Delaware
|
53-0257888
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
|
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3005 Highland Parkway
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|
Downers Grove, Illinois
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60515
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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|
Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if smaller reporting company)
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Smaller reporting company
o
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Page
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Three Months Ended March 31,
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||||||
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2016
|
|
2015
|
||||
Revenue
|
$
|
1,622,273
|
|
|
$
|
1,715,501
|
|
Cost of goods and services
|
1,033,009
|
|
|
1,088,342
|
|
||
Gross profit
|
589,264
|
|
|
627,159
|
|
||
Selling and administrative expenses
|
443,448
|
|
|
434,634
|
|
||
Operating earnings
|
145,816
|
|
|
192,525
|
|
||
Interest expense, net
|
31,714
|
|
|
32,037
|
|
||
Other income, net
|
(13,522
|
)
|
|
(4,187
|
)
|
||
Earnings before provision for income taxes and discontinued operations
|
127,624
|
|
|
164,675
|
|
||
Provision for income taxes
|
28,268
|
|
|
47,485
|
|
||
Earnings from continuing operations
|
99,356
|
|
|
117,190
|
|
||
Earnings from discontinued operations, net
|
—
|
|
|
92,320
|
|
||
Net earnings
|
$
|
99,356
|
|
|
$
|
209,510
|
|
|
|
|
|
||||
Earnings per share from continuing operations:
|
|
|
|
||||
Basic
|
$
|
0.64
|
|
|
$
|
0.72
|
|
Diluted
|
$
|
0.64
|
|
|
$
|
0.72
|
|
|
|
|
|
||||
Earnings per share from discontinued operations:
|
|
|
|
||||
Basic
|
$
|
—
|
|
|
$
|
0.57
|
|
Diluted
|
$
|
—
|
|
|
$
|
0.57
|
|
|
|
|
|
||||
Net earnings per share:
|
|
|
|
||||
Basic
|
$
|
0.64
|
|
|
$
|
1.30
|
|
Diluted
|
$
|
0.64
|
|
|
$
|
1.28
|
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
155,064
|
|
|
161,650
|
|
||
Diluted
|
156,161
|
|
|
163,323
|
|
||
|
|
|
|
||||
Dividends paid per common share
|
$
|
0.42
|
|
|
$
|
0.40
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Net earnings
|
$
|
99,356
|
|
|
$
|
209,510
|
|
|
|
|
|
||||
Other comprehensive earnings (loss), net of tax
|
|
|
|
||||
Foreign currency translation adjustments:
|
|
|
|
||||
Foreign currency translation gains (losses) during period
|
8,769
|
|
|
(83,829
|
)
|
||
Reclassification of foreign currency translation gains to earnings upon sale of subsidiaries
|
—
|
|
|
(280
|
)
|
||
Total foreign currency translation
|
8,769
|
|
|
(84,109
|
)
|
||
|
|
|
|
||||
Pension and other postretirement benefit plans:
|
|
|
|
||||
Amortization of actuarial losses included in net periodic pension cost
|
1,409
|
|
|
2,598
|
|
||
Amortization of prior service costs included in net periodic pension cost
|
1,041
|
|
|
1,228
|
|
||
Total pension and other postretirement benefit plans
|
2,450
|
|
|
3,826
|
|
||
|
|
|
|
||||
Changes in fair value of cash flow hedges:
|
|
|
|
||||
Unrealized net (losses) gains arising during period
|
(49
|
)
|
|
1,158
|
|
||
Net gains reclassified into earnings
|
(47
|
)
|
|
(99
|
)
|
||
Total cash flow hedges
|
(96
|
)
|
|
1,059
|
|
||
|
|
|
|
||||
Other
|
1,839
|
|
|
214
|
|
||
|
|
|
|
||||
Other comprehensive earnings (loss)
|
12,962
|
|
|
(79,010
|
)
|
||
|
|
|
|
||||
Comprehensive earnings
|
$
|
112,318
|
|
|
$
|
130,500
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
243,720
|
|
|
$
|
362,185
|
|
Receivables, net of allowances of $20,445 and $18,050
|
1,167,313
|
|
|
1,120,490
|
|
||
Inventories, net
|
849,830
|
|
|
802,895
|
|
||
Prepaid and other current assets
|
84,893
|
|
|
133,440
|
|
||
Total current assets
|
2,345,756
|
|
|
2,419,010
|
|
||
Property, plant and equipment, net
|
858,984
|
|
|
854,269
|
|
||
Goodwill
|
4,034,620
|
|
|
3,737,389
|
|
||
Intangible assets, net
|
1,543,397
|
|
|
1,413,223
|
|
||
Other assets and deferred charges
|
198,138
|
|
|
182,185
|
|
||
Total assets
|
$
|
8,980,895
|
|
|
$
|
8,606,076
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Notes payable and current maturities of long-term debt
|
$
|
405,858
|
|
|
$
|
151,122
|
|
Accounts payable
|
706,191
|
|
|
650,880
|
|
||
Accrued compensation and employee benefits
|
178,784
|
|
|
223,039
|
|
||
Accrued insurance
|
101,584
|
|
|
99,642
|
|
||
Other accrued expenses
|
247,033
|
|
|
235,971
|
|
||
Federal and other taxes on income
|
9,359
|
|
|
6,528
|
|
||
Total current liabilities
|
1,648,809
|
|
|
1,367,182
|
|
||
Long-term debt, net
|
2,610,642
|
|
|
2,603,655
|
|
||
Deferred income taxes
|
603,496
|
|
|
575,709
|
|
||
Other liabilities
|
419,815
|
|
|
414,955
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Total stockholders' equity
|
3,698,133
|
|
|
3,644,575
|
|
||
Total liabilities and stockholders' equity
|
$
|
8,980,895
|
|
|
$
|
8,606,076
|
|
|
Common Stock $1 Par Value
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Earnings (Loss)
|
|
Treasury Stock
|
|
Total Stockholders' Equity
|
||||||||||||
Balance at December 31, 2015
|
$
|
256,113
|
|
|
$
|
928,409
|
|
|
$
|
7,686,642
|
|
|
$
|
(254,573
|
)
|
|
$
|
(4,972,016
|
)
|
|
$
|
3,644,575
|
|
Net earnings
|
—
|
|
|
—
|
|
|
99,356
|
|
|
—
|
|
|
—
|
|
|
99,356
|
|
||||||
Dividends paid
|
—
|
|
|
—
|
|
|
(65,340
|
)
|
|
—
|
|
|
—
|
|
|
(65,340
|
)
|
||||||
Common stock issued for the exercise of share-based awards
|
138
|
|
|
(4,971
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,833
|
)
|
||||||
Tax benefit from the exercise of share-based awards
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||||
Share-based compensation expense
|
—
|
|
|
11,387
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,387
|
|
||||||
Other comprehensive earnings, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
12,962
|
|
|
—
|
|
|
12,962
|
|
||||||
Balance at March 31, 2016
|
$
|
256,251
|
|
|
$
|
934,851
|
|
|
$
|
7,720,658
|
|
|
$
|
(241,611
|
)
|
|
$
|
(4,972,016
|
)
|
|
$
|
3,698,133
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Operating Activities of Continuing Operations
|
|
|
|
||||
Net earnings
|
$
|
99,356
|
|
|
$
|
209,510
|
|
|
|
|
|
||||
Adjustments to reconcile net earnings to cash from operating activities:
|
|
|
|
||||
Earnings from discontinued operations, net
|
—
|
|
|
(92,320
|
)
|
||
Depreciation and amortization
|
88,604
|
|
|
80,182
|
|
||
Share-based compensation
|
11,387
|
|
|
13,387
|
|
||
Gain on sale of business
|
(11,228
|
)
|
|
—
|
|
||
Cash effect of changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
20,103
|
|
|
27,737
|
|
||
Inventories
|
(29,478
|
)
|
|
(18,861
|
)
|
||
Prepaid expenses and other assets
|
(1,522
|
)
|
|
(2,297
|
)
|
||
Accounts payable
|
(14,299
|
)
|
|
(18,876
|
)
|
||
Accrued compensation and employee benefits
|
(65,887
|
)
|
|
(98,493
|
)
|
||
Accrued expenses and other liabilities
|
3,202
|
|
|
(14,198
|
)
|
||
Accrued and deferred taxes, net
|
45,654
|
|
|
55,843
|
|
||
Other, net
|
(12,479
|
)
|
|
(10,282
|
)
|
||
Net cash provided by operating activities of continuing operations
|
133,413
|
|
|
131,332
|
|
||
|
|
|
|
||||
Investing Activities of Continuing Operations
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(37,230
|
)
|
|
(27,956
|
)
|
||
Acquisitions (net of cash and cash equivalents acquired)
|
(436,058
|
)
|
|
(6,500
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
619
|
|
|
6,041
|
|
||
Proceeds from the sale of businesses
|
47,300
|
|
|
185,000
|
|
||
Other
|
(488
|
)
|
|
—
|
|
||
Net cash (used in) provided by investing activities of continuing operations
|
(425,857
|
)
|
|
156,585
|
|
||
|
|
|
|
||||
Financing Activities of Continuing Operations
|
|
|
|
|
|
||
Purchase of common stock
|
—
|
|
|
(200,055
|
)
|
||
Proceeds from exercise of share-based awards, including tax benefits
|
2,181
|
|
|
2,786
|
|
||
Change in commercial paper and notes payable, net
|
247,099
|
|
|
(152,500
|
)
|
||
Dividends paid to stockholders
|
(65,940
|
)
|
|
(64,442
|
)
|
||
Payments to settle employee tax obligations on exercise of share-based awards
|
(4,833
|
)
|
|
(2,361
|
)
|
||
Reduction of long-term debt
|
—
|
|
|
(31
|
)
|
||
Net cash provided by (used in) financing activities of continuing operations
|
178,507
|
|
|
(416,603
|
)
|
||
|
|
|
|
||||
Cash Flows from Discontinued Operations
|
|
|
|
|
|
||
Net cash provided by operating activities of discontinued operations
|
—
|
|
|
2,717
|
|
||
Net cash provided by investing activities of discontinued operations
|
—
|
|
|
800
|
|
||
Net cash provided by discontinued operations
|
—
|
|
|
3,517
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(4,528
|
)
|
|
(17,926
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(118,465
|
)
|
|
(143,095
|
)
|
||
Cash and cash equivalents at beginning of period
|
362,185
|
|
|
681,581
|
|
||
Cash and cash equivalents at end of period
|
$
|
243,720
|
|
|
$
|
538,486
|
|
Current assets, net of cash acquired
|
$
|
96,436
|
|
Property, plant and equipment
|
24,319
|
|
|
Goodwill
|
281,903
|
|
|
Intangible assets
|
176,693
|
|
|
Other non-current assets
|
5,429
|
|
|
Current liabilities
|
(102,317
|
)
|
|
Non-current liabilities
|
(46,405
|
)
|
|
Net assets acquired
|
$
|
436,058
|
|
|
Amount allocated
|
|
Useful life (in years)
|
||
Goodwill - Non deductible
|
$
|
281,903
|
|
|
na
|
Customer intangibles
|
93,227
|
|
|
10
|
|
Trademarks
|
23,691
|
|
|
10
|
|
Other intangibles
|
59,775
|
|
|
11
|
|
|
$
|
458,596
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue from continuing operations:
|
|
|
|
||||
As reported
|
$
|
1,622,273
|
|
|
$
|
1,715,501
|
|
Pro forma
|
1,628,406
|
|
|
1,836,711
|
|
||
Earnings from continuing operations:
|
|
|
|
||||
As reported
|
$
|
99,356
|
|
|
$
|
117,190
|
|
Pro forma
|
107,613
|
|
|
122,404
|
|
||
Basic earnings per share from continuing operations:
|
|
|
|
||||
As reported
|
$
|
0.64
|
|
|
$
|
0.72
|
|
Pro forma
|
0.69
|
|
|
0.76
|
|
||
Diluted earnings per share from continuing operations:
|
|
|
|
||||
As reported
|
$
|
0.64
|
|
|
$
|
0.72
|
|
Pro forma
|
0.69
|
|
|
0.75
|
|
|
Three Months Ended March 31,
|
||
|
2015
|
||
Revenue
|
$
|
64,495
|
|
|
|
||
Gain on sale, net of tax
|
87,354
|
|
|
|
|
||
Earnings from operations before taxes
|
8,980
|
|
|
Provision for income taxes
|
(4,014
|
)
|
|
Earnings from operations, net of tax
|
4,966
|
|
|
|
|
||
Earnings from discontinued operations, net of tax
|
$
|
92,320
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Raw materials
|
$
|
347,674
|
|
|
$
|
333,551
|
|
Work in progress
|
145,952
|
|
|
135,624
|
|
||
Finished goods
|
467,199
|
|
|
443,032
|
|
||
Subtotal
|
960,825
|
|
|
912,207
|
|
||
Less reserves
|
(110,995
|
)
|
|
(109,312
|
)
|
||
Total
|
$
|
849,830
|
|
|
$
|
802,895
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Land
|
$
|
56,376
|
|
|
$
|
55,567
|
|
Buildings and improvements
|
543,292
|
|
|
546,809
|
|
||
Machinery, equipment and other
|
1,764,139
|
|
|
1,772,031
|
|
||
Subtotal
|
2,363,807
|
|
|
2,374,407
|
|
||
Less accumulated depreciation
|
(1,504,823
|
)
|
|
(1,520,138
|
)
|
||
Total
|
$
|
858,984
|
|
|
$
|
854,269
|
|
|
Energy
|
|
Engineered Systems
|
|
Fluids
|
|
Refrigeration & Food Equipment
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
1,047,180
|
|
|
$
|
1,473,864
|
|
|
$
|
655,745
|
|
|
$
|
560,600
|
|
|
$
|
3,737,389
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
281,903
|
|
|
—
|
|
|
281,903
|
|
|||||
Purchase price adjustments
|
—
|
|
|
363
|
|
|
4,781
|
|
|
580
|
|
|
5,724
|
|
|||||
Disposition of business
|
—
|
|
|
(9,615
|
)
|
|
—
|
|
|
—
|
|
|
(9,615
|
)
|
|||||
Foreign currency translation
|
1,580
|
|
|
6,916
|
|
|
9,968
|
|
|
755
|
|
|
19,219
|
|
|||||
Balance at March 31, 2016
|
$
|
1,048,760
|
|
|
$
|
1,471,528
|
|
|
$
|
952,397
|
|
|
$
|
561,935
|
|
|
$
|
4,034,620
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
172,554
|
|
|
$
|
49,245
|
|
|
$
|
150,926
|
|
|
$
|
45,536
|
|
Patents
|
155,225
|
|
|
117,441
|
|
|
150,570
|
|
|
112,399
|
|
||||
Customer Intangibles
|
1,663,762
|
|
|
628,709
|
|
|
1,567,048
|
|
|
595,635
|
|
||||
Unpatented Technologies
|
133,362
|
|
|
55,971
|
|
|
137,919
|
|
|
56,495
|
|
||||
Drawings & Manuals
|
34,701
|
|
|
16,757
|
|
|
34,232
|
|
|
15,760
|
|
||||
Distributor Relationships
|
120,957
|
|
|
39,592
|
|
|
64,614
|
|
|
37,610
|
|
||||
Other
|
23,390
|
|
|
18,497
|
|
|
23,923
|
|
|
18,168
|
|
||||
Total
|
2,303,951
|
|
|
926,212
|
|
|
2,129,232
|
|
|
881,603
|
|
||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
165,658
|
|
|
|
|
165,594
|
|
|
|
||||||
Total intangible assets, net
|
$
|
1,543,397
|
|
|
|
|
$
|
1,413,223
|
|
|
|
•
|
The Energy segment incurred restructuring charges of
$6,416
related to various programs across the segment focused on workforce reductions and field and service consolidations. These programs were initiated to better align cost base with the anticipated demand environment.
|
•
|
The Engineered Systems segment recorded
$1,967
of restructuring charges relating to headcount reductions across various businesses primarily related to optimization of administrative functions within the Printing & Identification platform and U.S. manufacturing consolidation within the Industrial platform.
|
•
|
The Fluids segment recorded
$5,226
of restructuring charges principally related to headcount reductions and facility consolidations at various businesses across the segment.
|
•
|
The Refrigeration and Food Equipment segment and corporate incurred restructuring charges related to headcount reductions.
|
|
Severance
|
|
Exit
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
11,036
|
|
|
$
|
2,955
|
|
|
$
|
13,991
|
|
Restructuring charges
|
10,681
|
|
|
3,706
|
|
|
14,387
|
|
|||
Payments
|
(8,234
|
)
|
|
(1,491
|
)
|
|
(9,725
|
)
|
|||
Foreign currency translation
|
121
|
|
|
40
|
|
|
161
|
|
|||
Other, including write-offs of fixed assets and acquired balances
|
2,458
|
|
|
(1,119
|
)
|
|
1,339
|
|
|||
Balance at March 31, 2016
|
$
|
16,062
|
|
|
$
|
4,091
|
|
|
$
|
20,153
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Short-term
|
|
|
|
||||
Current portion of long-term debt
|
$
|
4,558
|
|
|
$
|
122
|
|
Commercial paper
|
401,300
|
|
|
151,000
|
|
||
|
$
|
405,858
|
|
|
$
|
151,122
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Long-term
|
|
|
|
||||
5.45% 10-year notes due March 15, 2018
|
349,340
|
|
|
349,258
|
|
||
2.125% 7-year notes due December 1, 2020 (Euro-denominated)
|
334,783
|
|
|
328,592
|
|
||
4.30% 10-year notes due March 1, 2021
|
449,872
|
|
|
449,865
|
|
||
3.150% 10-year notes due November 15, 2025
|
397,028
|
|
|
396,951
|
|
||
6.65% 30-year debentures due June 1, 2028
|
199,560
|
|
|
199,552
|
|
||
5.375% 30-year debentures due October 15, 2035
|
296,884
|
|
|
296,844
|
|
||
6.60% 30-year notes due March 15, 2038
|
248,058
|
|
|
248,036
|
|
||
5.375% 30-year notes due March 1, 2041
|
346,029
|
|
|
345,989
|
|
||
Other, less current installments
|
2,233
|
|
|
2,255
|
|
||
Total long-term debt
|
2,623,787
|
|
|
2,617,342
|
|
||
Unamortized debt issuance costs
|
(13,145
|
)
|
|
(13,687
|
)
|
||
Long-term debt, net of debt issuance costs
|
$
|
2,610,642
|
|
|
$
|
2,603,655
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Interest expense
|
$
|
33,318
|
|
|
$
|
33,005
|
|
Interest income
|
(1,604
|
)
|
|
(968
|
)
|
||
Interest expense, net
|
$
|
31,714
|
|
|
$
|
32,037
|
|
|
Fair Value Asset (Liability)
|
|
|
||||||
|
March 31, 2016
|
|
December 31, 2015
|
|
Balance Sheet Caption
|
||||
Foreign currency forward / collar contracts
|
$
|
113
|
|
|
$
|
170
|
|
|
Prepaid / Other assets
|
Foreign currency forward / collar contracts
|
(416
|
)
|
|
(452
|
)
|
|
Other accrued expenses
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
(Loss) gain on Euro-denominated debt
|
$
|
(6,165
|
)
|
|
$
|
35,350
|
|
Loss on Swiss franc cross-currency swap
|
—
|
|
|
(1,333
|
)
|
||
Total (loss) gain on net investment hedges before tax
|
(6,165
|
)
|
|
34,017
|
|
||
Tax benefit (expense)
|
2,158
|
|
|
(11,906
|
)
|
||
Net (loss) gain on net investment hedges, net of tax
|
$
|
(4,007
|
)
|
|
$
|
22,111
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
|
Level 2
|
|
Level 2
|
||||
Assets:
|
|
|
|
||||
Foreign currency cash flow hedges
|
$
|
113
|
|
|
$
|
170
|
|
Liabilities:
|
|
|
|
||||
Foreign currency cash flow hedges
|
416
|
|
|
452
|
|
|
SARs
|
||||||
|
2016
|
|
2015
|
||||
Risk-free interest rate
|
1.05
|
%
|
|
1.51
|
%
|
||
Dividend yield
|
3.09
|
%
|
|
2.24
|
%
|
||
Expected life (years)
|
4.6
|
|
|
5.1
|
|
||
Volatility
|
26.17
|
%
|
|
27.19
|
%
|
||
|
|
|
|
||||
Grant price
|
$
|
57.25
|
|
|
$
|
73.28
|
|
Fair value per share at date of grant
|
$
|
9.25
|
|
|
$
|
14.55
|
|
|
Performance shares
|
||||||
|
2016
|
|
2015
|
||||
Fair value per share at date of grant
|
$
|
57.25
|
|
|
$
|
73.28
|
|
Average attainment rate reflected in expense
|
87.75
|
%
|
|
43.83
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Pre-tax compensation expense
|
$
|
11,387
|
|
|
$
|
13,387
|
|
Tax benefit
|
(4,050
|
)
|
|
(4,764
|
)
|
||
Total stock-based compensation expense, net of tax
|
$
|
7,337
|
|
|
$
|
8,623
|
|
|
2016
|
|
2015
|
||||
Beginning Balance, January 1
|
$
|
44,466
|
|
|
$
|
49,388
|
|
Provision for warranties
|
14,031
|
|
|
11,075
|
|
||
Settlements made
|
(12,462
|
)
|
|
(13,395
|
)
|
||
Other adjustments, including acquisitions and currency translation
|
4,666
|
|
|
(630
|
)
|
||
Ending balance, March 31
|
$
|
50,701
|
|
|
$
|
46,438
|
|
|
Three Months Ended March 31,
|
||||||||||||||
|
U.S. Plan
|
|
Non-U.S. Plans
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service Cost
|
$
|
3,478
|
|
|
$
|
3,915
|
|
|
$
|
1,373
|
|
|
$
|
1,688
|
|
Interest Cost
|
5,762
|
|
|
5,791
|
|
|
1,375
|
|
|
1,486
|
|
||||
Expected return on plan assets
|
(9,698
|
)
|
|
(10,393
|
)
|
|
(1,948
|
)
|
|
(2,019
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
183
|
|
|
224
|
|
|
(99
|
)
|
|
23
|
|
||||
Recognized actuarial loss
|
1,609
|
|
|
3,155
|
|
|
665
|
|
|
675
|
|
||||
Transition obligation
|
—
|
|
|
—
|
|
|
1
|
|
|
9
|
|
||||
Curtailments, special termination benefits, and settlements
|
—
|
|
|
810
|
|
|
—
|
|
|
2
|
|
||||
Net periodic expense
|
$
|
1,334
|
|
|
$
|
3,502
|
|
|
$
|
1,367
|
|
|
$
|
1,864
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Service Cost
|
$
|
740
|
|
|
$
|
935
|
|
Interest Cost
|
1,317
|
|
|
1,266
|
|
||
Amortization:
|
|
|
|
||||
Prior service cost
|
1,567
|
|
|
1,732
|
|
||
Recognized actuarial (gain) loss
|
(140
|
)
|
|
71
|
|
||
Net periodic expense
|
$
|
3,484
|
|
|
$
|
4,004
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Service Cost
|
$
|
13
|
|
|
$
|
41
|
|
Interest Cost
|
105
|
|
|
128
|
|
||
Amortization:
|
|
|
|
||||
Prior service cost
|
(36
|
)
|
|
(93
|
)
|
||
Recognized actuarial gain
|
(59
|
)
|
|
(8
|
)
|
||
Net periodic expense
|
$
|
23
|
|
|
$
|
68
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
March 31, 2016
|
|
March 31, 2015
|
||||||||||||||||||||
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
|
Pre-tax
|
|
Tax
|
|
Net of tax
|
||||||||||||
Foreign currency translation adjustments
|
$
|
6,611
|
|
|
$
|
2,158
|
|
|
$
|
8,769
|
|
|
$
|
(72,203
|
)
|
|
$
|
(11,906
|
)
|
|
$
|
(84,109
|
)
|
Pension and other postretirement benefit plans
|
3,691
|
|
|
(1,241
|
)
|
|
2,450
|
|
|
5,788
|
|
|
(1,962
|
)
|
|
3,826
|
|
||||||
Changes in fair value of cash flow hedges
|
(147
|
)
|
|
51
|
|
|
(96
|
)
|
|
1,629
|
|
|
(570
|
)
|
|
1,059
|
|
||||||
Other
|
2,090
|
|
|
(251
|
)
|
|
1,839
|
|
|
241
|
|
|
(27
|
)
|
|
214
|
|
||||||
Total other comprehensive earnings (loss)
|
$
|
12,245
|
|
|
$
|
717
|
|
|
$
|
12,962
|
|
|
$
|
(64,545
|
)
|
|
$
|
(14,465
|
)
|
|
$
|
(79,010
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Net earnings
|
$
|
99,356
|
|
|
$
|
209,510
|
|
Other comprehensive earnings (loss)
|
12,962
|
|
|
(79,010
|
)
|
||
Comprehensive earnings
|
$
|
112,318
|
|
|
$
|
130,500
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Pension and postretirement benefit plans:
|
|
|
|
||||
Amortization of actuarial losses
|
$
|
2,076
|
|
|
$
|
3,902
|
|
Amortization of prior service costs
|
1,615
|
|
|
1,886
|
|
||
Total before tax
|
3,691
|
|
|
5,788
|
|
||
Tax provision
|
(1,241
|
)
|
|
(1,962
|
)
|
||
Net of tax
|
$
|
2,450
|
|
|
$
|
3,826
|
|
|
|
|
|
||||
Cash flow hedges:
|
|
|
|
||||
Net gains reclassified into earnings
|
$
|
(72
|
)
|
|
$
|
(153
|
)
|
Tax benefit
|
25
|
|
|
54
|
|
||
Net of tax
|
$
|
(47
|
)
|
|
$
|
(99
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue:
|
|
|
|
||||
Energy
|
$
|
283,230
|
|
|
$
|
430,423
|
|
Engineered Systems
|
576,995
|
|
|
573,196
|
|
||
Fluids
|
399,062
|
|
|
340,236
|
|
||
Refrigeration & Food Equipment
|
363,252
|
|
|
372,097
|
|
||
Intra-segment eliminations
|
(266
|
)
|
|
(451
|
)
|
||
Total consolidated revenue
|
$
|
1,622,273
|
|
|
$
|
1,715,501
|
|
|
|
|
|
||||
Earnings from continuing operations:
|
|
|
|
||||
Segment earnings:
|
|
|
|
||||
Energy
|
$
|
11,244
|
|
|
$
|
52,305
|
|
Engineered Systems
|
93,748
|
|
|
88,149
|
|
||
Fluids
|
46,047
|
|
|
54,634
|
|
||
Refrigeration & Food Equipment
|
38,161
|
|
|
36,150
|
|
||
Total segments
|
189,200
|
|
|
231,238
|
|
||
Corporate expense / other
(1)
|
29,862
|
|
|
34,526
|
|
||
Net interest expense
|
31,714
|
|
|
32,037
|
|
||
Earnings before provision for income taxes and discontinued operations
|
127,624
|
|
|
164,675
|
|
||
Provision for taxes
|
28,268
|
|
|
47,485
|
|
||
Earnings from continuing operations
|
$
|
99,356
|
|
|
$
|
117,190
|
|
(1)
|
Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, and various administrative expenses relating to the corporate headquarters.
|
Shares of common stock repurchased
|
2,753,165
|
|
|
Spending on share repurchases (in thousands)
|
$
|
200,055
|
|
Average price paid per share
|
$
|
72.66
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Earnings from continuing operations
|
$
|
99,356
|
|
|
$
|
117,190
|
|
Earnings from discontinued operations, net
|
—
|
|
|
92,320
|
|
||
Net earnings
|
$
|
99,356
|
|
|
$
|
209,510
|
|
|
|
|
|
||||
Basic earnings per common share:
|
|
|
|
||||
Earnings from continuing operations
|
$
|
0.64
|
|
|
$
|
0.72
|
|
Earnings from discontinued operations, net
|
$
|
—
|
|
|
$
|
0.57
|
|
Net earnings
|
$
|
0.64
|
|
|
$
|
1.30
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
155,064,000
|
|
|
161,650,000
|
|
||
|
|
|
|
||||
Diluted earnings per common share:
|
|
|
|
||||
Earnings from continuing operations
|
$
|
0.64
|
|
|
$
|
0.72
|
|
Earnings from discontinued operations, net
|
$
|
—
|
|
|
$
|
0.57
|
|
Net earnings
|
$
|
0.64
|
|
|
$
|
1.28
|
|
|
|
|
|
||||
Weighted average shares outstanding
|
156,161,000
|
|
|
163,323,000
|
|
|
Three Months Ended March 31,
|
||||
|
2016
|
|
2015
|
||
Weighted average shares outstanding - Basic
|
155,064,000
|
|
|
161,650,000
|
|
Dilutive effect of assumed exercise of employee stock options and SARs and vesting of performance shares
|
1,097,000
|
|
|
1,673,000
|
|
Weighted average shares outstanding - Diluted
|
156,161,000
|
|
|
163,323,000
|
|
•
|
Our Energy segment, serving the Drilling & Production, Bearings & Compression, and Automation end markets, is a provider of customer-driven solutions and services for safe and efficient production and processing of fuels worldwide and has a strong presence in the bearings and compression components and automation markets.
|
•
|
Our Engineered Systems segment is comprised of two platforms, Printing & Identification and Industrials, and is focused on the design, manufacture and service of critical equipment and components serving the fast-moving consumer goods, digital textile printing, vehicle service, environmental solutions and industrial end markets.
|
•
|
Our Fluids segment, serving the Fluid Transfer and Pumps end markets, is focused on the safe handling of critical fluids across the retail fueling, chemical, hygienic, oil and gas, and industrial end markets.
|
•
|
Our Refrigeration & Food Equipment segment is a provider of innovative and energy efficient equipment and systems serving the commercial refrigeration and food service end markets.
|
|
Revenue
|
|
Segment Earnings
|
||||||||
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Energy
|
17.5
|
%
|
|
25.1
|
%
|
|
5.9
|
%
|
|
22.6
|
%
|
Engineered Systems
|
35.6
|
%
|
|
33.4
|
%
|
|
49.5
|
%
|
|
38.1
|
%
|
Fluids
|
24.5
|
%
|
|
19.8
|
%
|
|
24.4
|
%
|
|
23.7
|
%
|
Refrigeration & Food Equipment
|
22.4
|
%
|
|
21.7
|
%
|
|
20.2
|
%
|
|
15.6
|
%
|
|
Three Months Ended March 31,
|
|||||||||
(dollars in thousands, except per share figures)
|
2016
|
|
2015
|
|
% Change
|
|||||
Revenue
|
$
|
1,622,273
|
|
|
$
|
1,715,501
|
|
|
(5.4
|
)%
|
Cost of goods and services
|
1,033,009
|
|
|
1,088,342
|
|
|
(5.1
|
)%
|
||
Gross profit
|
589,264
|
|
|
627,159
|
|
|
(6.0
|
)%
|
||
Gross profit margin
|
36.3
|
%
|
|
36.6
|
%
|
|
(0.3
|
)
|
||
|
|
|
|
|
|
|||||
Selling and administrative expenses
|
443,448
|
|
|
434,634
|
|
|
2.0
|
%
|
||
Selling and administrative as a percent of revenue
|
27.3
|
%
|
|
25.3
|
%
|
|
2.0
|
|
||
|
|
|
|
|
|
|||||
Interest expense, net
|
31,714
|
|
|
32,037
|
|
|
(1.0
|
)%
|
||
Other income, net
|
(13,522
|
)
|
|
(4,187
|
)
|
|
nm*
|
|||
|
|
|
|
|
|
|||||
Provision for income taxes
|
28,268
|
|
|
47,485
|
|
|
(40.5
|
)%
|
||
Effective tax rate
|
22.1
|
%
|
|
28.8
|
%
|
|
(6.7
|
)
|
||
|
|
|
|
|
|
|||||
Earnings from continuing operations
|
99,356
|
|
|
117,190
|
|
|
(15.2
|
)%
|
||
Earnings from discontinued operations, net
|
—
|
|
|
92,320
|
|
|
nm*
|
|||
Earnings from continuing operations per common share - diluted
|
$
|
0.64
|
|
|
$
|
0.72
|
|
|
(11.1
|
)%
|
•
|
The Energy segment incurred restructuring charges of
$6.4 million
related to various programs across the segment focused on workforce reductions and field and service consolidations. These programs were initiated to better align cost base with the anticipated demand environment.
|
•
|
The Engineered Systems segment recorded
$2.0 million
of restructuring charges relating to headcount reductions across various businesses primarily related to optimization of administrative functions within the Printing & Identification platform and U.S. manufacturing consolidation within the Industrial platform.
|
•
|
The Fluids segment recorded
$5.2 million
of restructuring charges principally related to headcount reductions and facility consolidations at various businesses across the segment.
|
•
|
The Refrigeration and Food Equipment segment and corporate incurred restructuring charges related to headcount reductions.
|
|
Three Months Ended March 31,
|
|||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
% Change
|
|||||
Revenue:
|
|
|
|
|
|
|||||
Drilling & Production
|
$
|
188,360
|
|
|
$
|
299,158
|
|
|
(37.0
|
)%
|
Bearings & Compression
|
64,444
|
|
|
77,591
|
|
|
(16.9
|
)%
|
||
Automation
|
30,426
|
|
|
53,674
|
|
|
(43.3
|
)%
|
||
Total
|
$
|
283,230
|
|
|
$
|
430,423
|
|
|
(34.2
|
)%
|
|
|
|
|
|
|
|||||
Segment earnings
|
$
|
11,244
|
|
|
$
|
52,305
|
|
|
(78.5
|
)%
|
Operating margin
|
4.0
|
%
|
|
12.2
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment EBITDA
|
$
|
45,404
|
|
|
$
|
86,732
|
|
|
(47.7
|
)%
|
Segment EBITDA margin
|
16.0
|
%
|
|
20.2
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Other measures:
|
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
34,160
|
|
|
$
|
34,427
|
|
|
(0.8
|
)%
|
Bookings
|
273,445
|
|
|
416,628
|
|
|
(34.4
|
)%
|
||
Backlog
|
144,828
|
|
|
212,060
|
|
|
(31.7
|
)%
|
||
|
|
|
|
|
|
|||||
Components of revenue decline:
|
|
|
|
|
YTD 2016 vs. 2015
|
|||||
Organic decline
|
|
|
|
|
(32.9
|
)%
|
||||
Acquisitions
|
|
|
|
|
—
|
%
|
||||
Foreign currency translation
|
|
|
|
|
(1.3
|
)%
|
||||
|
|
|
|
|
(34.2
|
)%
|
•
|
Drilling & Production end market revenue (representing
66.5%
of segment revenue)
decreased
$110.8 million
, or
37.0%
, due to declines in U.S. rig count and capital spending in our North American markets. Our customers continue to delay and significantly limit their capital spending due to uncertainty within the oil and gas markets they serve and to conserve cash.
|
•
|
Bearings & Compression end market revenue (representing
22.8%
of segment revenue)
decreased
$13.1 million
, or
16.9%
, as U.S. OEM end-user demand weakened within its end markets, especially with oil and gas customers.
|
•
|
Automation end market revenue (representing approximately
10.7%
of segment revenue)
decreased
$23.2 million
, or
43.3%
. This decrease was driven by customer project delays, as low oil prices and market uncertainties continued to drive reduced capital spending by well service and exploration and production companies.
|
|
Three Months Ended March 31,
|
|||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
% Change
|
|||||
Revenue:
|
|
|
|
|
|
|||||
Printing & Identification
|
$
|
239,681
|
|
|
$
|
230,181
|
|
|
4.1
|
%
|
Industrials
|
337,314
|
|
|
343,015
|
|
|
(1.7
|
)%
|
||
Total
|
$
|
576,995
|
|
|
$
|
573,196
|
|
|
0.7
|
%
|
|
|
|
|
|
|
|||||
Segment earnings
|
$
|
93,748
|
|
|
$
|
88,149
|
|
|
6.4
|
%
|
Operating margin
|
16.2
|
%
|
|
15.4
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment EBITDA
|
$
|
109,784
|
|
|
$
|
102,675
|
|
|
6.9
|
%
|
Segment EBITDA margin
|
19.0
|
%
|
|
17.9
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Other measures:
|
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
16,036
|
|
|
$
|
14,526
|
|
|
10.4
|
%
|
|
|
|
|
|
|
|||||
Bookings:
|
|
|
|
|
|
|||||
Printing & Identification
|
$
|
242,569
|
|
|
$
|
235,617
|
|
|
3.0
|
%
|
Industrials
|
329,957
|
|
|
337,070
|
|
|
(2.1
|
)%
|
||
|
$
|
572,526
|
|
|
$
|
572,687
|
|
|
—
|
%
|
Backlog:
|
|
|
|
|
|
|||||
Printing & Identification
|
$
|
102,640
|
|
|
$
|
108,151
|
|
|
(5.1
|
)%
|
Industrials
|
235,384
|
|
|
276,598
|
|
|
(14.9
|
)%
|
||
|
$
|
338,024
|
|
|
$
|
384,749
|
|
|
(12.1
|
)%
|
|
|
|
|
|
|
|||||
Components of revenue decline:
|
|
|
|
|
YTD 2016 vs. 2015
|
|||||
Organic growth
|
|
|
|
|
2.7
|
%
|
||||
Acquisitions
|
|
|
|
|
3.0
|
%
|
||||
Dispositions
|
|
|
|
|
(2.8
|
)%
|
||||
Foreign currency translation
|
|
|
|
|
(2.2
|
)%
|
||||
|
|
|
|
|
0.7
|
%
|
•
|
Revenue of our Printing & Identification platform (representing
41.5%
of segment revenue)
increased
$9.5 million
, or
4.1%
, primarily driven by acquisition-related growth of 7.5% and organic growth of 1.4%, offset by the negative impact of foreign currency translation of 4.8%. Organic revenue growth was primarily driven by solid marking and coding sales.
|
•
|
Revenue of our Industrials platform (representing
58.5%
of segment revenue),
decreased
$5.7 million
, or
1.7%
, as compared to the prior year quarter. Broad-based organic growth of 3.5% across the platform was led by strong results in our Environmental Solutions business. This organic growth was offset by the impact of the disposition of Texas Hydraulics of 4.8% and a minimal unfavorable foreign currency translation impact.
|
|
Three Months Ended March 31,
|
|||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
% Change
|
|||||
Revenue:
|
|
|
|
|
|
|||||
Fluid Transfer
|
$
|
238,157
|
|
|
$
|
195,171
|
|
|
22.0
|
%
|
Pumps
|
160,905
|
|
|
145,065
|
|
|
10.9
|
%
|
||
|
$
|
399,062
|
|
|
$
|
340,236
|
|
|
17.3
|
%
|
|
|
|
|
|
|
|||||
Segment earnings
|
$
|
46,047
|
|
|
$
|
54,634
|
|
|
(15.7
|
)%
|
Operating margin
|
11.5
|
%
|
|
16.1
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment EBITDA
|
$
|
66,558
|
|
|
$
|
68,482
|
|
|
(2.8
|
)%
|
Segment EBITDA margin
|
16.7
|
%
|
|
20.1
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Other measures:
|
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
20,511
|
|
|
$
|
13,848
|
|
|
48.1
|
%
|
Bookings
|
418,345
|
|
|
339,310
|
|
|
23.3
|
%
|
||
Backlog
|
286,457
|
|
|
259,504
|
|
|
10.4
|
%
|
||
|
|
|
|
|
|
|||||
Components of revenue decline:
|
|
|
|
|
YTD 2016 vs. 2015
|
|||||
Organic decline
|
|
|
|
|
(3.4
|
)%
|
||||
Acquisitions
|
|
|
|
|
22.4
|
%
|
||||
Foreign currency translation
|
|
|
|
|
(1.7
|
)%
|
||||
|
|
|
|
|
17.3
|
%
|
•
|
Fluid Transfer revenue (representing
59.7%
of segment revenue)
increased
$43.0 million
, or
22.0%
, as compared to the prior year period. This revenue increase was primarily driven by our first quarter acquisition of Tokheim offset by the impact of lower customer demand driven by reduced capital spending by integrated energy customers.
|
•
|
Pumps revenue (representing
40.3%
of segment revenue)
increased
$15.8 million
, or
10.9%
, as compared with the prior year period, primarily driven by our fourth quarter 2015 acquisitions offset by the impacts of lower activity in oil and gas-related pump end markets.
|
|
Three Months Ended March 31,
|
|||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
% Change
|
|||||
Revenue:
|
|
|
|
|
|
|||||
Refrigeration
|
$
|
279,290
|
|
|
$
|
290,716
|
|
|
(3.9
|
)%
|
Food Equipment
|
83,962
|
|
|
81,381
|
|
|
3.2
|
%
|
||
Total
|
$
|
363,252
|
|
|
$
|
372,097
|
|
|
(2.4
|
)%
|
|
|
|
|
|
|
|||||
Segment earnings
|
$
|
38,161
|
|
|
$
|
36,150
|
|
|
5.6
|
%
|
Operating margin
|
10.5
|
%
|
|
9.7
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Segment EBITDA
|
$
|
54,889
|
|
|
$
|
52,608
|
|
|
4.3
|
%
|
Segment EBITDA margin
|
15.1
|
%
|
|
14.1
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Other measures:
|
|
|
|
|
|
|||||
Depreciation and amortization
|
$
|
16,728
|
|
|
$
|
16,458
|
|
|
1.6
|
%
|
Bookings
|
411,367
|
|
|
419,659
|
|
|
(2.0
|
)%
|
||
Backlog
|
303,479
|
|
|
337,084
|
|
|
(10.0
|
)%
|
||
|
|
|
|
|
|
|||||
Components of revenue decline:
|
|
|
|
|
YTD 2016 vs. 2015
|
|||||
Organic growth
|
|
|
|
|
3.0
|
%
|
||||
Acquisitions
|
|
|
|
|
—
|
%
|
||||
Dispositions
|
|
|
|
|
(4.8
|
)%
|
||||
Foreign currency translation
|
|
|
|
|
(0.6
|
)%
|
||||
|
|
|
|
|
(2.4
|
)%
|
•
|
Refrigeration revenue (representing
76.9%
of segment revenue)
decreased
$11.4 million
, or
3.9%
, quarter over quarter, primarily driven by the disposition of our walk-in coolers product line at the end of 2015. The impact of this disposition was partially offset by organic growth from several retail refrigeration customers.
|
•
|
Food Equipment revenue (representing
23.1%
of segment revenue)
increased
$2.6 million
, or
3.2%
, compared with the prior year quarter, mainly driven by our can shaping equipment business.
|
|
Three Months Ended March 31,
|
||||||
Cash Flows from Continuing Operations
(in thousands)
|
2016
|
|
2015
|
||||
Net Cash Flows Provided By (Used In):
|
|
|
|
||||
Operating activities
|
$
|
133,413
|
|
|
$
|
131,332
|
|
Investing activities
|
(425,857
|
)
|
|
156,585
|
|
||
Financing activities
|
178,507
|
|
|
(416,603
|
)
|
•
|
Proceeds from the sale of business:
In
2016
, we generated cash of
$47.3 million
from the sale of Texas Hydraulics.
|
•
|
Acquisitions:
During
2016
, we deployed approximately
$436.1 million
, net, to acquire Tokheim within the Fluids segment. In comparison, in
2015
, we acquired one business for a net aggregate cash purchase price of approximately
$6.5 million
.
|
•
|
Capital spending:
Our capital expenditures
increased
$9.3 million
in
2016
as compared to the same period in
2015
, primarily within the Fluids segment. We expect full year
2016
capital expenditures to approximate 2.3% of revenue.
|
•
|
Share purchases:
During the three months ended
March 31, 2016
, the Company repurchased
no
shares of common stock compared to repurchases of
$200.1 million
for the same period in 2015. As of
March 31, 2016
, the approximate number of shares still available for repurchase under the January 2015 share repurchase authorization was
6.8 million
.
|
•
|
Commercial paper and notes payable:
Commercial paper and notes payable, net increased in the 2016 period by
$247.1 million
, as we borrowed $316.4 million to fund the acquisition of Tokheim. We subsequently utilized proceeds from the sale of Texas Hydraulics and cash to pay down $61.1 million of commercial paper, net of interim period borrowings. We generally use commercial paper borrowings for general corporate purposes, as well as to fund acquisitions and repurchase common stock.
|
•
|
Dividend payments:
Dividends paid to shareholders in
2016
was relatively flat as compared to
2015
. Our dividends paid per common share increased 5% to
$0.42
in
2016
compared to
$0.40
in
2015
; however, this higher dividend rate was partially offset by lower common shares outstanding for the 2016 period relative to 2015 due to approximately 5.5 million of share repurchases over the past twelve months.
|
•
|
Net proceeds from the exercise of share-based awards
: Proceeds from the exercise of share-based awards were
$0.6 million
lower
in
2016
as compared to the prior year. These proceeds have declined in recent periods as the number of stock options are diminishing and a larger number of cashless exercises of equity awards have occurred. Payments to settle tax obligations on these exercises
increased
$2.5 million
in
2016
.
|
|
Three Months Ended March 31,
|
||||||
Free Cash Flow
(dollars in thousands)
|
2016
|
|
2015
|
||||
Cash flow provided by operating activities
|
$
|
133,413
|
|
|
$
|
131,332
|
|
Less: Capital expenditures
|
(37,230
|
)
|
|
(27,956
|
)
|
||
Free cash flow
|
$
|
96,183
|
|
|
$
|
103,376
|
|
Free cash flow as a percentage of revenue
|
5.9
|
%
|
|
6.0
|
%
|
Net Debt to Net Capitalization Ratio
(dollars in thousands)
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Current maturities of long-term debt
|
|
$
|
4,558
|
|
|
$
|
122
|
|
Commercial paper
|
|
401,300
|
|
|
151,000
|
|
||
Long-term debt
|
|
2,610,642
|
|
|
2,603,655
|
|
||
Total debt
|
|
3,016,500
|
|
|
2,754,777
|
|
||
Less: Cash and cash equivalents
|
|
(243,720
|
)
|
|
(362,185
|
)
|
||
Net debt
|
|
2,772,780
|
|
|
2,392,592
|
|
||
Add: Stockholders' equity
|
|
3,698,133
|
|
|
3,644,575
|
|
||
Net capitalization
|
|
$
|
6,470,913
|
|
|
$
|
6,037,167
|
|
Net debt to net capitalization
|
|
42.8
|
%
|
|
39.6
|
%
|
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
In January 2015, the Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 15,000,000 shares of its common stock over the following three years. No repurchases were made in the
first
quarter of 2016. As of
March 31, 2016
, the number of shares still available for repurchase under the January 2015 share repurchase authorization was
6,771,458
.
|
|
|
DOVER CORPORATION
|
|
|
|
Date:
|
April 21, 2016
|
/s/ Brad M. Cerepak
|
|
|
Brad M. Cerepak
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
Date:
|
April 21, 2016
|
/s/ Sandra A. Arkell
|
|
|
Sandra A. Arkell
|
|
|
Vice President, Controller
|
|
|
(Principal Accounting Officer)
|
Number of shares of Dover Common Stock -
|
<<# of Shares>>
|
SSAR Base Price Per Share -
|
$
xx.xx
|
Date of Grant -
|
February 11, 2016
|
Expiration Date -
|
February 11, 2016
|
Your business unit -
|
«Company»
|
The Performance Period is the three-year period -
|
2016 - 2018
|
Your target Performance Share Award at the 100% level -
|
«Tagetlocal» «Currency_Code»
|
(i)
|
Base-Year EBITDA
|
(ii)
|
10% of Base-Year Sales
|
(iii)
|
90% of Prior-to-Base-Year iTSR Base
|
Your business unit -
|
«Company»
|
The Performance Period is the three-year period -
|
2016 - 2018
|
Your target Performance Share Award at the 100% level -
|
« # of Shares» Shares
|
iTSR for Performance Period
|
Payout (% of target)
|
<6%
|
0%
|
6%
|
25%
|
9%
|
100%
|
17%
|
300%
|
>
24%
|
400%
|
(i)
|
Base-Year EBITDA
|
(ii)
|
10% of Base-Year Sales
|
(iii)
|
90% of Prior-to-Base-Year iTSR Base
|
1.
|
A Restricted Stock Units is a bookkeeping entry on the books of Dover. No shares of Dover common stock shall be issued to you in respect of the Restricted Stock Unit Award until the restrictions have lapsed at the end of a Restricted Period. Within 30 days following the end of the Restricted Period, Dover shall issue shares of Common Stock in your name equal to the number of Restricted Stock Units that have vested during the Restricted Period less applicable tax withholding. In the event that your employment shall terminate prior to your vesting in the Restricted Stock Units, the Restricted Stock Units shall be forfeited.
|
2.
|
You shall vest in the Restricted Stock Unit Award, and all restrictions thereon shall lapse, with respect to 33% of your Restricted Stock Units on March 15, 2017 (or the first trading thereafter if such date is not a trading day), with respect to 33% of your Restricted Stock Units on March 15, 2018 (or the first trading thereafter if such date is not a trading day) and with respect to 34% of your Restricted Stock Units on March 15, 2019 (or the first trading thereafter if such date is not a trading day), subject to the forfeiture provisions of the Plan. You must be an active employee of Dover or an affiliate at the end of the Restricted Period in order for your Restricted Shares to vest, with certain exceptions as provided in the Plan.
|
3.
|
During the Restricted Period you shall not have any rights of a stockholder or the right to receive any dividends declared and other distributions paid with respect to the Restricted Stock Units. Within 30 days after the end of the Restricted Period you shall be paid all Dividend Equivalents with respect to the Restricted Stock Units that have vested.
|
4.
|
You do not have any voting rights with respect to Restricted Stock Units.
|
5.
|
As a condition of receiving your Restricted Stock Unit Award, you agree to be bound by the terms and conditions of the Dover Corporation Anti-hedging and Anti-pledging Policy and by any Clawback Policy to be adopted by Dover, as such policies may be in effect from time to time. The Anti-hedging and Anti-pledging Policy prohibits hedging or pledging
any
Dover equity securities held by you or certain designees, whether such Dover securities are, or have been, acquired under the Plan, another compensation plan sponsored by Dover, or otherwise. Please review the Anti-hedging and Anti-pledging Policy to make sure that you are in compliance. You may obtain a copy of the current version of the Anti-hedging, Anti-pledging, and any Clawback Policy to be adopted by Dover by contacting the Benefits Department at 630-541-1540.
|
6.
|
For Non-US Employees, your Restricted Stock Unit Award is subject to the conditions of the Addendum for Non-US Employees.
|
7.
|
Your Restricted Stock Unit Award is not transferable by you other than by will or the laws of descent and distribution and in accordance with the applicable terms and conditions of the Plan.
|
8.
|
Dover reserves the right to amend, modify, or terminate the Plan at any time in its discretion without notice.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Dover Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 21, 2016
|
/s/ Brad M. Cerepak
|
|
|
Brad M. Cerepak
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Dover Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 21, 2016
|
/s/ Robert A. Livingston
|
|
|
Robert A. Livingston
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended
March 31, 2016
(the “
Form 10-Q
”
) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
April 21, 2016
|
/s/ Robert A. Livingston
|
|
|
Robert A. Livingston
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Dated:
|
April 21, 2016
|
/s/ Brad M. Cerepak
|
|
|
Brad M. Cerepak
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
(Principal Financial Officer)
|