Summary
Dover Corporation (DOV) has filed an 8-K report on June 30, 2022, primarily to disclose a change in how its management measures segment profit and loss. The company has updated its definition of "segment earnings" to exclude purchase accounting expenses, restructuring costs, gains/losses on dispositions, and other specific items. This revised measure, which is now the primary internal metric for evaluating segment performance and allocating resources, is intended to provide a clearer view of operating results over time and align with management's ongoing business assessments.
Key Highlights
- 1Dover Corporation is changing its internal measure for segment profit/loss to "segment earnings".
- 2The new definition of "segment earnings" excludes purchase accounting expenses, restructuring costs, gains/losses on dispositions, and other specific items.
- 3This change is solely for internal performance evaluation and resource allocation, not for revising past consolidated financial statements.
- 4The company is providing historical "segment earnings" data for 2019, 2020, 2021, and year-to-date 2022 as an exhibit (Exhibit 99.1).
- 5This is a change in disclosure and reporting metric, not a restatement of historical financial results.
- 6The change aims to better assess operating results and align with management's evaluation methods.
Frequently Asked Questions
The main purpose of this filing is to inform investors and the public that Dover Corporation has changed the internal metric management uses to measure segment profit and loss. This new metric is called 'segment earnings' and is used for evaluating segment performance and allocating resources.
Previously, management used 'segment earnings (EBIT)' which excluded corporate expenses, interest, and taxes. The new "segment earnings" definition is broader, excluding these items plus purchase accounting expenses, restructuring and other costs/benefits, and gains/losses on dispositions. The company states this revised measure better assesses operating results over time.
No, the company explicitly states that this change affects only the manner in which segment results are reported internally and does not revise its consolidated financial statements for any previously reported period.
Dover has attached Exhibit 99.1 to this 8-K filing. This exhibit provides annual unaudited financial information reflecting the company's segment earnings for the full years 2019, 2020, and 2021, as well as quarterly information for 2019, 2020, 2021, and year-to-date 2022.