DOWNERS GROVE, Ill., Jan. 25, 2012 /PRNewswire-FirstCall/ -- Dover Corporation (NYSE: DOV) announced today that for the fourth quarter ended December 31, 2011, revenue was $2.0 billion, an increase of 15% over the prior-year period. The revenue increase was driven by organic growth of 6% and a 9% increase from acquisitions. Earnings from continuing operations for the fourth quarter of 2011 were $208.9 million, or diluted earnings per share ("EPS") of $1.12, compared to $184.9 million, or $0.97 EPS, in the prior-year period, representing increases of 13% and 15%, respectively. Excluding the impact of tax benefits of $0.05 EPS recognized in the current quarter and $0.07 EPS recognized in the prior-year period, adjusted EPS from continuing operations for the fourth quarter of 2011 was $1.07, reflecting an increase of 19% over an adjusted EPS of $0.90 in the prior-year period.
Revenue for the year ended December 31, 2011 was $8.0 billion, an increase of 20% over the prior year, reflecting organic growth of 11%, a 7% increase from acquisitions and a 2% impact from foreign exchange. Earnings from continuing operations for the year ended December 31, 2011 were $846.4 million, or $4.48 EPS, compared to $690.8 million, or $3.65 EPS in the prior year, representing a 23% increase in both earnings and EPS. Excluding the impact of tax benefits of $0.22 EPS in the current year and $0.27 EPS in the prior year, adjusted EPS from continuing operations for the year ended December 31, 2011 was $4.26, an increase of 26% over an adjusted EPS of $3.38 in the prior year.
Commenting on the fourth quarter results, Dover's President and Chief Executive Officer, Robert A. Livingston, said, "Capped off by a solid fourth quarter, Dover delivered a record setting 2011 in terms of revenue, earnings, EPS and bookings. Organic revenue growth in the fourth quarter of 6% was driven by broad-based strength in energy, handsets, fluids, and industrial end-markets. Our segment margin was 16.5%, where solid performances in our Energy, Communication Technologies and Engineered Systems segments partially offset weakness in Printing & Identification and acquisition-related costs. The majority of our businesses continued to book well as we ended the year with a seasonally normal book-to-bill of 1.00."
"In addition to our strong financial results, we accomplished several important strategic initiatives in 2011. Importantly, we realigned our businesses into a new segment structure to more closely match our targeted growth markets. We also deployed $1.4 billion in 2011 on acquisitions and divested three businesses consistent with our strategy of focusing on our growth spaces. Lastly, we generated nearly $800 million in free cash flow, which enabled us to aggressively invest in higher growth economies and innovation, and to continue our long tradition of raising our annual dividend, now standing at 56 consecutive years."
"Looking forward, we expect full year 2012 revenue growth of 7% - 10%, comprising organic revenue growth of 4% - 7%, plus growth from completed acquisitions of 3%. Based on this revenue assumption, we expect full-year diluted EPS from continuing operations to be in the range of $4.70 - $5.00."
Net earnings for the fourth quarter of 2011 were $278.3 million, or $1.49 EPS, including net income from discontinued operations of $69.4 million, or $0.37 EPS (inclusive of a $0.34 EPS gain on the sale of a business), compared to net earnings of $198.3 million, or $1.04 EPS, for the same period of 2010, which included net income from discontinued operations of $13.4 million, or $0.07 EPS. Net earnings for the year ended December 31, 2011 were $895.2 million, or $4.74 EPS, including net income from discontinued operations of $48.9 million, or $0.26 EPS (inclusive of a $0.02 EPS net loss, primarily reflecting the sale of three businesses), compared to net earnings of $700.1 million, or $3.70 EPS for the year ended December 31, 2010, which included net income from discontinued operations of $9.4 million, or $0.05 EPS.
Dover will host a webcast of its fourth quarter 2011 conference call at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Wednesday, January 25, 2012. The webcast can be accessed at the Dover Corporation 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 and full year 2011 results and its operating companies can also be found on the company's website.
About Dover:
Dover Corporation is a multi-billion dollar diversified global manufacturer. For over 50 years, Dover has been providing its customers with outstanding products and services that reflect the company's commitment to operational excellence, innovation and market leadership. The company focuses on innovative equipment and components, specialty systems and support services through its four segments: Communication Technologies, Energy, Engineered Systems and Printing & Identification. Dover employs over 33,000 people worldwide. The company is headquartered in Downers Grove, Illinois. Additional information is available 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, 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, the state of the worldwide economy and sovereign credit, especially in Europe; political events that could impact 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; current economic conditions and uncertainties in the credit and capital markets; a downgrade in Dover's credit ratings; international economic conditions including interest rate and currency exchange rate fluctuations; 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 and tax policies (including domestic and international 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; the cyclical nature of some of Dover's companies; domestic housing industry weakness; instability in countries where Dover conducts business; and possible future terrorist threats and their effect on the worldwide economy. Dover Corporation 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 Corporation undertakes no obligation to update any forward-looking statement.
INVESTOR SUPPLEMENT - FOURTH QUARTER 2011 ----------------------------------------- DOVER CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)(in thousands, except per share data) Three Months Ended December 31, Year Ended December 31, ------------------- ----------------------- 2011 2010 2011 2010 ---- ---- ---- ---- Revenue $2,004,486 $1,737,436 $7,950,140 $6,640,191 Cost of goods and services 1,247,091 1,050,664 4,898,716 4,023,586 --------- --------- --------- --------- Gross profit 757,395 686,772 3,051,424 2,616,605 Selling and administrative expenses 462,143 427,198 1,840,609 1,607,327 ------- ------- --------- --------- Operating earnings 295,252 259,574 1,210,815 1,009,278 Interest expense, net 29,060 25,930 115,596 106,422 Other (income) expense, net (2,658) (237) 55 3,652 ------ ---- --- ----- Earnings before provision for income taxes 268,850 233,881 1,095,164 899,204 and discontinued operations Provision for income taxes 59,912 48,975 248,799 208,453 ------ ------ ------- ------- Earnings from continuing operations 208,938 184,906 846,365 690,751 Earnings from discontinued operations, net 69,351 13,442 48,878 9,353 ------ ------ ------ ----- Net earnings $278,289 $198,348 $895,243 $700,104 ======== ======== ======== ======== Basic earnings per common share: Earnings from continuing operations $1.13 $0.99 $4.55 $3.70 Earnings from discontinued operations, net 0.38 0.07 0.26 0.05 Net earnings 1.51 1.06 4.82 3.75 Weighted average shares outstanding 184,686 186,923 185,882 186,897 ======= ======= ======= ======= Diluted earnings per common share: Earnings from continuing operations $1.12 $0.97 $4.48 $3.65 Earnings from discontinued operations, net 0.37 0.07 0.26 0.05 Net earnings 1.49 1.04 4.74 3.70 Weighted average shares outstanding 187,208 189,863 188,887 189,170 ======= ======= ======= ======= Dividends paid per common share $0.315 $0.275 $1.18 $1.07 ====== ====== ===== =====
DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands) 2011 2010 ---- ---- Q1 Q2 Q3 Q4 FY 2011 Q1 Q2 Q3 Q4 FY 2010 --- --- --- --- ------- --- --- --- --- ------- REVENUE ------- Communication Technologies $269,582 $288,843 $405,357 $396,295 $1,360,077 $246,531 $269,107 $280,031 $280,343 $1,076,012 -------- -------- -------- -------- ---------- -------- -------- -------- -------- ---------- Energy 425,424 454,327 510,608 510,390 1,900,749 296,792 319,305 326,149 361,261 1,303,507 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Engineered Systems Fluid Solutions 163,196 178,031 173,804 162,590 677,621 134,542 139,218 150,302 143,852 567,914 Refrigeration & Industrial 560,453 645,573 649,768 568,844 2,424,638 487,588 581,187 620,030 531,039 2,219,844 Eliminations (382) (424) (431) (287) (1,524) (252) (365) (354) (345) (1,316) ---- ---- ---- ---- ------ ---- ---- ---- ---- 723,267 823,180 823,141 731,147 3,100,735 621,878 720,040 769,978 674,546 2,786,442 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Printing & Identification 394,627 429,497 400,515 368,325 1,592,964 316,472 356,732 381,636 421,990 1,476,830 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Intra- segment eliminations (822) (877) (1,015) (1,671) (4,385) (618) (737) (541) (704) (2,600) ---- ---- ------ ------ ------ ---- ---- ---- ---- ------ Total consolidated revenue $1,812,078 $1,994,970 $2,138,606 $2,004,486 $7,950,140 $1,481,055 $1,664,447 $1,757,253 $1,737,436 $6,640,191 ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== NET EARNINGS ------------ Segment Earnings: Communication Technologies $47,325 $54,527 $53,433 $71,097 $226,382 $46,125 $52,593 $55,852 $50,645 $205,215 Energy 93,051 110,447 125,268 121,871 450,637 68,277 81,552 78,959 87,325 316,113 Engineered Systems 98,235 128,570 125,529 92,852 445,186 81,038 106,590 115,878 79,138 382,644 Printing & Identification 54,637 67,967 59,447 44,483 226,534 42,043 54,759 62,471 78,095 237,368 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Total Segments 293,248 361,511 363,677 330,303 1,348,739 237,483 295,494 313,160 295,203 1,141,340 Corporate expense / other 36,112 35,391 34,083 32,393 137,979 33,325 32,444 34,553 35,392 135,714 Net interest expense 28,318 28,157 30,061 29,060 115,596 27,188 26,955 26,349 25,930 106,422 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Earnings from continuing operations before provision for income taxes 228,818 297,963 299,533 268,850 1,095,164 176,970 236,095 252,258 233,881 899,204 Provision for income taxes 54,027 58,765 76,095 59,912 248,799 54,682 68,869 35,927 48,975 208,453 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Earnings from continuing operations 174,791 239,198 223,438 208,938 846,365 122,288 167,226 216,331 184,906 690,751 Earnings (loss) from discontinued operations, net 20,114 10,571 (51,158) 69,351 48,878 (14,161) 2,644 7,428 13,442 9,353 ------ ------ ------- ------ ------ ------- ----- ----- ------ ----- Net earnings $194,905 $249,769 $172,280 $278,289 $895,243 $108,127 $169,870 $223,759 $198,348 $700,104 ======== ======== ======== ======== ======== ======== ======== ======== ======== ======== SEGMENT OPERATING MARGIN ----------------- Communication Technologies 17.6% 18.9% 13.2% 17.9% 16.6% 18.7% 19.5% 19.9% 18.1% 19.1% Energy 21.9% 24.3% 24.5% 23.9% 23.7% 23.0% 25.5% 24.2% 24.2% 24.3% Engineered Systems 13.6% 15.6% 15.2% 12.7% 14.4% 13.0% 14.8% 15.0% 11.7% 13.7% Printing & Identification 13.8% 15.8% 14.8% 12.1% 14.2% 13.3% 15.4% 16.4% 18.5% 16.1% Total Segment 16.2% 18.1% 17.0% 16.5% 17.0% 16.0% 17.8% 17.8% 17.0% 17.2% DEPRECIATION AND AMORTIZATION EXPENSE ------------------------------------- Communication Technologies $18,685 $18,533 $34,360 $30,261 $101,839 $17,345 $17,494 $18,081 $19,342 $72,262 Energy 18,573 18,765 19,399 21,082 77,819 11,511 12,349 11,942 13,040 48,842 Engineered Systems 18,415 18,816 18,332 19,213 74,776 18,194 17,775 18,434 18,123 72,526 Printing & Identification 11,372 11,685 11,548 11,543 46,148 11,857 11,556 11,322 11,567 46,302 Corporate 586 626 636 713 2,561 369 336 658 674 2,037 --- --- --- --- ----- --- --- --- --- ----- $67,631 $68,425 $84,275 $82,812 $303,143 $59,276 $59,510 $60,437 $62,746 $241,969 ======= ======= ======= ======= ======== ======= ======= ======= ======= ========
DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (continued) (unaudited)(in thousands) 2011 2010 ---- ---- Q1 Q2 Q3 Q4 FY 2011 Q1 Q2 Q3 Q4 FY 2010 --- --- --- --- ------- --- --- --- --- ------- BOOKINGS -------- Communication Technologies $274,611 $309,734 $410,616 $349,579 $1,344,540 $257,767 $304,026 $278,686 $287,786 $1,128,265 -------- -------- -------- -------- ---------- -------- -------- -------- -------- ---------- Energy 495,125 472,543 498,212 519,525 1,985,405 300,441 326,217 326,080 366,277 1,319,015 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Engineered Systems Fluids 173,626 175,539 174,772 158,895 682,832 136,459 147,215 145,823 144,389 573,886 Refrigeration & Industrial 660,449 623,929 602,488 625,840 2,512,706 596,293 605,034 527,269 563,300 2,291,896 Eliminations (733) (884) 179 (1,378) (2,816) (486) (638) (640) (648) (2,412) ---- ---- --- ------ ------ ---- ---- ---- ---- 833,342 798,584 777,439 783,357 3,192,722 732,266 751,611 672,452 707,041 2,863,370 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Printing & Identification 438,526 386,259 384,085 353,849 1,562,719 370,598 404,088 399,788 398,570 1,573,044 ------- ------- ------- ------- --------- ------- ------- ------- ------- --------- Intra-segment eliminations (2,736) (3,370) (2,452) (3,153) (11,711) (1,641) (2,317) (2,396) (2,689) (9,043) ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Total consolidated bookings $2,038,868 $1,963,750 $2,067,900 $2,003,157 $8,073,675 $1,659,431 $1,783,625 $1,674,610 $1,756,985 $6,874,651 ========== ========== ========== ========== ========== ========== ========== ========== ========== ========== BACKLOG ------- Communication Technologies $410,843 $431,558 $483,512 $437,320 $347,980 $381,828 $396,581 $404,374 -------- -------- -------- -------- -------- -------- -------- -------- Energy 240,198 255,889 243,401 246,351 123,456 128,058 136,374 152,183 ------- ------- ------- ------- ------- ------- ------- ------- Engineered Systems Fluids 57,357 54,945 55,230 54,194 42,882 50,346 46,556 47,123 Refrigeration & Industrial 544,995 523,011 469,876 528,118 480,604 502,479 413,318 446,267 Eliminations (339) (526) (94) (177) (189) (324) (267) (315) ---- ---- --- ---- ---- ---- ---- ---- 602,013 577,430 525,012 582,135 523,297 552,501 459,607 493,075 ------- ------- ------- ------- ------- ------- ------- ------- Printing & Identification 262,629 220,619 197,792 180,871 166,439 209,178 235,360 213,589 ------- ------- ------- ------- ------- ------- ------- ------- Intra-segment eliminations (704) (1,178) (891) (193) (362) (569) (483) (729) ---- ------ ---- ---- ---- ---- ---- ---- Total consolidated backlog $1,514,979 $1,484,318 $1,448,826 $1,446,484 $1,160,810 $1,270,996 $1,227,439 $1,262,492 ========== ========== ========== ========== ========== ========== ========== ==========
DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data) 2011 2010 ---- ---- FY Q1 Q2 Q3 Q4 FY 2011 Q1 Q2 Q3 Q4 2010 --- --- --- --- ------- --- --- --- --- ----- Basic earnings (loss) per common share: Continuing operations $0.94 $1.28 $1.20 $1.13 $4.55 $0.65 $0.90 $1.16 $0.99 $3.70 Discontinued operations 0.11 0.06 (0.28) 0.38 0.26 (0.08) 0.01 0.04 0.07 0.05 Net earnings 1.04 1.34 0.93 1.51 4.82 0.58 0.91 1.20 1.06 3.75 Diluted earnings (loss) per common share: Continuing operations $0.92 $1.26 $1.19 $1.12 $4.48 $0.65 $0.89 $1.15 $0.97 $3.65 Discontinued operations 0.11 0.06 (0.27) 0.37 0.26 (0.08) 0.01 0.04 0.07 0.05 Net earnings 1.03 1.32 0.91 1.49 4.74 0.58 0.90 1.19 1.04 3.70 Adjusted diluted earnings per common share (calculated below): Continuing operations $0.88 $1.14 $1.18 $1.07 $4.26 $0.65 $0.89 $0.95 $0.90 $3.38 Net earnings (loss) and average shares used in calculated earnings (loss) per share amounts are as follows: Net earnings (loss) : Continuing operations $174,791 $239,198 $223,438 $208,938 $846,365 $122,288 $167,226 $216,331 $184,906 $690,751 Discontinued operations 20,114 10,571 (51,158) 69,351 48,878 (14,161) 2,644 7,428 13,442 9,353 Net earnings 194,905 249,769 172,280 278,289 895,243 108,127 169,870 223,759 198,348 700,104 Average shares outstanding: Basic 186,659 186,443 185,770 184,686 185,882 187,093 186,823 186,721 186,923 186,897 Diluted 190,090 189,705 188,436 187,208 188,887 187,886 188,720 188,565 189,863 189,170 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: 2011 2010 ---- ---- FY Q1 Q2 Q3 Q4 FY 2011 Q1 Q2 Q3 Q4 2010 --- --- --- --- ------- --- --- --- --- ----- Adjusted earnings from continuing operations: Earnings from continuing operations $174,791 $239,198 $223,438 $208,938 $846,365 $122,288 $167,226 $216,331 $184,906 $690,751 Gains from discrete and other tax items 8,016 22,338 2,390 8,590 41,334 - - 36,956 13,296 50,252 ----- ------ ----- ----- ------ --- --- ------ ------ ------ Adjusted earnings from continuing operations $166,775 $216,860 $221,048 $200,348 $805,031 $122,288 $167,226 $179,375 $171,610 $640,499 Adjusted diluted earnings per common share: Earnings from continuing operations $0.92 $1.26 $1.19 $1.12 $4.48 $0.65 $0.89 $1.15 $0.97 $3.65 Gains from discrete and other tax items 0.04 0.12 0.01 0.05 0.22 - - 0.20 0.07 0.27 Adjusted earnings from continuing operations $0.88 $1.14 $1.18 $1.07 $4.26 $0.65 $0.89 $0.95 $0.90 $3.38 ===== ===== ===== ===== ===== ===== ===== ===== ===== =====
DOVER CORPORATION QUARTERLY FREE CASH FLOW (unaudited)(in thousands) 2011 2010 ---- ---- Q1 Q2 Q3 Q4 FY 2011 Q1 Q2 Q3 Q4 FY 2010 --- --- --- --- ------- --- --- --- --- ------- Cash from operations $117,503 $205,260 $376,614 $358,852 $1,058,229 $77,127 $221,561 $183,444 $419,730 $901,862 Less: Additions to property, (51,379) (72,338) (65,000) (83,092) (271,809) (38,467) (45,642) (39,718) (51,018) (174,845) plant and equipment ------- ------- ------- ------- -------- ------- ------- ------- ------- -------- Free cash flow $66,124 $132,922 $311,614 $275,760 $786,420 $38,660 $175,919 $143,726 $368,712 $727,017 ======= ======== ======== ======== ======== ======= ======== ======== ======== ======== Free cash flow as a 37.8% 55.6% 139.5% 132.0% 92.9% 31.6% 105.2% 66.4% 199.4% 105.3% percentage of earnings from continuing operations Free cash flow as a 3.6% 6.7% 14.6% 13.8% 9.9% 2.6% 10.6% 8.2% 21.2% 10.9% percentage of revenue
DOVER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)(in thousands) At December At December 31, 31, ------------ ------------ 2011 2010 ---- ---- Assets: Cash and cash equivalents $1,206,755 $1,189,079 Short-term investments - 121,734 Receivables, net of allowances 1,190,265 1,023,099 Inventories, net 803,346 657,962 Deferred tax and other current assets 196,764 139,751 Property, plant and equipment, net 1,000,870 785,624 Goodwill 3,787,117 3,107,478 Intangible assets, net 1,207,084 799,281 Other assets 104,808 107,642 Assets of discontinued operations 4,441 627,093 ---- ------ $9,501,450 $8,558,743 ========= ========= Liabilities and Stockholders' Equity Notes payable and current maturities of long-term debt $1,022 $16,590 Payables and accrued expenses 1,201,959 1,128,458 Deferred taxes and other noncurrent liabilities 1,061,767 866,720 Long-term debt 2,186,230 1,790,886 Liabilities of discontinued operations 119,917 229,527 Stockholders' equity 4,930,555 4,526,562 -------- -------- $9,501,450 $8,558,743 ========= =========
DOVER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)(in thousands) Year Ended December 31, ----------------------- 2011 2010 ---- ---- Operating activities: Net earnings $895,243 $700,104 Gain from discontinued operations, net of tax (48,878) (9,353) Depreciation and amortization 303,143 241,969 Stock-based compensation 25,991 21,207 Contributions to employee benefit plans (63,567) (58,201) Net change in assets and liabilities (53,703) 6,136 Net cash provided by operating activities of continuing operations 1,058,229 901,862 --------- ------- Investing activities: Proceeds from sale of short- term investments 124,410 553,466 Purchase of short-term investments - (466,881) Proceeds from the sale of property and equipment 9,986 16,660 Additions to property, plant and equipment (271,809) (174,845) Proceeds from sale of businesses 516,901 4,500 Settlement of net investment hedge (18,211) - Acquisitions (net of cash acquired) (1,382,217) (104,418) Net cash used in investing activities of continuing operations (1,020,940) (171,518) ---------- -------- Financing activities: Increase (decrease) in debt, net 371,315 (60,855) Purchase of common stock (242,488) (123,555) Proceeds from exercise of stock options, including tax benefits 39,826 79,721 Dividends to stockholders (219,154) (200,099) Net cash used in financing activities of continuing operations (50,501) (304,788) ------- -------- Net cash provided by discontinued operations 14,898 37,079 ------ ------ Effect of exchange rate changes on cash 15,990 10,008 ------ ------ Net increase in cash and cash equivalents 17,676 472,643 Cash and cash equivalents at beginning of period 1,189,079 716,436 Cash and cash equivalents at end of period $1,206,755 $1,189,079 ========== ==========
ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2011
Acquisitions
During the fourth quarter of 2011, the Company completed two add-on acquisitions in the Engineered Systems segment. For the full year 2011, Dover made a total of nine acquisitions for consideration totaling $1.4 billion. This included the acquisition of Harbison-Fischer within the Energy segment in the first quarter and the acquisition of Sound Solutions within the Communication Technologies segment in the third quarter.
Dispositions
In the fourth quarter of 2011, the Company completed the sale of Heil Trailer International, resulting in an after-tax gain of $0.34 diluted earnings per share ("EPS"). Fourth quarter net earnings from discontinued operations was $0.37 EPS, which includes income from the operations of Heil prior to sale as well as adjustments to other discontinued assets and liabilities. On a full-year basis, the Company generated a net loss on sale of $0.02 EPS, which includes the $0.35 EPS loss on the sale of Paladin and Crenlo in the third quarter and other adjustments for prior year dispositions. For the full year, net earnings from discontinued operations was $0.26 EPS, which includes income from the operations of the businesses sold in 2011 as well as adjustments to other discontinued assets and liabilities.
Tax Rate
The effective tax rate on continuing operations for the fourth quarter of 2011 was 22.3%, compared to the prior-year fourth quarter rate of 20.9%. On a full year basis, the effective tax rates on continuing operations for 2011 and 2010 were 22.7% and 23.2%, respectively. The 2011 and 2010 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 full year rates of 26.5% for 2011 and 28.8% for 2010 primarily reflect the impact of changes in the geographic mix of earnings.
Revenue Growth Factors
2011 ---- Full Q1 Q2 Q3 Q4 Year --- --- --- --- ----- Organic 17.5% 13.2% 9.7% 5.9% 11.3% Acquisitions 4.1% 3.9% 9.2% 9.4% 6.8% Currency translation 0.8% 2.8% 2.8% 0.1% 1.6% 22.4% 19.9% 21.7% 15.4% 19.7% ==== ==== ==== ==== ====
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 Year Ended December December 31, 31, ------------------ -------------------- Free Cash Flow (in thousands) 2011 2010 2011 2010 --------------- ---- ---- ---- ---- Cash flow provided by operating activities $358,852 $419,730 $1,058,229 $901,862 Less: Additions to property, plant and equipment (83,092) (51,018) (271,809) (174,845) -------- -------- Free cash flow $275,760 $368,712 $786,420 $727,017 ======== ======== ======== ======== Free cash flow as a percentage of revenue 13.8% 21.2% 9.9% 10.9% ==== ==== Free cash flow as a percentage of earnings from continuing operations 92.9% 105.3% ==== =====
The full year increase in 2011 free cash flow reflects higher earnings from continuing operations before depreciation and amortization and lower investment in working capital, partially offset by higher tax payments in 2011. In 2011, the Company made tax payments of approximately $280 million compared to $103 million in the prior year. Free cash flow is also impacted by higher capital expenditures in 2011 necessary to fund expansion in the Company's high-growth businesses.
Share Repurchases
During the year ended December 31, 2011, pursuant to a five-year 10,000,000 share repurchase program authorized by the Board of Directors in May 2007, the Company purchased approximately 4.0 million shares of its common stock in the open market at an average price of $58.78 per share. Approximately 2.5 million shares remain authorized for repurchase under this five-year authorization as of December 31, 2011.
Capitalization
The following table provides a summary reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:
At December 31, At December 31, Net Debt to Net Capitalization Ratio (in thousands) 2011 2010 ------------------------------ ---- ---- Current maturities of long-term debt $1,022 $1,590 Commercial paper - 15,000 Long-term debt 2,186,230 1,790,886 --------- --------- Total debt 2,187,252 1,807,476 Less: Cash, cash equivalents and short-term investments (1,206,755) (1,310,813) ---------- ---------- Net debt 980,497 496,663 Add: Stockholders' equity 4,930,555 4,526,562 --------- --------- Net capitalization $5,911,052 $5,023,225 ========== ========== Net debt to net capitalization 16.6% 9.9% ==== ===
The Company's net debt to net capitalization ratio increased at December 31, 2011 primarily due to the use of cash and debt to fund acquisitions totaling $1.4 billion during the year. Total debt increased by $380 million during 2011, primarily due to net borrowings of $789 million under the 4.3% 10-year Notes due 2021 and 5.375% 30-year Notes due 2041 issued in February, part of which were used to repay $400 million of other borrowings, principally commercial paper used to repay the 6.50% 10-year Notes which came due earlier in February 2011. In 2011, the Company also received cash proceeds of $517 million primarily from the sale of three businesses.
Non-GAAP Information:
These Investor Supplement tables contain historical financial information presented under Dover's new segment structure, as discussed within this release. These segment level disclosures are considered "Non-GAAP" financial information until such time that the new segment reporting structure is included within a periodic filing with the Securities and Exchange Commission. Management believes this non-GAAP financial information is useful to investors to better understand historical trends under the revised segment structure, which the company will be reporting under in its Form 10-K for the year ending December 31, 2011. Dover has disclosed herein 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 the non-GAAP measure of free cash flow. Management believes free cash flow is an important measure of the company's operating performance and liquidity that provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase its common stock.
SOURCE Dover Corporation