Attached files
| file | filename |
|---|---|
| EX-99.3 - EX-99.3 - DOVER Corp | d585845dex993.htm |
| EX-99.1 - EX-99.1 - DOVER Corp | d585845dex991.htm |
| EX-10.3 - EX-10.3 - DOVER Corp | d585845dex103.htm |
| EX-10.2 - EX-10.2 - DOVER Corp | d585845dex102.htm |
| EX-10.1 - EX-10.1 - DOVER Corp | d585845dex101.htm |
| EX-2.1 - EX-2.1 - DOVER Corp | d585845dex21.htm |
| 8-K - 8-K - DOVER Corp | d585845d8k.htm |
Exhibit 99.2
Dover Corporation
Unaudited Pro Forma Consolidated Financial Information
On May 9, 2018 (the “Distribution Date”) at 12:01 a.m. ET, Dover Corporation (“Dover”) completed the previously announced distribution (the “Distribution”) of 100% of the outstanding common stock of Apergy Corporation (“Apergy”), to Dover shareholders as of 5:00 p.m. ET on April 30, 2018 (the “Record Date”).
The following unaudited pro forma consolidated statements of earnings of Dover for the three months ended March 31, 2018 and for each of the years ended December 31, 2017, 2016, and 2015 give effect to the Distribution and related transactions as if they occurred on January 1, 2015. The following unaudited pro forma consolidated balance sheet of Dover as of March 31, 2018 gives effect to the Distribution and related transactions as if they occurred on March 31, 2018.
The statements are presented based on information currently available and are intended for informational purposes only and do not purport to represent what Dover’s results of operations and financial position actually would have been had the Distribution and related transactions occurred on the dates indicated, or to project Dover’s financial performance for any future period. Beginning with Dover’s quarterly report for second quarter of 2018, Apergy’s historical financial results for periods prior to the Distribution will be reflected in Dover’s consolidated financial statements within discontinued operations.
The information in the Apergy Separation column in the unaudited pro forma consolidated financial statements of earnings was derived from Dover’s unaudited interim condensed consolidated financial statements for the three months ended March 31, 2018 and Dover’s audited financial statements for the years ended December 31, 2017, 2016, and 2015. The information in the Apergy Separation column in the unaudited pro forma consolidated balance sheet was derived from Dover’s unaudited interim condensed consolidated financial statements as of March 31, 2018. Certain amounts have been reclassified to conform to Dover’s presentation.
The Pro Forma Adjustments column in the unaudited pro forma consolidated statements reflects pro forma adjustments which are described in the accompanying notes.
These unaudited pro forma consolidated financial statements should be read in conjunction with the related notes to these financial statements and with Dover’s historical consolidated financial statements and the related notes included in Dover’s previous filings with the Securities and Exchange Commission (the “SEC”), specifically the Form 10-Q for the three months ended March 31, 2018, the Form 10-Ks for the years ended December 31, 2017, 2016 and 2015 and Apergy’s Form 10-12B filed with the SEC on March 26, 2018, as amended.
DOVER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
THREE MONTHS ENDED MARCH 31, 2018
(In thousands, except per share amounts)
| Dover Historical |
Apergy Separation |
Pro Forma Adjustments |
Notes | Pro Forma Dover Continuing Operations |
||||||||||||||||
| Revenue |
$ | 1,921,579 | $ | (283,922 | ) | $ | 9 | (A | ) | $ | 1,637,666 | |||||||||
| Cost of goods and services |
1,212,638 | (177,804 | ) | 9 | (A | ) | 1,034,843 | |||||||||||||
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|||||||||||||
| Gross profit |
708,941 | (106,118 | ) | — | 602,823 | |||||||||||||||
| Selling, general and administrative expenses |
514,149 | (71,599 | ) | (7,527 | ) | (B | ) | 435,023 | ||||||||||||
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|||||||||||||
| Operating earnings |
194,792 | (34,519 | ) | 7,527 | 167,800 | |||||||||||||||
| Interest expense |
35,807 | (167 | ) | — | 35,640 | |||||||||||||||
| Interest income |
(2,058 | ) | 1 | — | (2,057 | ) | ||||||||||||||
| Other expense (income), net |
286 | (2,616 | ) | 2,294 | (C | ) | (36 | ) | ||||||||||||
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|||||||||||||
| Earnings before provision for income taxes |
160,757 | (31,737 | ) | 5,233 | 134,253 | |||||||||||||||
| Provision for income taxes |
29,322 | (7,039 | ) | 2,558 | (D | ) | 24,841 | |||||||||||||
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| Net earnings from continuing operations |
$ | 131,435 | $ | (24,698 | ) | $ | 2,675 | $ | 109,412 | |||||||||||
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| Basic earnings per common share: |
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| Earnings per share from continuing operations |
$ | 0.85 | $ | 0.71 | ||||||||||||||||
| Weighted average shares outstanding |
154,520 | 154,520 | ||||||||||||||||||
| Diluted earnings per common share: |
||||||||||||||||||||
| Earnings per share from continuing operations |
$ | 0.84 | $ | 0.70 | ||||||||||||||||
| Weighted average shares outstanding |
157,090 | 157,090 | ||||||||||||||||||
DOVER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2017
(In thousands, except per share amounts)
| Dover Historical |
Apergy Separation |
Pro Forma Adjustments |
Notes | Pro Forma Dover Continuing Operations |
||||||||||||||||
| Revenue |
$ | 7,830,436 | $ | (1,009,591 | ) | $ | 22 | (A | ) | $ | 6,820,867 | |||||||||
| Cost of goods and services |
4,940,059 | (648,243 | ) | 22 | (A | ) | 4,291,838 | |||||||||||||
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| Gross profit |
2,890,377 | (361,348 | ) | — | 2,529,029 | |||||||||||||||
| Selling, general and administrative expenses |
1,975,932 | (262,398 | ) | 41 | (B | ) | 1,713,575 | |||||||||||||
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| Operating earnings |
914,445 | (98,950 | ) | (41 | ) | 815,454 | ||||||||||||||
| Interest expense |
145,208 | (260 | ) | — | 144,948 | |||||||||||||||
| Interest income |
(8,502 | ) | 11 | — | (8,491 | ) | ||||||||||||||
| Gain on sale of businesses |
(203,138 | ) | — | — | (203,138 | ) | ||||||||||||||
| Other expense, net |
7,034 | (10,511 | ) | 9,824 | (C | ) | 6,347 | |||||||||||||
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| Earnings before provision for income taxes |
973,843 | (88,190 | ) | (9,865 | ) | 875,788 | ||||||||||||||
| Provision for income taxes |
162,178 | 22,448 | (2,232 | ) | (D | ) | 182,394 | |||||||||||||
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| Net earnings from continuing operations |
$ | 811,665 | $ | (110,638 | ) | $ | (7,633 | ) | $ | 693,394 | ||||||||||
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| Basic earnings per common share: |
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| Earnings per share from continuing operations |
$ | 5.21 | $ | 4.45 | ||||||||||||||||
| Weighted average shares outstanding |
155,685 | 155,685 | ||||||||||||||||||
| Diluted earnings per common share: |
||||||||||||||||||||
| Earnings per share from continuing operations |
$ | 5.15 | $ | 4.40 | ||||||||||||||||
| Weighted average shares outstanding |
157,744 | 157,744 | ||||||||||||||||||
DOVER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2016
(In thousands, except per share amounts)
| Dover Historical |
Apergy Separation |
Pro Forma Adjustments |
Notes | Pro Forma Dover Continuing Operations |
||||||||||||||||
| Revenue |
$ | 6,794,342 | $ | (751,337 | ) | $ | 211 | (A | ) | $ | 6,043,216 | |||||||||
| Cost of goods and services |
4,322,373 | (510,842 | ) | 4,125 | (A | ) | 3,815,656 | |||||||||||||
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| Gross profit |
2,471,969 | (240,495 | ) | (3,914 | ) | 2,227,560 | ||||||||||||||
| Selling, general and administrative expenses |
1,757,523 | (250,576 | ) | 14,062 | (B | ) | 1,521,009 | |||||||||||||
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| Operating earnings |
714,446 | 10,081 | (17,976 | ) | 706,551 | |||||||||||||||
| Interest expense |
136,401 | (432 | ) | — | 135,969 | |||||||||||||||
| Interest income |
(6,759 | ) | 7 | — | (6,752 | ) | ||||||||||||||
| Gain on sale of businesses |
(96,598 | ) | — | — | (96,598 | ) | ||||||||||||||
| Other income, net |
(7,930 | ) | (10,179 | ) | 7,410 | (C | ) | (10,699 | ) | |||||||||||
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| Earnings before provision for income taxes |
689,332 | 20,685 | (25,386 | ) | 684,631 | |||||||||||||||
| Provision for income taxes |
180,440 | 8,043 | (5,967 | ) | (D | ) | 182,516 | |||||||||||||
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| Net earnings from continuing operations |
$ | 508,892 | $ | 12,642 | $ | (19,419 | ) | $ | 502,115 | |||||||||||
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| Basic earnings per common share: |
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| Earnings per share from continuing operations |
$ | 3.28 | $ | 3.23 | ||||||||||||||||
| Weighted average shares outstanding |
155,231 | 155,231 | ||||||||||||||||||
| Diluted earnings per common share: |
||||||||||||||||||||
| Earnings per share from continuing operations |
$ | 3.25 | $ | 3.21 | ||||||||||||||||
| Weighted average shares outstanding |
156,636 | 156,636 | ||||||||||||||||||
DOVER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2015
(In thousands, except per share amounts)
| Dover Historical |
Apergy Separation |
Pro Forma Adjustments |
Notes | Pro Forma Dover Continuing Operations |
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| Revenue |
$ | 6,956,311 | $ | (1,076,680 | ) | $ | 211 | (A | ) | $ | 5,879,842 | |||||||||
| Cost of goods and services |
4,388,167 | (693,702 | ) | 3,645 | (A | ) | 3,698,110 | |||||||||||||
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| Gross profit |
2,568,144 | (382,978 | ) | (3,434 | ) | 2,181,732 | ||||||||||||||
| Selling, general and administrative expenses |
1,647,382 | (294,062 | ) | 16,746 | (B | ) | 1,370,066 | |||||||||||||
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| Operating earnings |
920,762 | (88,916 | ) | (20,180 | ) | 811,666 | ||||||||||||||
| Interest expense |
131,676 | (510 | ) | — | 131,166 | |||||||||||||||
| Interest income |
(4,419 | ) | 7 | — | (4,412 | ) | ||||||||||||||
| Other income, net |
(7,105 | ) | (12,584 | ) | 10,347 | (C | ) | (9,342 | ) | |||||||||||
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| Earnings before provision for income taxes and discontinued operations |
800,610 | (75,829 | ) | (30,527 | ) | 694,254 | ||||||||||||||
| Provision for income taxes |
204,729 | (24,131 | ) | (11,567 | ) | (D | ) | 169,031 | ||||||||||||
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| Net earnings from continuing operations |
$ | 595,881 | $ | (51,698 | ) | $ | (18,960 | ) | $ | 525,223 | ||||||||||
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| Basic earnings per common share: |
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| Earnings per share from continuing operations |
$ | 3.78 | $ | 3.33 | ||||||||||||||||
| Weighted average shares outstanding |
157,619 | 157,619 | ||||||||||||||||||
| Diluted earnings per common share: |
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| Earnings per share from continuing operations |
$ | 3.74 | $ | 3.30 | ||||||||||||||||
| Weighted average shares outstanding |
159,172 | 159,172 | ||||||||||||||||||
DOVER CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2018
(In thousands, except share and per share amounts)
| Dover Historical |
Apergy Separation |
Pro Forma Adjustments |
Notes | Pro Forma Dover Continuing Operations |
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| Assets | ||||||||||||||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 367,222 | $ | (17,122 | ) | $ | 696,809 | (E) | $ | 1,046,909 | ||||||||||
| Receivables, net |
1,414,941 | (227,434 | ) | 19,779 | (F) | 1,207,286 | ||||||||||||||
| Inventories, net |
972,893 | (210,941 | ) | — | 761,952 | |||||||||||||||
| Prepaid and other current assets |
196,943 | (16,494 | ) | 53,484 | (G) | 233,933 | ||||||||||||||
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| Total current assets |
2,951,999 | (471,991 | ) | 770,072 | 3,250,080 | |||||||||||||||
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| Property, plant and equipment, net |
1,030,645 | (220,723 | ) | — | 809,922 | |||||||||||||||
| Goodwill |
4,682,939 | (910,402 | ) | 9,537 | (H) | 3,782,074 | ||||||||||||||
| Intangible assets, net |
1,609,728 | (324,776 | ) | 10,978 | (I) | 1,295,930 | ||||||||||||||
| Other assets and deferred charges |
267,729 | (3,584 | ) | 673 | (J)(G) | 264,818 | ||||||||||||||
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| Total assets |
$ | 10,543,040 | $ | (1,931,476 | ) | $ | 791,260 | $ | 9,402,824 | |||||||||||
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| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Current liabilities: |
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| Notes payable and current maturities of long-term debt |
$ | 426,251 | $ | — | $ | — | $ | 426,251 | ||||||||||||
| Accounts payable |
997,704 | (108,045 | ) | 1,343 | (F) | 891,002 | ||||||||||||||
| Accrued compensation and employee benefits |
201,436 | (24,162 | ) | — | 177,274 | |||||||||||||||
| Accrued insurance |
103,580 | (4,121 | ) | — | 99,459 | |||||||||||||||
| Other accrued expenses |
326,662 | (22,649 | ) | 33,039 | (K) | 337,052 | ||||||||||||||
| Federal and other income taxes |
24,955 | — | (6,408 | ) | (G) | 18,547 | ||||||||||||||
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| Total current liabilities |
2,080,588 | (158,977 | ) | 27,974 | 1,949,585 | |||||||||||||||
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| Long-term debt |
3,032,003 | — | — | 3,032,003 | ||||||||||||||||
| Deferred income taxes |
438,016 | (92,916 | ) | 941 | (G) | 346,041 | ||||||||||||||
| Noncurrent income tax payable |
98,954 | — | — | 98,954 | ||||||||||||||||
| Other liabilities |
447,857 | (16,771 | ) | (8,252 | ) | (J) | 422,834 | |||||||||||||
| Stockholders’ equity: |
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| Total stockholders’ equity |
4,445,622 | (1,662,812 | ) | 770,597 | (L) | 3,553,407 | ||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 10,543,040 | $ | (1,931,476 | ) | $ | 791,260 | $ | 9,402,824 | |||||||||||
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DOVER CORPORATION
Notes to Unaudited Pro Forma Consolidated Financial Statements
| (A) | Represents sales transactions, and related costs of goods and services, between Dover and Apergy that were previously eliminated in consolidation. The pro forma adjustments to cost of sales for the years ended December 31, 2016 and 2015 also include the impact of removing certain amounts that were included in the Apergy stand-alone historical combined financial statements but were not included in Dover’s historical consolidated financial statements. |
| (B) | Represents adjustments to include corporate overhead costs that were previously allocated to Apergy each period that will remain with Dover continuing operations. Also represents adjustments to remove one-time spin costs incurred by Dover and reflected in its historical results for the three months ended March 31, 2018 and the year ended December 31, 2017 as they are not expected to have an ongoing impact to Dover’s continuing operations. Dover expects to incur and pay total one-time costs associated with the separation from Apergy, including legal and advisory costs, of approximately $60 million. |
| (C) | Represents an adjustment primarily to add back intercompany royalty expense included in Apergy’s stand-alone historical combined financial statements. This royalty expense was eliminated in Dover’s historical consolidated financial statements and will not have on ongoing impact to Dover’s continuing operations. |
| (D) | Represents the pro forma tax adjustments. |
| (E) | Represents the payment of $700.0 million from Apergy to Dover in connection with the Distribution from proceeds of third-party debt incurred by Apergy on the date of Distribution. Also represents adjustment to reflect Apergy’s expected cash balance on the date of Distribution and to reflect payments to be made by Dover immediately prior to the Distribution for certain tax liabilities as a result of the separation of Apergy from Dover. |
| (F) | Represents adjustments for assets and liabilities directly attributable to Apergy, including the receivable from Apergy for certain taxes imposed on Dover arising out of the separation and related transactions that Apergy will be responsible for under the Tax Matters Agreement between Apergy and Dover. |
| (G) | Represents the tax impact of the separation of Apergy from Dover. |
| (H) | Represents an adjustment to add back a portion of the goodwill reflected in Apergy’s stand-alone historical combined financial statements that remains with Dover as a result of the relative fair value allocation triggered by the separation of Apergy. |
| (I) | Represents the add back of Apergy’s net intangible assets related to intellectual property and patents which were recorded in Apergy’s stand-alone historical combined financial statements. These net intangible assets were not included in Dover’s historical consolidated financial statements and will not have on ongoing impact to Dover’s continuing operations. |
| (J) | Represents assets and liabilities assumed by Apergy upon the separation related to certain retirement benefits. |
| (K) | Represents an adjustment to reflect additional accruals related to the one-time costs associated with the separation from Apergy, including legal and advisory costs. |
| (L) | Stockholders’ equity was adjusted for the pro forma adjustments specified in Notes (E), (F), (G), (H), (I), (J) and (K). |