Paul Goldberg – VP, IR Bob Livingston – President and CEO Brad Cerepak – SVP and CFO.

Julian Mitchell – Credit Suisse Joe Ritchie – Goldman Sachs Nigel Coe – Morgan Stanley Shannon O’Callaghan – Nomura Jeff Sprague – Vertical Research Partners John Inch – Deutsche Bank Nathan Jones – Stifel Jamie Sullivan – RBC Capital Markets Charlie Brady – BMO Capital Markets Deane Dray – Citi Walter Liptak – Global Hunter.

Good morning, and welcome to the First Quarter 2014 Dover Corporation Earnings Conference Call. With us today are Bob Livingston, President and Chief Executive Officer; Brad Cerepak, Senior Vice President and CFO; and Paul Goldberg, Vice President of Investor Relations. After the speakers’ opening remarks, there will be a question-and-answer period.

(Operator Instructions). As a reminder, ladies and gentlemen, this conference call is being recorded and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Mr. Paul Goldberg. Mr. Goldberg, please go ahead, sir..

Thank you, Jackie. Good morning and welcome to Dover’s first quarter earnings call. Today’s call will begin with some comments from Bob and Brad on Dover’s first quarter operating and financial performance and follow with an update of our 2014 outlook. We will then open up the call to questions.

As a courtesy, we kindly ask that you limit yourself to one question with a follow-up. Please note that our current earnings presentation Form 10-Q, investor supplement can all be found on our website, www.dovercorporation.com.

This call will be available for playback through May 1 and the audio portion of this call will be archived on our website for 3 months. The replay telephone number is 800-585-8367. When accessing the playback, you’ll need to supply the following access code 22393135.

Before we get started, I’d like to remind everyone that our comments today, which are intended to supplement your understanding of Dover, may contain certain forward-looking statements that are inherently subject to uncertainties.

We caution everyone to be guided in their analysis of Dover by referring to our Forms 10-K and 10-Q for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statement. Also, we undertake no obligation to publicly update or revise any forward-looking statements except as required by law.

We would also direct your attention to our website, where considerably more information can be found. And with that, I’d like to turn the call over to Bob..

Thanks, Paul. Good morning, everyone, and thank you for joining us for this morning’s conference call. Our first quarter results were highlighted by strong revenue growth, broad-based bookings growth and building momentum as we through the quarter. Most notable, fluids delivered 26% growth and Engineered Systems grew 7%.

In all, we generated 7% revenue growth and grew EPS 9%. From a geographic perspective, our U.S. markets were strong. Our European markets continued to show improvement for the third consecutive quarter. Lastly, our China markets moderated sequentially. Now, let me share some specific comments on the quarter.

In Energy, we continued to benefit from improving well activity and a modestly increased rig count, especially in the U.S. We should continue to see broad-based growth as the year unfolds driven by increased well completion. Our bearings and compression markets were very solid and should remain so for the balance of the year.

Overall Energy’s results were in line with our expectations going into the quarter. Within our Engineered Systems segment, we saw strong growth across both platforms. In our Printing & Identification platform, solid growth in both our fast moving consumer goods and industrial markets, complimented by acquisitions resulted in strong performance.

The industrial platform also saw a broad-based revenue growth led by outstanding results and our waste handling and vehicle service markets. Our fluids segment outperformed, where our recent acquisitions plus healthy market conditions were both pumps and fluid transfer resulted in very solid revenue growth.

Our pumps businesses are benefiting from strong demand in the plastics and petrochemical verticals. And first quarter results were boosted by strong project shipments into these markets.

Our refrigeration and food equipment segment results were solid, though slightly below last year and our expectations, is the timing of customer projects impacted the quarter. Our bookings were very strong, giving us confidence in this segment’s growth plan for the full year.

Across the segment our customers continue to seek our productivity, energy efficiency and merchandizing solutions that enable them to better compete in their markets. In all, we were pleased with the start of the year. Business activity was strong and we executed well in our strategy.

We continue to focus on growth through international expansion and acquisitions. The most notable initiatives were adding resources for artificial lift in Australia and the Middle East and the acquisition of companies in the digital print space.

Regarding near-term business activity, we expect ongoing solid performance in Energy, driven by the continuing increase in well activity, continued growth in Engineered Systems driven by improved U.S. industrial trends and expanded global sales and service resources in Printing & Identification.

Strong results in our fluid markets are the benefits of our recent acquisitions and generally helping global end markets. And greatly improve sequential results in our refrigeration and food equipment markets. Beyond these near-term trends, macro-trends such as improving U.S.

industrial activity and the continuing recovery in Europe will also help drive growth given our geographic business mix. In addition to an improving macro-environment, we have ample opportunity to improve margin. We are working to drive synergies on our recent acquisitions and are increasing lean and productivity projects.

As a result, we do expect stronger margin in the back half of the year as we continue to execute on these plans. Our pipeline remains active and we are working on several small to medium sized deals. In summary, I’m very pleased with our results.

The combination of a strong first quarter, growing bookings and backlog and our positioning with customers, give me great confidence that we will have an outstanding year. With that, let me turn it over to Brad..

Thanks, Bob, good morning everyone. Let’s start on slide 3 of our presentation deck. Today we reported first quarter revenue of $1.9 billion, an increase of 7%. Organic revenue grew 4% and growth from acquisitions was 3%. Adjusted EPS was $1.1, an increase of 9. Segment margin for the quarter was 16.7%, a 40-basis point decrease from last year.

This result reflects solid execution in our core business and was in line with our expectations. Margin was impacted by recent acquisitions in three of our four segments and in all, had a 70-basis point impact in the quarter. Bookings increased 5% over the prior year period to $2 billion.

This result represents 20% growth in fluids, and 11% growth in Engineered Systems. Bookings increased 2% in refrigeration and food equipment. Energy bookings decreased 7% primarily driven by tough comps on a large international artificial lift project. Adjusting for this project, Energy bookings increased 5%.

Overall, book to bill finished at 1.98, which is in line with seasonal trends. Backlog increased 7% to $1.5 billion. Now turning to slide 4. Fluids grew 14% organically driven by strong markets and project related activities in plastics and petrochemical. Energy grew 4% on the strength of drilling activity.

Engineered Systems also grew 4% with broad-based growth across both platforms. Refrigeration and food equipment declined 3% largely the result of project timing with our customers. Overall organic revenue growth was 4%. Acquisition growth in the quarter was 3%, comprised of 11% in fluids, 3% Engineered Systems, and 1% in Energy.

Now turning to slide 5 on our sequential results. Revenue was essentially unchanged from the fourth quarter where strong sequential growth of 5% in energy was largely offset by a 4% decrease in refrigeration and food equipment. Sequential bookings grew 8% largely in line with our normal seasonal pattern as all segment showed growth.

Engineered Systems bookings growth was 11% broad-based across both platforms. And refrigeration and food equipments increased 10% driven by normal seasonality in our refrigeration markets. Energy bookings increased 9%, with growth in all end markets. Lastly, fluids bookings were up 3%. Now on slide 6.

Energy revenue of $479 million increased 4% in earnings of $119 million were unchanged. Energy produced another solid quarter with revenue growth in both our drilling and production in bearings and compression end markets.

Within drilling and production, growth was driven by improving well activity, especially Shale related, though partially offset by weak winch markets. Operating margin of 24.8% was down 90 basis points from last year, in line with our expectations. Bookings were $478 million, a 7% decrease from the prior year.

Solid growth in bearings and compression was offset by tough comps in drilling and production, principally reflecting lumpy orders related to a large international artificial lift project. As reported, book to bill was one. Adjusting for this project, book to bill was 1.04 representing 5% growth. Now turning to slide 7.

Engineered Systems had an excellent quarter, where sales increased 7% to $650 million and earnings of $92 million were up 11%. Our Printing & Identification platform revenue increased 11% to $264 million, driven by broad-based organic growth of 5% in recent acquisitions.

In the industrial platform, revenue grew 5% to $386 million reflecting 4% organic growth. Our waste handling and vehicle service markets were particularly strong in this platform. Continued strong execution and cost reduction activities drove operating margin to 14.2%, up 40 basis points, reflecting solid leverage on volume.

Bookings were $710 million, an increase of 11%. Our Printing & Identification bookings increased 19% to $283 million boosted by recent acquisitions and strong execution in the U.S. and China. Industrial bookings increased 5% to $428 million reflecting broad-based growth.

Book to bill for Printing & Identification was 1.07, while industrials was a strong 1.11. Overall, segment book to bill was 1.09. Now on slide 8. Fluids posted an excellent quarter, where sales increased 26% to $345 million and earnings of $58 million were up 22%.

Revenue was driven by strong organic growth of 14% across the segment with particular strength in our oil and gas and plastics and petrochemical end-markets. Our five recent acquisitions, contributed 11% growth. Segment margin was 16.8%, a decrease of 60 basis points from the prior year.

Recent acquisitions aside, our core business performed extremely well in the quarter and achieved 20% margin on strong volume leverage. We expect overall segment margin to improve in the coming quarters, as we progress on the integration of these recently acquired companies.

Bookings were $363 million, an increase of 20% driven by continued solid demand across most end markets and recent acquisitions. Book to bill was a solid 1.05. Now, let’s turn to slide 9. Refrigeration and food equipment generated revenue of $411 million down 3% from the prior year and earnings of $45 million, a decrease of 14%.

Revenue was impacted by the timing of orders in both refrigeration and food equipment markets especially early in the quarter. As the quarter progressed, refrigeration shipments began to accelerate. We expect that momentum to continue into the seasonally strong second quarter. Operating margin decreased 140 basis points to 10.9%.

This result reflects good execution on lower volume and $5 million of one-time items in the prior year. Bookings were $494 million, an increase of 2%. Book to bill ended at a seasonally strong 1.20. Now going to the overview slide on page 10. First quarter net interest expense was $33 million, up $2 million from last year and in line with expectations.

Corporate expense decreased $3 million to $31 million, largely reflecting reduced pension expense. Our first quarter tax rate was 30.7% excluding discrete tax benefits, in line with our prior forecast. Capital expenditures were $33 million in the quarter.

Lastly, we repurchased 3.6 million shares for approximately $293 million in the quarter, completing our $1 billion program. Moving to slide 11. Our guidance remains unchanged. We continue to expect 2014 organic revenue growth to be broad-based at 3% to 4% with all segments prior forecast on track for the year. Completed acquisitions will add 3%.

In total, we expect full year revenue growth of 6% to 7% and segment margin to be about 18%. Corporate expense will be about $123 million, interest expense remained $133 million. Our full year tax rate is anticipated to be around 31%. CapEx should be about 2.5% of revenue and we expect our free cash flow will be approximately 11% of revenue.

Now, turning to the bridge on slide 12. The bridge is largely consistent with our last forecast. We’ve increased acquisition slightly to reflect our recent activity. We have also made minor adjustments in a few other categories, now that we have a quarter of accruals (ph) behind us. In total, we expect 2014 EPS to be $4.60 to $4.80.

This represents 9% growth at the midpoint. With that, I’ll turn the call back over to Bob, for some final thoughts..

Thanks, Brad. 2014 is off to an excellent start. We delivered solid revenue and earnings growth, and also saw strong quarter activity. Overall, I like our positioning and our serve to markets, and we continue to execute on our growth initiatives. Some of which are within our Energy segment, you’ll see the continuing push to grow outside the U.S.

especially in artificial lift. We also have ample opportunity to grow our core business by expanding our presence in faster growing basins, and increasing our application coverage in bearings and compression.

In Engineered Systems, we plan on expanding our verticals served in Printing & Identification beyond our core fast moving consumer goods and industrial markets. Our strategy in the industrial platform is all about delivering customer productivity solutions.

The focus is on reducing labor, improving safety and ultimately allowing our customers to compete more effectively. Fluids, has a large opportunity to expand into international markets and is targeting significant growth in markets outside North America and Europe.

In addition, fluids intends to push their station in a box, retail fueling solution, expand our hygienic pump presence and pursue cross-selling opportunities into the North American plastics and oil and gas markets.

In refrigeration and food equipment, we are pursuing a growth strategy that targets our customers’ needs for productivity, energy efficiency and enhanced merchandizing systems to drive performance.

As an example, we launched a reengineered refrigeration door package, which will provide an even faster payback to our customers on close the case projects. In addition, several of our businesses are releasing new products, especially in food equipment, which will enable us to expand on our already strong positions.

In all, I am more confident than ever about our positioning and long-term prospects. In closing, I’d like to thank our entire Dover team for their continued focus on serving our customers and driving results. With that Paul, let’s take some questions..

Thanks, Bob. (Operator Instructions).

And Jackie, if we can have the first question?.

Our first question comes from the lines of Julian Mitchell with Credit Suisse..

Hi, good morning..

Good morning..

Good morning, Julian..

Good morning. I just had a question on refrigeration and food equipment. You had margins down a fair amount in Q1. But at the same time, you talked about sales trends improving in recent months. So, I just wondered how comfortable you were with the outlook for a sort of a flattish margin for the full year in that segment..

Actually, the order activity in refrigeration and food equipment was quite healthy in the first quarter. And Julian, as we look at the second quarter, second quarter starts this, I call it the middle of the year, a seasonal ramp especially for Hill Phoenix. And I would tell you that we are very, very well loaded at Hill Phoenix for the second quarter.

And I feel pretty confident on their plan, both on revenue and margins for the year. Your specific question about margins in the first quarter, if you were to back out and Brad commented on this in his script, if you were to back out of the first quarter of last year, I think it’s the $5 million of one-time net gains.

The first quarter margins are pretty similar to last year. And we feel very good about our plan here in the segment for the year..

Got it, thanks. And then within, just my follow-up is on the Energy business. You talked on the last call about some weakness in the sucker rods in parts of the U.S.

I just wanted to check if that weakness is all kind abated now? And how you’re feeling about your sort of forecast for the year on energy in terms of the rig count?.

Okay. So, you’ve got two questions here, rig count and sucker rod activity. Sucker activity here in the U.S. recovered nicely. And I don’t know what the growth rate is year-over-year or sequentially that’s going to get into some detail here. But we were quite pleased with the artificial lift activity in the U.S.

especially around sucker rods in the first quarter. Rig count, we came into the year looking at a rig count average for the U.S. of I think it was 1,760 some units, essentially flat with the average for 2013. It’s been up a bit and I call it the second half of the first quarter, and coming into April, up above our expectations for that period.

We’ve actually raised our average now for the year to almost 1,800 units, about 2% increase. And we’re feeling pretty positive about the energy outlook for the balance of the year..

Great. Thank you..

Our next question comes from the line of Joe Ritchie with Goldman Sachs..

Hi, Joe..

Good morning..

Hi, well, my first question is on fluids. If I heard you correctly I think the organic growth for the quarter was 14% and it was driven predominantly by petrochem and plastics growth. But then your guidance for the year is 4% to 5% organic growth. And so it clearly implies a pretty significant step down.

And so, just help me understand that a little bit?.

I think you just summarized it very well Joe. We had a great first quarter. The organic growth rate as you said was 14%, don’t expect that from us in the second, third and fourth quarters. I think that the balance of the year is going to be a little bit closer to our guidance for the year.

I would tell you that their performance in their first quarter on revenue and supported by the booking activity in the first quarter would perhaps want to see us increase our forecast for the year. And I’m reluctant to do that at this point in time.

I’d like to see how the order rates develop here through the first half or at least April and May here in the second quarter. But obviously with that first quarter performance, we feel quite bullish on fluids for the year..

All right, that’s helpful there. And just a follow-up on bookings, you had a good quarter, I think the book to bill was 1.09.

Was there any impact for that book to bill from the acquisitions that came through this quarter or is that an organic book to bill?.

No, that includes the acquisition that includes the acquisition activity from 2013. I actually hear right now Joe, I do not know what the organic book to bill was..

Okay. I can follow-up with Paul on that one..

Yes..

And I guess, one last question. Really I guess on free cash flow, it seems like Q1 tends to be seasonally pretty well quarter, it seems fairly weak this quarter. You guys did not change the guidance.

I’m just kind of thinking about your free cash flow generation now as a standalone entity and how I should think of that moving forward, it’s just a 11% of sales, the right way to think of free cash flow over the long term for you guys or perhaps some color there would be very helpful?.

Yes, well, we agree with you the first quarter was little bit lower than I think we would have expected going into the year. But that doesn’t change our views about the cash generation of the portfolio in the company. We do see sometimes impacts as revenue ramps up, ramps down, you’ll see that through into the second quarter for normal seasonality.

But we feel very confident with the 11% for the year. If you look at our profile, our profile is a company that generates most of the cash from the tail end of the year, that’s just way the second and third quarter is usually setup and the fourth quarter being lower than those. And a high collection type of period for us.

In the long run we feel confident on that 11% number..

Okay, great. I’ll get back in queue. Thank you..

Our next question comes from the line of Nigel Coe with Morgan Stanley..

Thanks, good morning..

Good morning, Nigel..

Yes. So, just going back to the book to bill ratio, if 1.2 for refrigeration very strong. I mean, obviously it’s here with about 1 in 1Q but just in terms of some loan refrigeration on the new basis, 1.2.

Would you say that’s normal or would we say that’s actually better than what you normally see?.

Maybe a bit better than the average. But let me share something else with you, Nigel. And I don’t have this on all of the businesses, but I tend to watch this one pretty closely here in the first quarter. Book to bill for Hill Phoenix, all in, all of it for Hill Phoenix was a very healthy 1.3 in the first quarter.

And that, I share that data point with you and others because my comment and my script was at least, we feel very, very confident about our upcoming – we’re into it now. Our seasonal ramp here with Hill Phoenix in the second and third quarters. We see some nice things happening at this business..

So, does that mean that some of these retail projects that have been pushed, that were pushed in the second half of the year, are coming through. And what does that – is there a read here for the board of U.S.

economy in your view?.

Well, I would, if you wanted a read on the U.S. economy across the Dover business profile, I would probably point more to our industrial businesses rather than the retail grocery activity.

Your comment, your question here about some of the project referrals, Nigel, these were fairly modest, I’m talking $7 million, $8 million or $9 million of business activity that we would have expected in the first quarter has been shifted to either second or third quarter, it’s actually a rather modest number..

Okay, okay. And then just wanted to come back to the comment on fluids margins of 20% plus acquisitions, I believe that 1Q seems to be your lowest margin quarter from your perspective 1Q and 4Q, the 2Q, 3Q better.

So, I’m actually wondering?.

I could work with that..

Yeah.

Once we get beyond this M&A dilution, can you think the 20% plus is a good run rate for maybe 3Q, 4Q?.

Well, I think I’ve even commented on this in the January call Nigel, when we gave our initial guidance. We still have, we still have a target for the year of about 18% margins.

The second half is going to be stronger than the first half, the first half is truly taking some of the, I call it the headwind from the early days and the integration cost of some of our recent acquisitions.

But it’s also carrying some of the weight of a couple or three large I call them productivity projects that we’ve launched in the second half of last year. And are really in, I call it the execution mode here in the first half. And that’s around Energy being one and refrigeration and food equipment being the second one.

But we remain quite confident with our second half outlook on an up-tick in margins..

Okay. Thank you very much..

Our next question comes from the line of Shannon O’Callaghan with Nomura..

Good morning, guys..

Hi, Shannon..

Hi, maybe just one quick follow-up on that I mean, on this acquisition impact, I mean, how much of that in the fluid margins is sort of permanent acquisition cost that’s going to just remain in terms of amortization or otherwise, in terms of those GAAP to the 20%?.

Oh my goodness, you’re good again to the detail here. I’m going to have to defer to Brad. Brad shared with you in his comments that absent to the acquisition activity in fluids, operating margins were 20%. I wouldn’t label, I would not label 20% as non-sustainable or unsustainable with respect to the core business.

Now, the acquisitions we’ve made out, what is it, four or five in this segment, just in the last nine or actually in the last six months. Each one of them is a little bit different.

The profile of each is different and the timeline of moving those recent acquisitions to the point where they are either neutral or perhaps even accretive to second margins, it’s a little bit different. But we did increase obviously..

Yeah, so maybe another way to answer because I don’t have that data with me is that, the acquisitions in the first quarter specific to the total company and in fluids was dilutive to our EPS. And as we’ve stepped through the year, it becomes accretive.

And you saw on our bridge that we expect to have $0.05 to $0.07 of performance out of those acquisitions. The key point is that, the integration is going to take some time. And I would think in the fluids business, we won’t see the margins come up to more our level or our standard until ‘15..

Until ‘15, yes..

So there will be a drag on those margins through the whole year..

Okay.

In Printing & ID, I mean, do you have the organic revenue and order numbers for Printing & ID and just also maybe a little color on how you think you’re doing after you’ve kind of reinvested in some of the product portfolio there?.

Okay. Organic for Printing & ID for quarter one was 4%. Actually I would share with you to me the real success story in Printing & ID in the first quarter was Mark Mommage (ph). And now that I share with you that organic growth at Mark Mommage (ph) in the first quarter was quite healthy, 6%..

Okay..

And we were quite pleased to see where it came from. We had some nice road at Mark Mommage (ph) in the first quarter in the U.S. market and the China market as well as South America. We continue to see the strength in Europe that we have seen over the past couple of quarters at Mark Mommage (ph).

But the results in the first quarter were really led by China and the U.S..

Yes, Shannon, just to be clear. In Printing & ID, the organic growth was 5% in the industrial platform the organic growth was 4%. There was a little bit of lack in there too but that was the pure organic growth numbers..

And then, Paul, do you happen to have any order organic number?.

I don’t have that right now but I’ll have it when we talk later..

Okay. Thanks a lot guys..

Our next question comes from the line of Jeff Sprague with Vertical Research Partners..

Thank you. Good morning, gentlemen..

Hi Jeff..

Hi Jeff..

Bob, I wonder if you could just address kind of managerial bandwidth now on the M&A front.

For example, if I think about what’s going on in fluid? Are those guys kind of full up on what they can handle for a year or two or are you still comfortable doing deals in there or should we expect kind of your activity would be oriented somewhere else in the portfolio?.

Well, our pipeline is fairly well spread among the segments. But Jeff, included in our pipeline, we’ve got some deals that we are pursuing in the fluids segment.

The acquisition activity were smaller ones, but the acquisition activity in fluids over the last six months or so, have actually been fairly well split between our pumps businesses and our fluid transfer businesses. It’s not all with one management team. And we do have more bandwidth for acquisitions..

All right. And we should expect you to kind of modulate between share repurchase in deals this year depending on the case at which deals materialize.

Is that a fair statement?.

That’s a fair statement..

And then I guess, finally from me, could you just interest pricing in Hill Phoenix if you said anything I missed it.

But with this piece of order activity, is there actually some positive price in the business and to what extent?.

My comment wouldn’t even just be restricted to Hill Phoenix, Jeff. I would tell you that sort of across the board for Dover, I would label pricing as pretty gone neutral..

Okay, neutral overall..

Neutral overall..

Okay, thank you..

Including with Hill Phoenix, but if I say if that would be a fairly standard comment that we would use with all four segments..

Okay, thank you, Bob..

(Operator Instructions). Thank you. Our next question comes from the line of John Inch with Deutsche Bank..

Thank you. Good morning everyone..

Hi, John..

Good morning, John..

And by the way, just as a follow-up on the pricing point.

Would that apply to the backlog as well, was there any discernible price notation in the backlog within any of the segments or any?.

No concern on pricing, John..

Okay. Probably mentioned Mark Mommage (ph) in China was good. What moderated in China, because it seems that what’s happening in China, it’s less about macro and it’s more company specific, some better, some are worse.

Could you provide a little more color on what you see there?.

I don’t remember this I don’t remember our organic growth rate in China. I know that our all-in growth rate in China was I think 6% for the quarter. Well, still pretty healthy, but for us it’s a bit of moderation.

And I would tell you that when we define it as a bit of a moderation we’re going to describe some project shipments on food equipment, especially around some of our can making equipment that was absent in the first quarter. And we saw some nice activity in that business area in 2013.

If you look at the other businesses that are quite active for us in China, be it Mark Mommage (ph), be it some of our fluid businesses, activity was pretty solid..

That makes sense. Bob, I think you were at a conference recently, you mentioned that Energy and refrigeration could outperform your organic growth targets. The Energy makes sense but what about refrigeration, I realize you made earlier comments this call, that you see a better sort of line of sight to improvement as the year progresses.

But we are down sort of, we have a pretty low start for the year.

Can you just maybe add to why – what’s your confidence there?.

Okay. Well, don’t – I would caution you to not overreact to a negative revenue comp number for the first quarter for this segment, we’ve seen that before. And that’s – it’s not unusual. The – I look at energy and I see the rig count and drilling activity, especially in the U.S.

being a little bit healthier and stronger than we had embedded in our forecast and our guidance in the beginning of the year. And that gives me a little bit of confidence that maybe there is a tailwind against behind our forecast for the year there than we had believed was there at the beginning of the year.

And our refrigeration and food equipment segment, I’m going to tell you just, let’s see how the second quarter unfolds here. We are watching pretty closely our order rates. And I’ll repeat myself, I feel very bullish on their opportunities for 2014..

Yes, that’s fair. One final one from me, the drivers of energy, globally seemed pretty good artificial lift, Middle East, the well count that you described. I think actually there is a perception that your Energy margins, admittedly are sure very robust and very healthy but they’re not, they just don’t have a ton of upside.

Why again is that the case, if you’ve got really solid organic growth coming through, is it – just remind us as next is it reinvestment back into the business, because I know you’re restructuring it nor as to get some cost benefit? Why just big picture, Bob or Brad, your Energy margins is not going higher over it’s not?.

Brad could probably give you a more detailed response that I’m prepared to give you.

But I think we’ve been sharing this message around margins with the Energy business for goodness, at least 18 months now that we’ve got plenty of opportunity and we pursue these opportunities to increase our operating margins within the segment at the individual businesses.

We will see some noise from quarter to quarter or from period to period based upon product mix. But we continue to have opportunities to increase the margins. We are flowing a significant part of that margin improvement back into, I call it people investment and geographic growth initiatives within Energy.

And John, you’ll see us continue to do that for the next couple of years..

Okay. Thanks very much guys..

Our next question comes from the line of Nathan Jones with Stifel..

Good morning, Bob, Brad, Paul..

Good morning..

Hi Nathan..

If we could go back to I think Bob in your prepared remarks you talked about new product releases in food equipment.

I’m wondering if you could give us some more color on what they are – what the timing of that’s likely to be and when you think will have a positive impact on results?.

Within unified brands, again this is it, the food equipment space, not in the refrigeration space, within unified brands, we’ve got two that I – two different product launches I can think of sitting here that roll out this year that are both for the fast food restaurant activity.

And on I would tell you, one of them we’ve actually – we actually believe we’d want a $12 million order placement, it won’t flow through this year but will see the beginning of this order flow here in the second half. And it’s a pretty positive impact on unified brands..

Great.

And just on the productive projects that you talked about in Energy and food equipment, is there any quantification you can give us for that? And is this something that would be unusually large endeavor or is this just something that it’s part of their regular cause of doing business actually?.

Well, I wouldn’t label the benefit of the projects to be unusually large for us. The projects themselves were probably a little bit larger in scope than what we’ve seen over the last couple of years. But I think I’ve shared this at least on one or two other calls, here in recent quarters.

And one of the big projects was a new facility construction in the Houston area for our energy segment that will be the primary location for one of the businesses in Energy. But it will also, it will also house the Houston operations of three or four other Dover businesses.

And the project, by the time we finish it, we end up reducing roof count in the area I think by four or five roof counts. We’ve done a similar project with in refrigeration especially around Hill Phoenix. And again a large building project in the Atlantic area. It’s complete we’re starting to occupy the facility now.

And when the project is complete it will be the primary location for the systems business of Hill Phoenix, the East Coast operations for Anthony and the assured Roman headquarters for one of the other businesses in that segment.

Again the project scope on both of them is a little bit larger than we typically see within Dover, the benefits I don’t remember the exact benefits on both of them. But we’re looking at I think in the range of $2 million to $3 million, $4 million of annual benefits on each of the projects..

Great. Thanks very much..

Our next question comes from the line of Jamie Sullivan with RBC Capital Markets..

Good morning..

Good morning, thanks. Just on Energy, maybe you can just talk about, you talked about the large order last year in 1Q.

Are there other orders that we should think about that happened in 2013 as we looked at the comps? And Bob, I think you talked about the potential for some large orders in Australia, I mean, at some point this year, maybe your confidence there as well?.

This question is specific to the energy segment?.

Correct..

Okay. So, Brad commented on the large order we had for Australia that we booked in the first quarter of last year. And Brad, you’re going to have to help me. I think that order in the first quarter of last year was $60 million. But there was a second order last year for the Australian lift project that I think occurred like July, third quarter activity.

I have to confess, I really don’t remember the size of that order but I think it was about $40 million. And if you look at the activity for 2014, specific to this – for this Australian project, the next large order award is anticipated to be made in the latter part of this year. We think it’s going to be in the fourth quarter.

And we were – we think our performance is well and some of the people investments we’ve made here in the first quarter have continued to position us quite well to continue to serve that customer..

Yes. I would just add to that, just an observation that the orders are lumpy but the sales are very steady..

That’s true..

For sure, yes..

Thanks. And then, maybe just a follow-on with capital allocation, I think you mentioned that there could be some balance between buyback and M&A.

Is that going to be more opportunistic or should we expect kind of an ongoing program with buyback?.

Yes, okay. Look, I think we’d probably give you a little bit more definitive guidance here on share repurchase activity as we get through the second quarter, understand how the pipeline or acquisition pipeline will develop and execute this year.

But don’t lose sight of the fact that we do have an open and outstanding share repurchase authorization as we sit here today. We did complete the $1 billion program in the first quarter. But our open authorization as we sit here today is just a shade under 4 million shares.

You’ll see us use that during the year to keep the existing share count flat if not tweak it down a bit. But that’s how we normally manage that. Anything beyond that activity, I think you’ve got to wait for us to see how the acquisition pipeline develops over the next three or four months..

Thanks.

And that’s not – you’re not assuming future buybacks on the guidance correct?.

Correct. We are not assuming future buybacks. We do know how the weighted average will flow through the year. We’ll naturally take down the share count throughout the year, having completed the $1 billion buyback in the first quarter. That’s just simple averaging..

Thank you..

Our next question comes from the line of Charlie Brady with BMO Capital Markets..

Hi, good morning guys..

Hi, Charlie..

I don’t know if I missed or not, but on the Energy side, did you give the bookings broken out by the drilling production and the bearings business?.

No, we did not give that. And my goodness, don’t ask me for that, I don’t have..

Okay, fair enough. It’s some on the fluids business, I mean, in your prepared remarks you talked about some of the growth opportunities and expansion that was going on. It sounded as though that was a fairly significant focus, I mean, maybe more than it’s been previously to my recollection.

Is that – are you focusing on organic there or is that going to be primarily done by M&A or is it split fairly even?.

No, the comment that I had in my closing remarks about the focus on growing fluids significant growth outside of Europe and North America, that comment is based upon our existing product portfolios, within that segment today..

Okay..

And keep in mind that the five acquisitions we did in that space are all international deals that we did and we completed that..

And a key part of this..

And a key part of our drive for more international growth..

Okay. And then just, one more on your comment on M&A.

Can you just remind us when you would find small, medium sized deals kind of what range you’re looking at within those buckets?.

Well, let’s just put it this way. I would define the top end of a medium sized deal could be $250 million or $300 million..

Great. Thanks..

Our next question comes from the line of Deane Dray with Citi..

Thank you, good morning everyone..

Hi Deane..

Good morning..

In the following the no-spin, can you comment on any stranded cost and then what are you thinking about in terms of any other portfolio cleanups that might be next in priority?.

Okay. Let me take the first one..

Brad can handle stranded cost..

Well, we’ve commented on this in the past. And I would say, we estimated overhead or to stranded cost to be in the range of somewhere between $20 million and $25 million. We have ongoing efforts to take out cost.

But what we’ve said was that some of those costs relate to the very sizable resources we have internationally that we intend to retail even though the Knowles was broadly international, we will continue to keep those resources in places we want to grow into more into international and grow into the overhead.

So the way we think about it is, our goal is to take out about $10 million of those stranded cost. And I think we’re well on our way of doing that..

And then for other portfolio cleanups?.

Look, we’re looking to get the closing here by the end of this quarter or during the second quarter on the sale of our deck business in the U.K. Beyond that we have no processes on divestiture underway.

But Deane, it’s – that’s an ongoing discussion with – here with the management team as well as with the board over the next couple or three years, I think it would be normal and expected to see us continue to narrow the scope of Dover. But don’t expect me, but we have nothing underway at this moment..

Great. And just last one from me is, if you go back to the Energy side, I don’t mean to pile on. But just to comment about the increase in rig count expectations. And that just brings up this mist that still persists at Dover that you’re so tied to rig count.

And it seems as though the industry has changed to where you should be publishing more on wells per rig.

But Bob, maybe you just address that?.

Yes, the wells per rig, is – well completion is actually the better statistic and metric especially around artificial lift Deane. For the drilling activity, rig count is still a good number to look at for drilling activity. But for artificial lift and production it is more around well completion. The well is completed per rig.

We are going to see some variation on that depending upon the basins that you’re looking at here in North America. But it still to us is an indicator of the activity that’s going on in the North American Energy space..

Great. Thank you..

And our final question comes from the line of Walter Liptak with Global Hunter..

Good morning..

Hi, thanks and good morning guys. I wonder listening to the call, everything sounds pretty positive across the board, Printing, fluids, refrigeration and Energy.

And I just wanted to get a little bit more color on your view for guidance and why you didn’t at least take up the low end of guidance or what could go wrong in 2014 that you’re concerned about?.

You’re asking me why I didn’t take guidance up?.

Yes..

I’d actually like to get through the bulk of the second quarter before we actually have a real serious discussion internally about it. I’d like to see what the order rates are for April and May. I will tell you that we look at a range of $460 million to $480 million.

Folks, I’ll tell you what, we’re focused on, we’re focused on the top-end of that range, not the mid-part of that range. The bottom end of our range, yeah, we could, I’ll plead guilty to that that we could have – we could have had a very serious discussion about increasing the bottom end of the range.

But again, I’m going to say, let us get through and see at least what order activity is for April and May, we’ll have another discussion on that at the end of the quarter or on the July 12..

Okay, good. That’s very good to hear..

But I’ll tell you, I’ll tell you again, what we’re focused on. That’s the top end of our range..

Okay. If I can just do a follow-up on the Energy, I didn’t hear you talk about how it trended through the quarter, January, February, March. Usually when this market picks up, I think it can pick up a little bit quicker.

I wonder if you could just comment on that?.

I don’t have that data here in front of me. But my recall is that it was fairly consistent through the quarter for Energy..

Okay.

And maybe just a last one, the winch market being down a little bit, is there anything wrong with that market or is it just timing and orders?.

It’s – look, it’s timing of orders. And what I call the oil field patch. But we also continue to deal with a headwind. You go back two years ago and my goodness, 30% or 40% of this business was supplying winches into the – for the military.

And we continue to see that part of the business activity decline we’re going to see another significant decline end of this year. But it will decline to the point in 2014 where, if it declines any further in ‘15 is not a comment. I mean, that’s all I can tell you..

Okay..

It’s getting down to some nits and gnash in the military business on that business..

Okay, good. All right, thank you..

Thank you. That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Goldberg for closing remarks..

Thanks Jackie. Once again, we thank you for joining us on our conference call. And we look forward to speaking to you with our second quarter results. Have a good day and a good weekend. Bye..

Thank you. That concludes today’s first quarter 2014 Dover Corporation earnings conference call. You may now disconnect your lines at this time. And have a wonderful day..