified to discontinued operations during the fourth quarter, with the intent to divest these businesses in 2013. In connection with the plan to divest, a goodwill impairment charge of $51.9 million, net of tax, or $0.29 EPS was recognized, which is reflected within discontinued operations in the fourth quarter and full year periods. Net earnings for the year ended December 31, 2012 were $811.1 million, or $4.41 EPS, including a net loss from discontinued operations of $22.0 million, or $0.12 EPS, compared to net earnings of $895.2 million, or $4.74 EPS for the same period of 2011, which included net income from discontinued operations of $122.1 million or $0.65 EPS.

Dover will host a webcast of its fourth quarter 2012 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 24, 2013. The webcast can be accessed on the Dover website at www.dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover’s fourth quarter results and its operating segments can also be found on the Company’s website.

About Dover:
Dover is a diversified global manufacturer with annual revenues of over $8 billion. For over 50 years, Dover has been delivering outstanding products and services that reflect its market leadership and commitment to operational and technical excellence. The Company’s entrepreneurial business model encourages, promotes and fosters deep customer engagement which has led to Dover’s well-established and valued reputation for providing superior customer service and industry-leading product innovation. Dover focuses on innovative equipment and components, specialty systems and support services through its four major operating segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Headquartered in Downers Grove, Illinois, Dover employs 35,000 people worldwide. Dover is traded on the New York Stock Exchange under “DOV.” Additional information is available on our website at www.dovercorporation.com.

Forward-Looking Statement:
This press release contains “forward-looking” statements within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, operating and strategic plans, income, earnings, cash flows, changes in operations, operating improvements, industries in which Dover companies operate and the U.S. and global economies. Statements in this press release that are not historical may be indicated by words or phrases such as “anticipates,” “expects,” “believes,” “indicates,” “suggests,” “will,” “plans,” “supports,” “projects,” “should,” “would,” “could,” “hope,” “forecast” and “management is of the opinion,” use of 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, uncertainties in the credit and capital markets, interest rates, currency exchange rates, the world economy and sovereign credit, especially in Europe; political events and possible future terrorist threats that could impact countries where Dover does business or the worldwide economy; the impact of natural disasters and their effect on global supply chains and energy markets; increases in the cost of raw materials; the Company’s ability to achieve expected savings from integration, synergy and other cost-control initiatives; the ability to identify and successfully consummate value-adding acquisition opportunities; increased competition and pricing pressures in the markets served by Dover’s operating companies; the ability of Dover’s companies to expand into new geographic markets and to anticipate and meet customer demands for new products and product enhancements; the impact of loss of a single-source manufacturing facility; changes in customer demand; a downgrade in Dover’s credit ratings; the relative mix of products and services which impacts margins and operating efficiencies; short-term capacity constraints; domestic and foreign governmental and public policy changes including environmental regulations, tax policies, export subsidy programs, R&E credits and other similar programs; unforeseen developments in contingencies such as litigation; protection and validity of patent and other intellectual property rights; and the cyclical nature of some of Dover’s companies. 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 in this press release. Dover undertakes no obligation to update any forward-looking statement.

INVESTOR SUPPLEMENT – FOURTH QUARTER AND FULL YEAR 2012

DOVER CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)(in thousands, except per share data)

                                                                Three Months Ended               Years Ended December 31,
                                                          December 31,
                                                          ------------
                                                               2012                   2011      2012            2011
                                                               ----                   ----      ----            ----
    Revenue                                                        $2,013,831             $1,890,962                      $8,104,339  $7,369,154
    Cost of goods and services                            1,240,087              1,172,629           4,997,274             4,524,351
                                                          ---------              ---------           ---------             ---------
    Gross profit                                            773,744                718,333           3,107,065             2,844,803
    Selling and administrative expenses                     469,668                434,732           1,841,688             1,720,954
                                                            -------                -------           ---------             ---------
    Operating earnings                                      304,076                283,601           1,265,377             1,123,849
    Interest expense, net                                    30,996                 29,057             121,141               115,525
    Other expense (income), net                                 809                 (3,265)              6,665                (1,938)
                                                                ---                  ------              -----                ------
    Earnings before provision for income taxes and          272,271                 257,809          1,137,571             1,010,262
    discontinued operations
    Provision for income taxes                               64,047                  60,542            304,452               237,076
                                                             ------                  ------            -------               -------
    Earnings from continuing operations                     208,224                 197,267            833,119               773,186
    Earnings (loss) from discontinued operations, net (1)   (48,364)                 81,022            (22,049)              122,057
                                                            -------                  ------            -------               -------
    Net earnings                                                     $159,860               $278,289                        $811,070    $895,243
                                                                     ========               ========                        ========    ========

    Basic earnings per common share:
    Earnings from continuing operations                                 $1.17                  $1.07                           $4.59       $4.16
    Earnings (loss) from discontinued operations,             (0.27)                   0.44              (0.12)                 0.66
    net (1)
    Net earnings                                               0.90                    1.51               4.47                  4.82

    Weighted average shares outstanding                     177,257                 184,686            181,551               185,882
                                                            =======                 =======            =======               =======

    Diluted earnings per common share:
    Earnings from continuing operations                                 $1.16                  $1.05                           $4.53       $4.09
    Earnings (loss) from discontinued operations,             (0.27)                   0.43              (0.12)                 0.65
    net (1)
    Net earnings                                               0.89                    1.49               4.41                  4.74

    Weighted average shares outstanding                     179,365                 187,208            183,993               188,887
                                                            =======                 =======            =======               =======

    Dividends paid per common share                                     $0.35                 $0.315                           $1.33       $1.18
                                                                        =====                 ======                           =====       =====

(1) For the three months and year ended December 31, 2012, the loss from discontinued operations, net reflects a goodwill impairment charge of approximately $64 million ($52 million, net of tax) recognized in connection with the reclassification of Everett Charles Technologies and DEK to discontinued operations.

DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(unaudited)(in thousands)

                                                                                                      2012                                                         2011
                                                                                                      ----                                                         ----
                                          Q1           Q2      Q3      Q4   FY 2012    Q1           Q2        Q3      Q4   FY 2011
                                          ---         ---     ---      ---  -------    ---         ---       ---      ---  -------
    REVENUE
    Communication Technologies                       $357,575                $361,689             $396,470                  $400,851          $1,516,585                  $269,582               $288,843   $405,357            $396,295          $1,360,077
                                                     --------                --------             --------                  --------          ----------                  --------               --------   --------            --------          ----------

    Energy                                531,570             538,786         562,263  539,985             2,172,604                 425,424     454,327  510,608          510,390  1,900,749
                                          -------             -------         -------  -------             ---------                 -------     -------  -------          -------  ---------

    Engineered Systems
    Fluid Solutions                       180,364             211,974         218,324  206,500               817,162                 163,196     178,031  173,804          162,590    677,621
    Refrigeration &                       642,213             674,501         674,116  613,012             2,603,842                 560,453     645,573  649,768          568,844  2,424,638
    Industrial
    Eliminations                             (453)               (352)           (319)    (336)               (1,460)                   (382)       (424)    (431)            (287)    (1,524)
                                             ----                ----            ----     ----                ------                    ----        ----     ----             ----     ------
                                          822,124             886,123         892,121  819,176             3,419,544                 723,267     823,180  823,141          731,147  3,100,735
                                          -------             -------         -------  -------             ---------                 -------     -------  -------          -------  ---------

    Printing & Identification             243,570             251,875         246,945  254,141               996,531                 240,775     253,226  260,546          253,689  1,008,236
                                          -------             -------         -------  -------               -------                 -------     -------  -------          -------  ---------

    Intra-segment eliminations               (225)               (184)           (194)    (322)                 (925)                      -          18     (102)            (559)      (643)
                                             ----                ----            ----     ----                  ----                     ---         ---     ----             ----       ----

    Total consolidated revenue                     $1,954,614              $2,038,289           $2,097,605                $2,013,831          $8,104,339                $1,659,048             $1,819,594 $1,999,550          $1,890,962          $7,369,154
                                                   ==========              ==========           ==========                ==========          ==========                ==========             ========== ==========          ==========          ==========

    NET EARNINGS
    Segment Earnings:
    Communication                                     $46,556                 $50,322              $63,706                   $58,376            $218,960                   $47,325                $54,527    $53,433             $71,097            $226,382
    Technologies
    Energy                                132,115             133,936         139,038  133,561               538,650                  93,051     110,447  125,268          121,871    450,637
    Engineered                            122,092             133,808         144,245  101,807               501,952                  98,235     128,570  125,529           92,852    445,186
    Systems
    Printing & Identification              26,089              28,918          39,502   40,650               135,159                  31,985      35,294   40,843           33,439    141,561
                                           ------              ------          ------   ------               -------                  ------      ------   ------           ------    -------
    Total Segments                        326,852             346,984         386,491  334,394             1,394,721                 270,596     328,838  345,073          319,259  1,263,766
    Corporate expense / other              36,546              36,335          32,001   31,127               136,009                  36,112      35,391   34,083           32,393    137,979
    Net interest expense                   30,031              29,715          30,399   30,996               121,141                  28,319      28,093   30,056           29,057    115,525
                                           ------              ------          ------   ------               -------                  ------      ------   ------           ------    -------
    Earnings from continuing
     operations before provision
     for income taxes                     260,275             280,934         324,091  272,271             1,137,571                 206,165     265,354  280,934          257,809  1,010,262
    Provision for income taxes             73,866              75,778          90,761   64,047               304,452                  51,020      52,095   73,419           60,542    237,076
                                           ------              ------          ------   ------               -------                  ------      ------   ------           ------    -------
    Earnings from continuing
     operations                           186,409             205,156         233,330  208,224               833,119                 155,145     213,259  207,515          197,267    773,186
    Earnings (loss) from
     discontinued operations, net           9,654               8,945           7,716  (48,364)              (22,049)                 39,760      36,510  (35,235)          81,022    122,057
                                            -----               -----           -----  -------               -------                  ------      ------  -------           ------    -------
    Net earnings                                     $196,063                $214,101             $241,046                  $159,860            $811,070                  $194,905               $249,769   $172,280 $278,289            $895,243
                                                     ========                ========             ========                  ========            ========                  ========               ========   ======== ========            ========

    SEGMENT OPERATING MARGIN
    Communication                            13.0%               13.9%           16.1%    14.6%                 14.4%                   17.6%       18.9%    13.2%            17.9%      16.6%
    Technologies
    Energy                                   24.9%               24.9%           24.7%    24.7%                 24.8%                   21.9%       24.3%    24.5%            23.9%      23.7%
    Engineered                               14.9%               15.1%           16.2%    12.4%                 14.7%                   13.6%       15.6%    15.2%            12.7%      14.4%
    Systems
    Printing &                               10.7%               11.5%           16.0%    16.0%                 13.6%                   13.3%       13.9%    15.7%            13.2%      14.0%
    Identification
    Total Segment                            16.7%               17.0%           18.4%    16.6%                 17.2%                   16.3%       18.1%    17.3%            16.9%      17.1%

    DEPRECIATION AND AMORTIZATION EXPENSE
    Communication Technologies                        $31,513                 $32,828              $32,997                   $35,281            $132,619                   $18,685                $18,533    $34,360             $30,261            $101,839
    Energy                                 21,184              23,533          24,639   25,721                95,077                  18,573      18,765   19,399           21,082     77,819
    Engineered Systems                     19,582              23,913          23,060   27,066                93,621                  18,415      18,816   18,332           19,213     74,776
    Printing & Identification               8,331               8,496           8,777    7,998                33,602                   8,163       8,476    8,364            8,479     33,482
    Corporate                                 700                 765             842      359                 2,666                     586         626      636              713      2,561
                                              ---                 ---             ---      ---                 -----                     ---         ---      ---              ---      -----
                                                      $81,310                 $89,535              $90,315                   $96,425            $357,585                   $64,422                $65,216    $81,091             $79,748            $290,477
                                                      =======                 =======              =======                   =======            ========                   =======                =======    =======             =======            ========


DOVER CORPORATION
QUARTERLY SEGMENT INFORMATION
(continued)
(unaudited)(in thousands)

                                      2012                    2011
                                      ----                    ----
                                Q1              Q2     Q3           Q4    FY 2012      Q1        Q2          Q3         Q4      FY 2011
                               ---              ---    ---          ---   -------     ---        ---        ---        ---      -------
    BOOKINGS
    Communication Technologies                $356,386                    $383,135             $412,092                         $352,629                    $1,504,242                         $274,611             $309,734              $410,616   $349,579 $1,344,540
                                              --------                    --------             --------                         --------                    ----------                         --------             --------              --------   -------- ----------

    Energy                         585,775                 530,352         526,824  550,091                         2,193,042                      495,125                 472,543              498,212              519,525             1,985,405
                                   -------                 -------         -------  -------                         ---------                      -------                 -------              -------              -------             ---------

    Engineered Systems
    Fluid                          184,711                 204,139         197,767  209,872                796,489                        173,626              175,539              174,772              158,895               682,832
    Solutions
    Refrigeration                  711,911                 666,223         600,065  606,931              2,585,130                        660,449              623,929              602,488              625,840             2,512,706
    & Industrial
    Eliminations                      (408)                   (376)           (258)    (399)                (1,441)                          (733)                (884)                 179              (1,378)                (2,816)
                                      ----                    ----            ----     ----                 ------                           ----                 ----                  ---               ------                ------
                                   896,214                 869,986         797,574  816,404              3,380,178                        833,342              798,584              777,439              783,357             3,192,722
                                   -------                 -------         -------  -------              ---------                        -------              -------              -------              -------             ---------

    Printing & Identification      249,773                 251,733         244,611  252,937                999,054                        247,812              254,226              262,685              253,632             1,018,355
                                   -------                 -------         -------  -------                -------                        -------              -------              -------              -------             ---------

    Intra-segment eliminations        (609)                   (222)           (760) (1,017)                 (2,608)                       (2,736)               (3,370)             (2,453)              (3,153)               (11,712)
                                      ----                    ----            ----   ------                 ------                         ------               ------               ------               ------               -------

    Total consolidated
     bookings                               $2,087,539                  $2,034,984           $1,980,341                       $1,971,044                    $8,073,908                       $1,848,154           $1,831,717            $1,946,499 $1,902,940 $7,529,310
                                            ==========                  ==========           ==========                       ==========                    ==========                       ==========           ==========            ========== ========== ==========

    BACKLOG
    Communication Technologies                $435,912                    $457,624             $473,007                         $424,144                                  $410,843             $431,558             $483,512              $437,320
                                              --------                    --------             --------                         --------                                  --------             --------             --------              --------

    Energy                         296,360                 282,364         248,233  256,093                                      240,198           255,889                 243,401              246,351
                                   -------                 -------         -------  -------                                      -------           -------                 -------              -------

    Engineered Systems
    Fluid                          191,327                 172,300         156,191  160,890                                       57,357            54,945                  55,230               54,194
    Solutions
    Refrigeration                  598,910                 586,824         515,285  516,559                                      544,995           523,011                 469,876              528,118
    & Industrial
    Eliminations                      (132)                   (155)            (94)    (157)                                        (339)             (526)                    (94)                (177)
                                      ----                    ----             ---     ----                                         ----              ----                     ---                 ----
                                   790,105                 758,969         671,382  677,292                                      602,013           577,430                 525,012              582,135
                                   -------                 -------         -------  -------                                      -------           -------                 -------              -------

    Printing & Identification      102,117                  98,216          98,356   97,857                                      100,231           101,426                  97,405               94,557
                                   -------                  ------          ------   ------                                      -------           -------                  ------               ------

    Intra-segment eliminations        (986)                   (647)           (324)               $(590)                                     (704)              (1,177)                (890)                (193)
                                      ----                    ----            ----                -----                                      ----               ------                 ----                 ----

    Total consolidated backlog              $1,623,508                  $1,596,526           $1,490,654                       $1,454,796                                $1,352,581           $1,365,126           $1,348,440            $1,360,170
                                            ==========                  ==========           ==========                       ==========                                ==========           ==========           ==========            ==========

DOVER CORPORATION
QUARTERLY EARNINGS PER SHARE
(unaudited)(in thousands, except per share data*)

                                                                                                                         2012                                                  2011
                                                                                                                         ----                                                  ----
                                         Q1          Q2         Q3         Q4       FY 2012                  Q1         Q2      Q3     Q4  FY 2011
                                         ---        ---        ---         ---      -------                  ---       ---     ---     --- -------
    Basic earnings (loss) per common share:
    Continuing
     operations                                      $1.01                             $1.12                            $1.28                 $1.17            $4.59                   $0.83            $1.14    $1.12    $1.07    $4.16
    Discontinued
     operations                            0.05                  0.05                   0.04                  (0.27)            (0.12)                 0.21     0.20    (0.19)          0.44    0.66
    Net earnings                           1.07                  1.17                   1.33                   0.90              4.47                  1.04     1.34     0.93           1.51    4.82

    Diluted earnings (loss) per common share:
    Continuing
     operations                                      $1.00                             $1.10                            $1.27                 $1.16            $4.53                   $0.82            $1.12    $1.10    $1.05    $4.09
    Discontinued
     operations                            0.05                  0.05                   0.04                  (0.27)            (0.12)                 0.21     0.19    (0.19)          0.43    0.65
    Net earnings                           1.05                  1.15                   1.31                   0.89              4.41                  1.03     1.32     0.91           1.49    4.74

    Adjusted diluted earnings per common share (calculated below):
    Continuing
     operations                                      $1.01                             $1.10                            $1.25                 $1.09            $4.44                   $0.78            $0.99    $1.08    $1.02    $3.87

    Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows:

    Net earnings (loss):
    Continuing
     operations                                   $186,409                          $205,156                         $233,330              $208,224         $833,119                $155,145         $213,259 $207,515 $197,267 $773,186
    Discontinued
     operations                           9,654                 8,945                  7,716                (48,364)          (22,049)               39,760   36,510 (35,235)         81,022 122,057
    Net earnings                        196,063               214,101                241,046                159,860           811,070               194,905  249,769  172,280        278,289 895,243

    Average shares outstanding:
    Basic                               183,737               183,494                181,763                177,257           181,551               186,659  186,443  185,770        184,686 185,882
    Diluted                             186,706               185,780                183,932                179,365           183,993               190,090  189,705  188,436        187,208 188,887
    Note:
    Earnings from continuing operations are adjusted by discrete and other tax items to derive adjusted earnings from continuing operations and adjusted diluted earnings per common share as follows:

                                                                                                                      2012                                                                                   2011
                                                                                                                      ----                                                                                   ----
                                     Q1          Q2         Q3         Q4       FY 2012                  Q1          Q2         Q3         Q4       FY 2011
                                     ---        ---        ---         ---      -------                  ---        ---        ---         ---      -------
    Adjusted earnings from continuing operations:
    Earnings
     from
     continuing
     operations                               $186,409                          $205,156                          $233,330                          $208,224                          $833,119                    $155,145        $213,259 $207,515 $197,267 $773,186
    Gains
     (losses)
     from
     discrete
     and other
     tax items                       (1,610)                 (372)                 4,513                 13,606                16,137                             8,016                 24,983         2,777         4,967 40,743
                                     ------                  ----                  -----                 ------                ------                             -----                 ------         -----         ----- ------
    Adjusted
     earnings
     from
     continuing
     operations                               $188,019                          $205,528                          $228,817                          $194,618                          $816,982                    $147,129        $188,276 $204,738 $192,300 $732,443

    Adjusted diluted earnings per common share:
    Earnings
     from
     continuing
     operations                                  $1.00                             $1.10                             $1.27                             $1.16                             $4.53                       $0.82           $1.12    $1.10    $1.05    $4.09
    Gains
     (losses)
     from
     discrete
     and other
     tax items                        (0.01)                    -                   0.02                   0.07                  0.09                              0.04                   0.13          0.02          0.03   0.22
                                      -----                   ---                   ----                   ----                  ----                              ----                   ----          ----          ----   ----
    Adjusted
     earnings
     from
     continuing
     operations                                  $1.01                             $1.10                             $1.25                             $1.09                             $4.44                       $0.78           $0.99    $1.08    $1.02    $3.87
                                                 =====                             =====                             =====                             =====                             =====                       =====           =====    =====    =====    =====

    * Per share data may not add due to rounding.

DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)(in thousands)

                                               December 31, 2012             December 31, 2011
                                               -----------------             -----------------
    Assets:
    Cash and cash equivalents                                       $800,076                    $1,206,755
    Receivables, net of allowances                     1,225,898                      1,118,848
    Inventories, net                                     872,841                        733,807
    Deferred tax and other current assets                129,029                        188,768
    Property, plant and equipment, net                 1,167,052                        970,703
    Goodwill                                           4,094,650                      3,506,975
    Intangible assets, net                             1,645,420                      1,184,505
    Other assets                                         111,432                        103,331
    Assets of discontinued operations                    397,545                        486,860
                                                         -------                        -------
    Total assets                                                 $10,443,943                    $9,500,552
                                                                 ===========                    ==========

    Liabilities and Stockholders' Equity:
    Notes payable and current maturities of
     long-term debt                                                 $610,766                        $1,022
    Payables and accrued expenses                      1,375,862                      1,148,500
    Deferred taxes and other noncurrent
     liabilities                                       1,139,777                        958,341

    Long-term debt                                     2,189,350                      2,186,230
    Liabilities of discontinued operations               208,958                        275,904
    Stockholders' equity                               4,919,230                      4,930,555
                                                       ---------                      ---------
    Total liabilities and stockholders' equity                   $10,443,943                    $9,500,552
                                                                 ===========                    ==========

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)(in thousands)

                          Years Ended December 31,
                          ------------------------
                                 2012                    2011
                                 ----                    ----
    Operating activities:
    Net earnings                       $811,070                  $895,243
    Loss (gain) from
     discontinued
     operations, net           22,049                (122,057)
    Depreciation and
     amortization             357,585                 290,477
    Stock-based
     compensation              30,884                  25,130
    Contributions to
     employee benefit
     plans                    (48,576)                (63,567)
    Net change in assets
     and liabilities           88,148                 (76,362)
                               ------                 -------
    Net cash provided by
     operating activities
     of continuing          1,261,160                 948,864
    operations

    Investing activities:
    Additions to
     property, plant and
     equipment               (297,012)               (262,676)
    Acquisitions,
     including adjustment
     for prior year
     acquisition          (1,035,433)             (1,382,217)
    purchase price (net
     of cash and cash
     equivalents
     acquired)
    Proceeds from sale of
     short-term
     investments                    -                 124,410
    Proceeds from the
     sale of businesses             -                 516,901
    Other                     (13,443)                 (8,848)
                              -------                  ------
    Net cash used in
     investing activities
     of continuing        (1,345,888)             (1,012,430)
    operations

    Financing activities:
    Net increase in debt
     and notes payable        603,918                 371,315
    Purchase of common
     stock                   (748,955)               (242,488)
    Proceeds from
     exercise of stock
     options and SARs,
     including                 43,054                  39,826
    tax benefits
    Dividends to
     stockholders            (240,959)               (219,154)
                             --------                --------
    Net cash used in
     financing activities
     of continuing           (342,942)                (50,501)
    operations

    Net cash provided by
     discontinued
     operations                 4,879                 117,311

    Effect of exchange
     rate changes on cash      16,112                  16,150

    Net (decrease)
     increase in cash and
     cash equivalents        (406,679)                 19,394

    Cash and cash
     equivalents at
     beginning of period    1,206,755               1,187,361

    Cash and cash
     equivalents at end
     of period                         $800,076                $1,206,755

DOVER CORPORATION
QUARTERLY FREE CASH FLOW
(unaudited)(in thousands)

                                                                        2012                                                      2011
                                                                        ----                                                      ----
                  Q1         Q2      Q3      Q4  FY 2012   Q1         Q2       Q3      Q4  FY 2011
                  ---        ---    ---      --- -------   ---        ---     ---      --- -------
    Cash flow
     from
     operating
     activities            $161,327              $243,363           $285,811               $570,659          $1,261,160                $100,153            $195,250 $323,355 $330,106 $948,864
    Less:
     Additions to
     property,
     plant and
     equipment    (68,249)          (72,758)      (67,842) (88,163)          (297,012)              (49,528)    (71,106) (63,741)       (78,301) (262,676)
                  -------           -------       -------  -------           --------               -------     -------  -------        -------  --------
    Free cash
     flow                   $93,078              $170,605           $217,969               $482,496            $964,148                 $50,625            $124,144 $259,614 $251,805 $686,188
                            =======              ========           ========               ========            ========                 =======            ======== ======== ======== ========

    Free cash
     flow as a
     percentage
     of earnings
     from
     continuing
     operations      49.9%             83.2%         93.4%   231.7%             115.7%                 32.6%       58.2%   125.1%         127.6%     88.7%

    Free cash
     flow as a
     percentage
     of revenue       4.8%              8.4%         10.4%    24.0%              11.9%                  3.1%        6.8%    13.0%          13.3%      9.3%

ADDITIONAL INFORMATION

FOURTH QUARTER AND FULL YEAR 2012

Acquisitions
During the fourth quarter of 2012, the Company completed four acquisitions, three in the Engineered Systems segment and one in the Energy segment. The fourth quarter acquisitions were largely funded with commercial paper borrowings. For the full year 2012, Dover made a total of seven acquisitions for consideration totaling $1.2 billion. This included the Engineered Systems’ acquisitions of Maag Pump Systems in the first quarter and Anthony International in the fourth quarter.

Discontinued Operations
The Company did not dispose of any businesses in 2012. However, in the fourth quarter, the Company announced its intent to divest Everett Charles Technologies and DEK, two non-core businesses serving the electronic assembly and test markets. The results of operations and cash flows of these businesses have been reclassified to discontinued operations and the assets and liabilities of these businesses have been segregated within assets and liabilities of discontinued operations for all periods presented herein. In the fourth quarter of 2012, the Company recognized a goodwill impairment charge of $63.8 million ($51.9 million, net of tax) in connection with the intended divestiture. As a result, for the fourth quarter and full year periods of 2012, the Company generated net after-tax losses from discontinued operations of $0.27 diluted earnings per share (“EPS”) and $0.12 EPS, respectively, reflecting the earnings from discontinued operations, offset by the fourth quarter goodwill impairment charge.

Tax Rate
The effective tax rate on continuing operations was 23.5% for the fourth quarters of 2012 and 2011. On a full year basis, the effective tax rates on continuing operations for 2012 and 2011 were 26.8% and 23.5%, respectively. The 2012 and 2011 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 28.5% and 25.4% for 2012 for 2011, respectively, and the full year rates were 28.2% and 27.5% for 2012 and 2011, respectively. The higher rates for the quarter and full year of 2012 reflect the impact of a higher proportion of U.S. earnings, partly offset by lower effective tax rates in foreign jurisdictions.

Revenue Growth Factors

                                                2012
                                                ----
                          Q1     Q2        Q3   Q4    Full Year
                          ---   ---        ---  ---   ---------
    Organic               12.6%       6.1%       2.3%             2.1%   5.5%
    Acquisitions           5.9%       7.8%       4.8%             4.8%   5.8%
    Currency translation (0.7)%     (1.9)%     (2.2)%           (0.4)% (1.3)%
                         -----      -----      -----            -----  -----
                          17.8%      12.0%       4.9%             6.5%  10.0%
                          ====       ====        ===              ===   ====

Free Cash Flow
The following table is a reconciliation of free cash flow (a non-GAAP measure) from cash flow provided by operating activities:

                        Three Months Ended                   Years Ended December 31,
                        December 31,
                        ------------
                         2012              2011           2012               2011
                         ----              ----           ----               ----
    Free Cash
     Flow(dollars in
     thousands)
    Cash flow
     provided by
     operating
     activities                 $570,659                        $330,106                    $1,261,160  $948,864
    Less: Capital
     expenditures     (88,163)                  (78,301)                 (297,012)            (262,676)
                      -------                   -------                  --------             --------
    Free cash flow              $482,496                        $251,805                      $964,148  $686,188
                                ========                        ========                      ========  ========

    Free cash flow as
     a percentage of
     revenue             24.0%                     13.3%                     11.9%                 9.3%
                         ====                      ====                      ====                  ===

    Free cash flow as
     a percentage of
     earnings from
     continuing
     operations                                          115.7%                       88.7%
                                                         =====                        ====

The full year increase in 2012 free cash flow reflects higher earnings from continuing operations before depreciation and amortization and a $129 million positive change in working capital year-over-year, offset in part by higher capital expenditures in 2012 necessary to fund expansion in the Company’s high-growth businesses.

Share Repurchases
During the year ended December 31, 2012, the Company purchased approximately 12.3 million shares of its common stock in the open market at an average price of $60.36 per share. The repurchases through November 1 were made pursuant to the Company’s standing five-year authorization, which was renewed in May of 2012. At December 31, 2012, approximately 3.9 million shares remain authorized for repurchase under the current authorization, which expires in May of 2017. Repurchases subsequent to November 1 were made pursuant to an additional share repurchase program approved in November 2012, which authorized $1 billion for share repurchases over the next 12 to 18 months. At December 31, 2012, approximately $750 million remains available for repurchases under this program.

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

     Net
     Debt
     to
     Net
     Capitalization
     Ratio
     (in
     thousands)     December 31, 2012             December 31, 2011
     -------------- -----------------             -----------------
     Current
     maturities
     of
     long-
     term
     debt                                  $3,266                                    $1,022
     Commercial
     paper                    607,500                                         -
     Long-
     term
     debt                   2,189,350                                 2,186,230
                            ---------                                 ---------
     Total
     debt                   2,800,116                                 2,187,252
     Less:
     Cash
     and
     cash
     equivalents             (800,076)                              (1,206,755)
                             --------                                ----------
     Net
     debt                   2,000,040                                   980,497
     Add:
     Stockholders'
     equity                 4,919,230                                 4,930,555
                            ---------                                 ---------
     Net
     capitalization                    $6,919,270                                $5,911,052
                                       ==========                                ==========
     Net
     debt
     to
     net
     capitalization              28.9%                                     16.6%
                                 ====                                      ====

Non-GAAP Information:
These Investor Supplement tables contain non-GAAP measures of adjusted earnings from continuing operations used in calculating adjusted diluted earnings per common share, as management believes this information is useful to investors to better understand the company’s ongoing profitability and facilitates easier comparisons of the company’s profitability to prior and future periods and to its peers. The company has also disclosed herein a number of non-GAAP measures related to free cash flow and the ratio of net debt to net capitalization. Management believes these metrics are important measures of the company’s operating performance and liquidity. Free cash flow information provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase common stock, while the net debt to net capitalization ratio is helpful in evaluating the company’s capital structure and the amount of leverage employed.

SOURCE Dover


Source: PR Newswire