Company Quick10K Filing
Quick10K
Dover
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$96.24 145 $13,990
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-10 Officers
8-K 2019-05-02 Amend Bylaw, Shareholder Vote, Exhibits
8-K 2019-04-18 Earnings, Exhibits
8-K 2019-04-18 Earnings, Exhibits
8-K 2019-04-02 Regulation FD, Exhibits
8-K 2019-02-20 Officers
8-K 2019-02-08 Regulation FD, Exhibits
8-K 2019-01-29 Earnings, Exhibits
8-K 2019-01-29 Earnings, Exhibits
8-K 2018-11-02 Regulation FD, Exhibits
8-K 2018-10-18 Earnings, Exhibits
8-K 2018-10-18 Earnings, Exhibits
8-K 2018-09-11 Regulation FD, Other Events, Exhibits
8-K 2018-08-03 Officers
8-K 2018-08-02 Officers, Regulation FD, Exhibits
8-K 2018-07-19 Earnings, Exhibits
8-K 2018-07-19 Earnings, Exhibits
8-K 2018-05-22 Other Events, Exhibits
8-K 2018-05-09 Enter Agreement, M&A, Officers, Exhibits
8-K 2018-05-04 Shareholder Vote
8-K 2018-04-16 Earnings
8-K 2018-04-06 Suspend Trading, Exhibits
8-K 2018-04-03 Regulation FD, Exhibits
8-K 2018-03-16 Officers, Exhibits
8-K 2018-01-30 Earnings, Exhibits
SJM JM Smucker 14,330
H Hyatt Hotels 8,150
BPT BP Prudhoe Bay Royalty Trust 424
MEIP MEI Pharma 208
JNCE Jounce Therapeutics 184
RIBT Ricebran 93
NYB New York Community Bancorp 0
ELRE Yinfu Gold 0
PARF Paradise 0
JBK Lehman 0
DOV 2019-03-31
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 a2019033110-qex101.htm
EX-10.2 a2019033110-qexhibit102.htm
EX-10.3 a2019033110-qexhibit103.htm
EX-10.4 a2019033110-qex104.htm
EX-31.1 a2019033110-qexhibit311.htm
EX-31.2 a2019033110-qexhibit312.htm
EX-32 a2019033110-qexhibit32.htm

Dover Earnings 2019-03-31

DOV 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
DOVER Corp--12-31YesLarge Accelerated 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019 

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to

Commission File Number: 1-4018
dov-20190331_g1.jpg
(Exact name of registrant as specified in its charter)
Delaware53-0257888
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
3005 Highland Parkway 
Downers Grove, Illinois60515
(Address of principal executive offices)(Zip Code)
(630) 541-1540
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ  No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act.
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o  No  þ

The number of shares outstanding of the Registrant’s common stock as of April 11, 2019 was 145,329,437.



Dover Corporation
Form 10-Q
Table of Contents

Page
 
 
 
 
 
  
 






Table of Contents

Item 1. Financial Statements

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)

 Three Months Ended March 31, 
 20192018
Revenue$1,724,757 $1,637,671 
Cost of goods and services1,101,215 1,034,842 
Gross profit623,542 602,829 
Selling, general and administrative expenses408,466 435,026 
Loss on assets held for sale46,946  
Operating earnings168,130 167,803 
Interest expense31,808 35,640 
Interest income(890)(2,058)
Other income, net(1,106)(30)
Earnings before provision for income taxes138,318 134,251 
Provision for income taxes32,613 24,841 
Earnings from continuing operations 105,705 109,410 
Earnings from discontinued operations, net  22,025 
Net earnings $105,705 $131,435 
Earnings per share from continuing operations:
Basic$0.73 $0.71 
Diluted$0.72 $0.70 
Earnings per share from discontinued operations: 
Basic$ $0.14 
Diluted$ $0.14 
Net earnings per share:
Basic$0.73 $0.85 
Diluted$0.72 $0.84 
Weighted average shares outstanding:
Basic145,087 154,520 
Diluted146,911 157,090 
 

See Notes to Condensed Consolidated Financial Statements


1

Table of Contents

DOVER CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
(Unaudited)

 Three Months Ended March 31,
 20192018
Net earnings$105,705 $131,435 
Other comprehensive earnings, net of tax 
Foreign currency translation adjustments:
Foreign currency translation gains  23,700 52,308 
Reclassification of foreign currency translation losses to earnings 25,339  
Total foreign currency translation adjustments49,039 52,308 
Pension and other post-retirement benefit plans:
Amortization of actuarial losses included in net periodic pension cost175 1,939 
Amortization of prior service costs included in net periodic pension cost572 743 
Total pension and other post-retirement benefit plans747 2,682 
Changes in fair value of cash flow hedges:
Unrealized net gains arising during period2,594 1,362 
Net gains reclassified into earnings(230)(253)
Total cash flow hedges2,364 1,109 
Other comprehensive earnings, net of tax 52,150 56,099 
Comprehensive earnings$157,855 $187,534 


See Notes to Condensed Consolidated Financial Statements

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DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 March 31, 2019December 31, 2018
Assets 
Current assets:   
Cash and cash equivalents $243,014 $396,221 
Receivables, net of allowances of $29,116 and $28,469 1,272,053 1,231,859 
Inventories 828,298 748,796 
Prepaid and other current assets 141,891 126,878 
Assets held for sale44,210  
Total current assets 2,529,466 2,503,754 
Property, plant and equipment, net 797,682 806,497 
Goodwill 3,777,277 3,677,328 
Intangible assets, net 1,149,136 1,134,256 
Other assets and deferred charges 404,350 243,936 
Total assets$8,657,911 $8,365,771 
Liabilities and Stockholders' Equity
Current liabilities:   
Notes payable and current maturities of long-term debt$346,255 $220,318 
Accounts payable 952,162 969,531 
Accrued compensation and employee benefits 176,726 212,666 
Accrued insurance 99,215 97,600 
Other accrued expenses 337,417 313,452 
Federal and other income taxes 14,566 13,854 
Liabilities held for sale 20,581  
Total current liabilities 1,946,922 1,827,421 
Long-term debt2,940,967 2,943,660 
Deferred income taxes 349,428 339,325 
Noncurrent income tax payable54,304 54,304 
Other liabilities 528,837 432,395 
Stockholders' equity:   
Total stockholders' equity 2,837,453 2,768,666 
Total liabilities and stockholders' equity $8,657,911 $8,365,771 


See Notes to Condensed Consolidated Financial Statements





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DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)

 Common stock $1 par valueAdditional paid-in capitalTreasury stockRetained earningsAccumulated other comprehensive (loss) earningsTotal stockholders' equity
Balance at December 31, 2018 $257,822 $886,016 $(5,947,562)$7,815,486 $(243,096)$2,768,666 
Net earnings    105,705  105,705 
Dividends paid ($0.48 per share)    (69,809) (69,809)
Common stock issued for the exercise of share-based awards392 (20,000)   (19,608)
Stock-based compensation expense 8,182    8,182 
Other comprehensive earnings, net of tax     52,150 52,150 
Other, net  (7,833)   (7,833)
Balance at March 31, 2019 $258,214 $866,365 $(5,947,562)$7,851,382 $(190,946)$2,837,453 


 Common stock $1 par valueAdditional paid-in capitalTreasury stockRetained earningsAccumulated other comprehensive (loss) earningsTotal stockholders' equity
Balance at December 31, 2017 $256,992 $942,485 $(5,077,039)$8,455,501 $(194,759)$4,383,180 
Adoption of ASU 2018-02
   12,856 (12,856) 
Cumulative catch-up adjustment related to Adoption of Topic 606
   175  175 
Net earnings    131,435  131,435 
Dividends paid ($0.47 per share)    (72,691) (72,691)
Common stock issued for the exercise of share-based awards290 (15,229)   (14,939)
Stock-based compensation expense 7,314    7,314 
Common stock acquired   (44,977)  (44,977)
Other comprehensive earnings, net of tax     56,099 56,099 
Other, net  26    26 
Balance at March 31, 2018 $257,282 $934,596 $(5,122,016)$8,527,276 $(151,516)$4,445,622 



See Notes to Condensed Consolidated Financial Statements

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DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three Months Ended March 31, 
 20192018
Operating Activities:  
Net earnings$105,705 $131,435 
Adjustments to reconcile net earnings to cash from operating activities:
Earnings from discontinued operations, net (22,025)
Loss on assets held for sale46,946  
Depreciation and amortization67,738 68,625 
Stock-based compensation expense8,182 6,745 
Other, net2,363 (5,440)
Cash effect of changes in assets and liabilities:
Accounts receivable, net(42,252)22,781 
Inventories(73,041)(63,554)
Prepaid expenses and other assets(14,921)(14,778)
Accounts payable(22,638)(6,690)
Accrued compensation and employee benefits(55,559)(69,554)
Accrued expenses and other liabilities(16,107)(36,029)
Accrued and deferred taxes, net18,108 4,019 
Net cash provided by operating activities24,524 15,535 
Investing Activities:   
Additions to property, plant and equipment(37,122)(44,678)
Acquisitions, net of cash acquired(175,083)(68,385)
Proceeds from sale of property, plant and equipment170 2,160 
Proceeds from sale of businesses2,245 2,069 
Other(7,900)(13,763)
Net cash used in investing activities(217,690)(122,597)
Financing Activities:   
Repurchase of common stock
 (44,977)
Change in commercial paper and notes payable125,893 195,066 
Dividends paid to stockholders(69,809)(72,691)
Payments to settle employee tax obligations on exercise of share-based awards(19,608)(14,943)
Repayment of long-term debt (350,000)
Other(409)(1,558)
Net cash provided by (used in) financing activities36,067 (289,103)
Cash Flows from Discontinued Operations   
Net cash provided by operating activities of discontinued operations 19,963 
Net cash used in investing activities of discontinued operations (13,426)
Net cash provided by discontinued operations  6,537 
Effect of exchange rate changes on cash and cash equivalents3,892 2,886 
Net decrease in cash and cash equivalents (153,207)(386,742)
Cash and cash equivalents at beginning of period396,221 753,964 
Cash and cash equivalents at end of period$243,014 $367,222 


See Notes to Condensed Consolidated Financial Statements

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
1. Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim periods and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes for Dover Corporation ("Dover" or the "Company") for the year ended December 31, 2018, included in the Company's Annual Report on Form 10-K filed with the SEC on February 15, 2019. The year end Condensed Consolidated Balance Sheet was derived from audited financial statements. Certain amounts in the prior periods have been reclassified to conform to the current year presentation.  

On May 9, 2018, the Company completed a pro-rata distribution of the common stock of Apergy Corporation ("Apergy") to the Company's shareholders of record as of the close of business on April 30, 2018. Apergy holds entities conducting upstream energy businesses previously included in the Energy segment. As discussed in Note 5 - Discontinued and Disposed Operations, the Apergy businesses met the criteria to be reported as discontinued operations because the spin-off is a strategic shift in business that has a major effect on the Company's operations and financial results. Therefore, the Company is reporting the historical results of Apergy, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein. Subsequent to the spin-off of Apergy, effective the second quarter of 2018, the Company no longer has the Energy segment and is aligned into three reportable segments. See Note 18 —Segment Information for additional information regarding the updated segments, including segment results for the three months ended March 31, 2019 and 2018. Unless otherwise noted, the accompanying Notes to the Consolidated Financial Statements have all been revised to reflect the effect of the separation of Apergy and all prior year balances have been revised accordingly to reflect continuing operations only.

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. The Condensed Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year.

2. Spin-off of Apergy Corporation 

On May 9, 2018, Dover completed the distribution of Apergy to its shareholders. The transaction was completed through the pro rata distribution of 100% of the common stock of Apergy to Dover's shareholders of record as of the close of business on April 30, 2018. Each Dover shareholder received one share of Apergy common stock for every two shares of Dover common stock held as of the record date.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The following is a summary of the assets and liabilities transferred to Apergy as part of the separation on May 9, 2018:
Assets:
Cash and cash equivalents$10,357 
Current assets462,620 
Non-current assets1,438,760 
$1,911,737 
Liabilities:
Current liabilities$185,354 
Non-current liabilities119,568 
$304,922 
Net assets distributed to Apergy Corporation$1,606,815 
Less: Cash received from Apergy Corporation700,000 
Net distribution to Apergy Corporation$906,815 

In connection with the spin-off from the company, Apergy issued and sold $300.0 million in aggregate principal amount of its 6.375% senior notes due May 2026 in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended, and incurred $415.0 million in borrowings under its new senior secured term loan facility to fund a one-time cash payment of $700.0 million to Dover. Dover received net cash of $689.6 million upon separation, which reflects $10.4 million of cash held by Apergy on the distribution date and retained by it in connection with its separation from Dover. Dover utilized the proceeds from Apergy as the primary source of funding for $1 billion of share repurchases started in December 2017 and completed in December 2018.
Included within the net assets distributed to Apergy is approximately $33 million of accumulated other comprehensive earnings attributable to Apergy, relating primarily to foreign currency translation gains, offset by unrecognized losses on pension obligations.
The historical results of Apergy, including the results of operations, cash flows, and related assets and liabilities have been reclassified to discontinued operations for all periods presented herein. See Note 5 — Held for Sale, Disposed and Discontinued Operations. Pursuant to the separation of Apergy from Dover, and the related separation and distribution agreements, any liabilities due from Dover to Apergy are not significant.

3. Revenue 

Effective January 1, 2018, the Company adopted Accounting Standard Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("Topic 606” or “ASC 606”), using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018.
Under Topic 606, a contract with a customer is an agreement which both parties have approved, that creates enforceable rights and obligations, has commercial substance and where payment terms are identified and collectability is probable. Once the Company has entered a contract, it is evaluated to identify performance obligations. For each performance obligation, revenue is recognized as control of promised goods or services transfers to the customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The amount of revenue recognized takes into account variable consideration, such as discounts and volume rebates.
Over 95% of the Company’s performance obligations are recognized at a point in time that relate to the manufacture and sale of a broad range of products and components. Revenue is recognized when control transfers to the customer upon shipment or completion of installation, testing, certification, or other substantive acceptance provisions required under the contract. Less than 5% of the Company’s revenue is recognized over time and relates to the sale of engineered to order equipment or services that have no alternative use and in which the contract specifies the Company has a right to payment for its costs, plus a reasonable margin. 


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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Revenue from contracts with customers is disaggregated by end markets, segments and geographic location, as it best depicts the nature and amount of the Company’s revenue.
The following table presents revenue disaggregated by end market and segment:
Three Months Ended March 31,  
 20192018
Printing & Identification$282,086 $282,522 
Industrials405,105 389,104 
Total Engineered Systems segment687,191 671,626 
Fueling & Transport373,050 319,304 
Pumps177,439 162,309 
Process Solutions152,735 146,485 
Total Fluids segment703,224 628,098 
Refrigeration277,598 278,655 
Food Equipment57,045 59,580 
Total Refrigeration & Food Equipment segment334,643 338,235 
Intra-segment eliminations(301)(288)
Total Consolidated Revenue$1,724,757 $1,637,671 

The following table presents revenue disaggregated by geography based on the location of the Company's customer:
Three Months Ended March 31,  
 20192018
United States$919,892 $853,002 
Europe402,645 387,178 
Asia196,350 194,603 
Other Americas138,118 133,144 
Other67,752 69,744 
Total$1,724,757 $1,637,671 

At March 31, 2019, we estimated that $83.0 million in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. We expect to recognize approximately 65% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through 2020, with the remaining balance to be recognized in 2021 and thereafter.

The following table provides information about contract assets and contract liabilities from contracts with customers:
 March 31, 2019December 31, 2018At Adoption
Contract assets$11,443 $9,330 $11,932 
Contract liabilities - current39,733 36,461 48,268 
Contract liabilities - non-current9,731 9,382 9,916 
The revenue recognized during the three months ended March 31, 2019 and 2018 that was included in the contract liabilities at the beginning of the period amounted to $15,414 and $13,781, respectively.




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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
4. Acquisitions

2019 Acquisitions

On January 25, 2019, the Company acquired the assets of Belanger, Inc. ("Belanger"), a leading full-line car wash equipment manufacturer for $175,083, net of cash acquired. The Belanger acquisition strengthens Dover's position in the vehicle wash business within the Fueling & Transport end market of the Fluids segment. The following presents the preliminary allocation of acquisition cost to the assets acquired and liabilities assumed, based on their estimated fair values:
 
Belanger 
Current assets, net of cash acquired$9,392 
Property, plant and equipment597 
Goodwill97,817 
Intangible assets77,000 
Other assets and deferred charges20 
Current liabilities(9,743)
Net assets acquired$175,083 

The amounts assigned to goodwill and major intangible asset classifications are as follows:
Amount allocatedUseful life (in years)
Goodwill - Tax deductible97,817 na
Customer intangibles54,500 9
Patents16,000 9
Trademarks6,500 15
$174,817 

The goodwill recorded as a result of this acquisition reflects the benefits expected to be derived from product line expansions and operational synergies.

2018 Acquisitions

During the three months ended March 31, 2018, the Company acquired two businesses in separate transactions for total consideration of $68,385, net of cash acquired. These businesses were acquired to complement and expand upon existing operations within the Fluids and Refrigeration & Food Equipment segments. The goodwill recorded as a result of these acquisitions reflects the benefits expected to be derived from product line expansions and operational synergies. The goodwill is non-deductible for U.S. federal income tax purposes for these acquisitions.

On January 2, 2018, the Company acquired 100% of the voting stock of Ettlinger Group ("Ettlinger"), within the Fluids segment for $53,046, net of cash acquired. In connection with this acquisition, the Company recorded goodwill of $36,505 and intangible assets of $20,084, primarily related to customer intangibles. The intangible assets are being amortized over 8 to 15 years.

On January 12, 2018, the Company acquired 100% of the voting stock of Rosario Handel B.V. ("Rosario"), within the Refrigeration & Food Equipment segment for total consideration of $15,339, net of cash acquired. In connection with this acquisition, the Company recorded goodwill of $10,402 and a customer intangible asset of $4,149. The customer intangible asset is being amortized over 10 years.

Pro Forma Information

The following unaudited pro forma information illustrates the impact of 2019 and 2018 acquisitions on the Company’s revenue and earnings from operations for the three months ended March 31, 2019 and 2018, respectively.
 
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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The unaudited pro forma information assumes that the 2019 and 2018 acquisitions had taken place at the beginning of the prior year, 2018 and 2017, respectively. Unaudited pro forma earnings are adjusted to reflect the comparable impact of additional depreciation and amortization expense, net of tax, resulting from the fair value measurement of intangible and tangible assets relating to the year of acquisition.

The unaudited pro forma effects for the three months ended March 31, 2019 and 2018 were as follows:
 Three Months Ended March 31, 
 2019 2018 
Revenue: 
As reported $1,724,757 $1,637,671 
Pro forma 1,728,525 1,651,530 
Earnings from continuing operations: 
As reported $105,705 $109,410 
Pro forma 107,204 111,953 
Basic earnings per share from continuing operations: 
As reported $0.73 $0.71 
Pro forma 0.74 0.72 
Diluted earnings per share from continuing operations: 
As reported $0.72 $0.70 
Pro forma 0.73 0.71 

5. Held for Sale, Disposed and Discontinued Operations

Management evaluates Dover's businesses periodically for their strategic fit within its operations and may from time to time sell or discontinue certain operations for various reasons.

Assets and Liabilities Held for Sale

On March 29, 2019, the Company entered into a definitive agreement to sell Finder Pompe S.r.l ("Finder"), a wholly owned subsidiary, to Gruppo Aturia S.p.A (“Aturia”) for a total consideration of approximately $23,629 net of estimated selling costs. As of March 31, 2019, Finder met the criteria to be classified as held for sale. The Company classified Finder's assets and liabilities separately on the consolidated balance sheet as of March 31, 2019.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The following table presents the assets and liabilities associated with the Finder business classified as held for sale as of March 31, 2019.

 March 31, 2019
Assets Held for Sale  
Accounts receivable, net $12,698 
Inventories 3,693 
Prepaid and other current assets 1,050 
Total current assets17,441 
Property, plant and equipment, net13,596 
Goodwill and intangible assets, net34,524 
Other assets and deferred charges256 
Impairment on assets held for sale(21,607)
Total assets$44,210 
Liabilities Held for Sale  
Accounts payable $7,859 
Other current liabilities 5,088 
Total current liabilities 12,947 
Deferred income taxes 7,011 
Other liabilities 623 
Total liabilities$20,581 

Based on the total consideration from the sale, net of selling costs, the Company recorded a loss on the assets held for sale of  $46,946, in the Condensed Consolidated Statements of Earnings during the three months ended March 31, 2019. The loss was comprised of an impairment on assets held for sale of $21,607 and $25,339 of foreign currency translation losses reclassified out of accumulated other comprehensive losses.  

The Finder business is included in the results of the Fluids segment. The sale does not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation. The sale closed on April 2, 2019. See Note 22 — Subsequent Events for further details on the subsequent completed sale of Finder.

The Company had no assets or liabilities classified as held for sale as of December 31, 2018.

Disposed Operations

There were no dispositions during the three months ended March 31, 2019 and 2018.

Discontinued Operations

There were no discontinued operations as of and for the three months ending March 31, 2019.

In 2018, the Apergy businesses, as discussed in Note 2, met the criteria to be reported as discontinued operations because the spin-off was a strategic shift in business that has a major effect on the Company's operations and financial results. Therefore, the results of discontinued operations for the three months ended March 31, 2018 include the historical results of Apergy prior to its distribution on May 9, 2018. The three months ended March 31, 2018 included costs incurred by Dover to complete the spin-off of Apergy amounting to $11,746, reflected in selling, general and administrative expenses in discontinued operations. See Note 2 — Spin-off of Apergy Corporation for further information.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Summarized results of the Company's discontinued operations are as follows:

 Three Months Ended March 31, 2018 
Revenue$284,041 
Cost of goods and services177,928 
Gross profit106,113 
Selling, general and administrative expenses79,123 
Operating earnings26,990 
Other expense, net 484 
Earnings from discontinued operations before taxes 26,506 
Provision for income taxes 4,481 
Earnings from discontinued operations, net of tax $22,025 

On May 9, 2018, all assets and liabilities of Apergy were spun-off. Therefore, as of March 31, 2019 and December 31, 2018 there were no assets and liabilities classified as discontinued operations.

6. Inventories
 March 31, 2019December 31, 2018
Raw materials$474,204 $439,616 
Work in progress177,544 154,878 
Finished goods288,986 265,722 
Subtotal940,734 860,216 
Less reserves(112,436)(111,420)
Total$828,298 $748,796 

7. Property, Plant and Equipment, net
 March 31, 2019December 31, 2018
Land $49,834 $53,623 
Buildings and improvements 518,238 529,982 
Machinery, equipment and other 1,589,863 1,555,345 
Property, plant and equipment, gross2,157,935 2,138,950 
Accumulated depreciation (1,360,253)(1,332,453)
Property, plant and equipment, net$797,682 $806,497 

Depreciation expense totaled $32,188 and $32,164 for the three months ended March 31, 2019 and 2018, respectively.
 
8. Leases
The Company adopted ASC Topic 842 - Leases as of January 1, 2019, using the transition method per ASU No. 2018-11 issued on July 2018 wherein entities were allowed to initially apply the new leases standard at adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Accordingly, all periods prior to January 1, 2019 were presented in accordance with the previous ASC Topic 840, Leases, and no retrospective adjustments were made to the comparative periods presented. Adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease right-of-use assets ("ROU") and operating lease liabilities of approximately $163 million, as of January 1, 2019. Finance leases were not impacted by the adoption of ASC 842, as finance lease liabilities and the corresponding ROU assets were already recorded in the balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s Consolidated Statements of Earnings or Cash Flows.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The Company has operating and finance leases for corporate offices, manufacturing plants, research and development facilities, shared services facilities, vehicle fleets and certain office and manufacturing equipment. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities. These are expensed as incurred and recorded as variable lease expense. 

The Company determines if an arrangement is a lease at inception of a contract. Operating lease ROU assets are included in other assets and deferred charges and operating lease liabilities are included in other accrued expenses and other liabilities in the Consolidated Balance Sheet. Finance lease ROU assets are included in property and equipment, and the related lease liabilities are included in other accrued expenses and other liabilities in the Consolidated Balance Sheet.

ROU assets represent the Company's right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company's lease term include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. ROU assets also include any advance lease payments made and exclude lease incentives. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Finance lease agreements generally include an interest rate that is used to determine the present value of future lease payments. Operating fixed lease expense and finance lease depreciation expense are recognized on a straight-line basis over the lease term.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The components of lease costs were as follows:
 Three Months Ended March 31, 2019
Operating Lease Costs:
Fixed$12,244 
Variable2,047 
Short-term 4,865 
Total*$19,156 
* Finance lease cost and sublease income were immaterial.
Supplemental cash flow information were as follows:
 Three Months Ended March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$12,414 
Operating cash flows from finance leases108 
Financing cash flows from finance leases409 
Total$12,931 
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases10,708 
Finance leases37 
Total$10,745 

Supplemental balance sheet information related to leases were as follows:
 March 31, 2019
Operating Leases:
Right of use assets:
Other assets and deferred charges$154,562 
Lease liabilities:
Other accrued expenses$43,247 
Other liabilities118,783 
Total operating lease liabilities$162,030 
Finance Leases:
Right of use assets:
 Property, plant and equipment, net (1)
$11,856 
Lease liabilities:
Other accrued expenses$1,526 
Other liabilities8,350 
Total financing lease liabilities$9,876 
(1) Finance lease assets are recorded net of accumulated depreciation of $909.

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The aggregate future lease payments for operating and finance leases as of March 31, 2019 were as follows:
 OperatingFinance
2019 (excluding the three months ending March 31, 2019) $37,090 $1,425 
202039,237 1,881 
202129,666 1,793 
202221,329 1,608 
202313,544 1,204 
Thereafter42,182 4,040 
Total lease payments183,048 11,951 
Less: Interest(21,018)(2,075)
Present value of lease liabilities$162,030 $9,876 

The aggregate future lease payments for operating and capital leases as of December 31, 2018 are as follows:
 OperatingCapital
2019$49,009 $1,802 
202038,620 1,748 
202129,396 1,687 
202221,767 1,392 
202313,994 952 
Thereafter42,087 3,802 
Total$194,873 $11,383 

Average lease terms and discount rates were as follows:
 March 31, 2019
Weighted-average remaining lease term (years)
Operating leases5.8
Finance leases6.4
Weighted-average discount rate
Operating leases3.3 
Finance leases4.4 

9. Goodwill and Other Intangible Assets
 
The changes in the carrying value of goodwill by reportable operating segments were as follows:
 Engineered SystemsFluidsRefrigeration & Food EquipmentTotal
Balance at December 31, 2018$1,623,660 $1,507,602 $546,066 $3,677,328 
Acquisitions 97,817  97,817 
Held for sale (4,739) (4,739)
Foreign currency translation(1,460)8,386 (55)6,871 
Balance at March 31, 2019$1,622,200