UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________ 

FORM 8-K
________________________________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 26, 2017 
________________________________
 
DOVER CORPORATION
(Exact name of registrant as specified in its charter)
________________________________

 	
 	 	 	
State of Delaware	1-4018	53-0257888	
(State or other jurisdiction of incorporation)	 (Commission File Number)	(I.R.S. Employer Identification No.)	
 	 	 	
3005 Highland Parkway	 	 	
Downers Grove, Illinois	 	60515	
(Address of principal executive offices)	 	(Zip Code)	
(630) 541-1540
(Registrant’s telephone number, including area code)
 
______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 	 	
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 	

Item 2.02 Results of Operations and Financial Condition.
 
On January 26, 2017, Dover Corporation (i) issued the Press Release attached hereto as Exhibit 99.1 announcing its results of operations for the year ended December 31, 2016; and (ii) posted on its website at
http://www.dovercorporation.com the presentation slides attached hereto as Exhibit 99.2 for the year ended December 31, 2016.
 
The information in this Current Report on Form 8-K, including exhibits, is being furnished to the Securities and Exchange Commission (the “SEC”) and shall not be deemed to be incorporated by reference into any of Dover’s filings with the SEC under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished as part of this report:
 
99.1 Dover Corporation Press Release dated January 26, 2017.
99.2 Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com.

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

 	 	 	 	
Date:	January 26, 2017	DOVER CORPORATION	 	
 	 	(Registrant)	 	
 	 	 	 	 	
 	 	By:	/s/ Ivonne M. Cabrera	 	
 	 	 	Ivonne M. Cabrera	 	
 	 	 	Senior Vice President, General Counsel & Secretary	 	

EXHIBIT INDEX

Number	 	Exhibit	
99.1	 	Press Release of Dover Corporation dated January 26, 2017	
 	 	 	
99.2	 	Presentation Slides posted on Dover Corporation’s website at http://www.dovercorporation.com	

Exhibit 99.1

                                                

Investor Contact:	 	Media Contact:	
Paul Goldberg	 	Adrian Sakowicz	
Vice President - Investor Relations	 	Vice President - Communications	
(212) 922-1640	 	(630) 743-5039	
peg@dovercorp.com	 	asakowicz@dovercorp.com	

DOVER REPORTS FOURTH QUARTER AND FULL YEAR 2016 RESULTS
 	 	
•	Reports quarterly revenue of $1.8 billion, an increase of 5% from the prior year	
 	 	
•	Delivers quarterly diluted earnings per share from continuing operations of $1.03, including $0.36 gain on disposition, a recall charge of $0.09, and $0.05 of discrete tax benefits	
 	 	
•	Posts full year diluted earnings per share from continuing operations of $3.25, including gains on dispositions of $0.44, a recall charge of $0.09, and $0.09 of discrete tax benefits	
 	 	
•	Confirms 2017 full year diluted earnings per share from continuing operations to be in the range of $3.40 to $3.60	

Downers Grove, Illinois, January 26, 2017 — Dover (NYSE: 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.

Earnings Conference Call Fourth Quarter 2016     January 26, 2017 – 9:00am CT 

 

2 Forward looking statements and non-GAAP measures We want to remind everyone that our comments may contain forward-looking statements that are inherently subject to uncertainties and risks. We caution everyone to be guided in their analysis of Dover Corporation by referring to the documents we file from time to time with the SEC, including our Form 10-K for 2015, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements.  We would also direct your attention to our website, dovercorporation.com,  where considerably more information can be found.  This document contains non-GAAP financial information. Reconciliations of non-GAAP measures are included either in this presentation or Dover’s earnings release and investor supplement for the fourth quarter, which are available on our website. 2 

 

3 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Earnings per share Adj. EPS* Q4 2016 Performance Earnings Per Share (continuing operations) Q4 Q4/Q4 * Excludes discrete tax benefits of $0.05 in Q3 2015, $0.06 in Q4 2015, $0.05 in Q1 2016, $0.05 in Q4 2016, a $0.01 discrete tax expense in Q2 2016, a $0.07 gain on a disposition in Q1 2016, a $0.36 gain on a disposition in Q4 2016, and a $0.09 voluntary product recall charge in Q4 2016  (d) See Press Release for free cash flow reconciliation 3 Quarterly Comments 2015 2016  Revenue growth driven from acquisitions and solid Printing & Identification, Bearings & Compression, and Hygienic & Pharma markets, partially offset by declines in oil & gas markets, and dispositions  U.S. organic activity was flat, ex. Energy. European and China organic activity both improved  Adjusted Segment margin impacted by lower organic volume, production inefficiencies, and acquisition-related costs  Bookings growth largely driven by acquisitions, partially offset by impact of soft longer cycle oil & gas markets and dispositions  Book-to-bill of 0.98 Note: EPS and Adj. EPS include restructuring costs of $0.10 in Q1 2015, $0.01 in Q2 2015, $0.05 in Q3 2015, $0.08 in Q4 2015, $0.07 in Q1 2016, $0.04 in Q2 2016, $0.04 in Q3 2016, and $0.04 in Q4 2016 Revenue $1.8B 5% $6.8B -2% EPS (cont.) $1.03 18% $3.25 -13% Adj. EPS (cont.) $0.71 -12% $2.82 -22% Bookings $1.7B 7% $6.8B flat Seg. Margin 15.8% 250 bps 13.7% -120 bps Adj. Seg. Margin (a) 12.8% -150 bps 13.2% -240 bps Organic Rev. (b) -2% -5% Net Acq. Growth (c) 8% 4% Cash flow from Ops $289M -9% $862M -9% FCF (d) $240M -12% $697M -12% (a) Adjusted for $9M of restructuring in Q4 2016, $16M in Q4 2015, $40M for FY 2016, and $55M for FY 2015; also adjusted for voluntary product recall charges of $23M in Q4 2016, gain on disposition of $12M in Q1 2016 and $85M in Q4 2016. FY FY/FY (b) Change in revenue from businesses owned over 12 months, excluding FX impact (c) Change in revenue from acquisitions, less revenue from dispositions * 

 

4 Revenue  Q4 2016  Energy Engineered Systems  Fluids Refrigeration & Food Equip Total Dover Organic -8% 1% flat -1% -2% Acquisitions - 8% 37% - 11% Dispositions - -3% - -9% -3% Currency -1% -1% -1% - -1% Total -9% 5% 36% -10% 5%  FY 2016  Energy Engineered Systems  Fluids Refrigeration & Food Equip Total Dover Organic -24% 2% -5% flat -5% Acquisitions - 4% 28% - 7% Dispositions - -4% - -6% -3% Currency -1% -1% -1% - -1% Total -25% 1% 22% -6% -2% 

 

5 Energy  Revenue decrease driven by year-over-year declines in oil & gas market fundamentals – Q4 2016 revenue up 7% sequentially – Bearings & Compression growth driven by positive customer mix  Margin of 10.5% exceeds expectation, reflecting very strong incrementals  YoY bookings decline narrows on upstream recovery – Bookings up 11% sequentially  Book-to-bill at 1.02 5 $ in millions * Q4 2016 earnings adjusted for $1M restructuring, Q4 2015 adjusted for $4M in restructuring costs Q4 2016 Q4 2015 % Change % Organic Revenue $293 $323 -9% -8% Earnings $ 31 $ 31 -1% Margin 10.5% 9.7% 80 bps Adj. Earnings* $ 32 $ 35 -9% Adj. Margin* 11.0% 11.0% flat Bookings $300 $316 -5% -4%  Revenue by End-Market % of Q4 Revenue Q4/Q4 Growth Organic Growth Drilling & Production 65% -13% -13% Bearings & Compression 25% 8% 13% Automation 10% -19% -19% 

 

6 Engineered Systems  Organic revenue growth of 1% – 5% organic growth in Printing & Identification driven by strong marking & coding and digital textile markets – Industrial’s organic decline driven by reduced activity in Environmental Solutions  Margin of 15.5% primarily reflects benefits of productivity  Bookings growth reflects strong order activity in Printing & Identification and acquisition growth, partially offset by dispositions and soft Environmental Solutions activity  Book-to-bill of 1.03  6 Q4 2016 Q4 2015 % Change % Organic Revenue(a) $626 $597 5% 1% Earnings $ 97 $ 89 8% Margin 15.5% 14.9% 60 bps Adj. Earnings* $ 97 $ 94 3% Adj. Margin* 15.5% 15.7% -20 bps Bookings(b) $643 $608 6% 2%  Revenue by End-Market % of Q4 Revenue Q4/Q4 Growth Organic Growth Printing & Identification 42% 4% 5% Industrial 58% 5% -1% $ in millions (a) Revenue increased 5% overall, reflecting organic growth of 1% and acquisition growth of 8%, offset by a 3% impact from dispositions and a 1% unfavorable impact from FX (b) Bookings growth of 6% reflects organic growth of 2% and acquisition growth of 8%, partially offset by a 3% impact from dispositions and a 1% unfavorable impact from FX * Q4 2015 earnings adjusted for $5M in restructuring costs 

 

7 Fluids  Revenue growth driven by acquisitions – Organic revenue essentially flat  Strong Hygienic & Pharma markets  Improved activity in Petrochemical & Polymer markets  Weak longer cycle oil & gas markets, especially transport  Margin impacted by product recall charge and acquisitions  Bookings growth driven by acquisitions  Book-to-bill at 0.95  7 $ in millions  Revenue by End-Market % of Q4 Revenue Q4/Q4 Growth Organic Growth Pumps 35% 9% 4% Fluid Transfer 65% 57% -4% Q4 2016 Q4 2015 % Change % Organic Revenue $483 $356 36% flat Earnings $ 35 $ 62 -44% Margin 7.2% 17.6% NM Adj. Earnings* $ 66 $ 64 3% Adj. Margin* 13.6% 17.9% -430 bps Bookings $457 $321 42% -3% * Q4 2016 earnings adjusted for $8M in restructuring costs and $23M in voluntary product recall charges, Q4 2015 adjusted for $1M in restructuring costs 

 

8 Refrigeration & Food Equipment  Organic revenue decline of 1% primarily driven by project timing in can-shaping equipment business   Margin performance reflects gain on disposition, partially offset by production inefficiencies at Hillphoenix and product mix   Organic bookings decline of 2% largely reflects softer standard retail refrigeration case activity   Book-to-bill at 0.89  8 $ in millions  Revenue by End-Market % of Q4 Revenue Q4/Q4 Growth Organic Growth Refrigeration 78% -5% 1% Food Equipment 22% -26% -8% (a) Revenue decline of 10% reflects organic decline of 1% and a 9% impact from dispositions (b) Bookings decline of 11% reflects an organic decline of 2% and a 9% impact from dispositions Q4 2016 Q4 2015 % Change % Organic Revenue(a) $376 $419 -10% -1% Earnings $118 $ 43 176% Margin 31.4% 10.2% NM Adj. Earnings* $ 34 $ 49 -30% Adj. Margin* 9.0% 11.7% -270 bps Bookings(b) $337 $380 -11% -2% * Q4 2016 earnings adjusted for $85M gain on disposition and $1M in restructuring costs, Q4 2015 earnings adjusted for $6M in restructuring costs 

 

9 Q4 2016 Overview 9 Q4 2016 Net Interest Expense $33 million, in-line with forecast  Corporate Expense $32 million, higher than forecast, includes $3 million settlement charge Effective Tax Rate (ETR) Q4 rate was 25.4%. Excluding discrete tax items, Q4 rate was 29.0% Capex $49 million, generally in-line with forecast Share Repurchases No activity 

 

10 FY 2017F Guidance   Corporate expense: ≈ $125 million   Net interest expense: ≈ $133 million   Full-year tax rate: ≈ 28%   Capital expenditures: ≈ 2.4% of revenue   FY free cash flow: ≈ 11% of revenue  2017F  Energy Engineered Systems  Fluids Refrigeration & Food Equip  Total Organic rev. 13% - 16% 1% - 3% 0% - 2% 0% - 2% 3% - 5% Acquisitions - ≈ 7% ≈ 31% - ≈ 10% Dispositions - (1%) - (5%) (1%) Currency (1%) (2%) (2%) (1%) (2%) Total revenue 12% - 15% 5% - 7% 29% - 31% (6% - 4%) 10% - 12% 

 

11 2017F EPS Guidance – Bridge  2016 EPS – Continuing Ops (GAAP): $3.25 – Less 2016 gain on dispositions(1): (0.44) – Less 2016 earnings from dispositions(2) : (0.05) – Plus 2016 charges related to expected recall: 0.09  2016E Adjusted EPS $2.85  – Net restructuring(3): 0.08 - 0.10 – Performance including restructuring benefits: 0.81 – 0.95 – Compensation & investment: (0.15 - 0.13) – Interest / Corp. / Tax rate / Shares / Other (net): (0.19 - 0.17)   2017F EPS – Continuing Ops $3.40 - $3.60 (2) Includes 2016 operating earnings from THI and Tipper Tie (3) Includes restructuring costs of approximately $0.18 in FY 2016 and $0.08 - $0.10 in FY 2017F (1) Includes $0.07 gain on the disposition of THI in Q1 2016 and $0.36 gain on disposition of Tipper Tie in Q4 2016 

 

 

13 Appendix 

 

14 2016 EPS – Bridge  2015 EPS – Continuing Ops (GAAP) $ 3.74 – Less 2015 tax items(1): (0.11)  2015 Adjusted EPS $ 3.63  – Net restructuring(2): 0.07 – Performance including restructuring benefits & net acquisitions (3): (0.40) – Compensation & investment: (0.05) – Interest / Corp. / Tax rate / Shares / Other (net): 0.00 – 2016 tax items(4): 0.09 – Voluntary product recall: (0.09)   2016 EPS – Continuing Ops (GAAP) $3.25 (1) Includes discrete tax benefits of $0.05 in Q3 2015 and $0.06 in Q4 2015 (2) Includes restructuring costs of $0.25 in FY 2015 and $0.18 in FY 2016 (3) Includes restructuring benefits of $0.47 and operating earnings of completed acquisitions less dispositions, as well as gains on dispositions (4) Includes discrete tax benefits of $0.05 in Q1 2016, $0.05 in Q4 2016, and a discrete tax cost of $0.01 in Q2 2016