Donaldson Company Inc (DCI)

[DividendDream]

Currently I am working on a financial model for DCI with some Monte Carlot-techniques in order to forecast the pro forma income statement and balance sheet for the next years. Right now it's just for practice purposes but I think I might write an article on it.

However I have a question about the income statement. Check the annual report here.

On the income statement (page 29) I don't see a charge for depreciation and amortization. The cash flow statement (page 32) does show depreciation and amortization of $64 million for 2013. I always assumed this line item also needed to be on the income statement?

Could someone please elaborate on this a bit more. Thanks for helping out!

[Dividend Watcher]

DD, that's an easy one. Page 29 is the consolidated financials which includes all subsidiaries and rolls up all the line items to general categories. They certainly shortened it but that is so it's easy to read. You'll notice there are no line items for electricity costs, interest payments or any of the other stuff to run a business. It's probably included in the "Selling, general, and administrative" line item. To pull that out, or many of the other details, you need to look at the cash flow statement or somewhere in the next bunch of pages in the notes to the financial statements.

BTW, the link is broken -- at least my browser errors out. You need to go directly to the company's IR web site to access it.

[DividendDream]

(08-24-2014, 07:15 AM)Dividend Watcher Wrote: DD, that's an easy one. Page 29 is the consolidated financials which includes all subsidiaries and rolls up all the line items to general categories. They certainly shortened it but that is so it's easy to read. You'll notice there are no line items for electricity costs, interest payments or any of the other stuff to run a business. It's probably included in the "Selling, general, and administrative" line item. To pull that out, or many of the other details, you need to look at the cash flow statement or somewhere in the next bunch of pages in the notes to the financial statements.

BTW, the link is broken -- at least my browser errors out. You need to go directly to the company's IR web site to access it.

Hi Dividend Watcher, thanks for clarifying that. Kind of a weird way of presenting, because I had a hard time figuring it all out. But in the end worked out fine, because my article about Donaldson Company Inc on Seeking Alpha got "Editor's Pick" status!

In the article I used Monte Carlo simulation techniques to show the sensitivity of the annual total return for DCI in the coming 5 years. It was not only a great way to investigate a company like Donaldson, but it was also awesome to sharpen my skills with this particular analysis. Check it out here.

I am curious to know what you think about the article. If there are any questions about the article or spreadsheets, or if you have suggestions for future analysis, let me know!

[rapidacid]

Ruh roh.

http://seekingalpha.com/news/2803036-don...email_link

Quote:Donaldson (NYSECI) -10.5% AH after saying it delayed the filing of its 10-K, citing ongoing investigation related to the recognition of revenue for certain projects in its European gas turbine products business.

DCI says an investigation found that documents related to a project in the European gas turbine products business earlier this year were altered in order to inappropriately recognize revenue for certain transactions in periods earlier than would be allowable;

DCI believes the transactions were valid, but revenue was inappropriately recognized in an accelerated manner.DCI believes related financial statement misstatements were immaterial, but says the investigation is still ongoing.

[Ok Red]

Interesting timing. It's not a very popular company on Seeking Alpha but I've been looking at it and NDSN. It's at a VERY good price right now....

[Dividendsrule]

Awesome! Seen this in the past, thanks for bringing this up. Looks very interesting.

[rapidacid]

I have DCI in my IRA. I think if you put DCI in an anonymous, blind dividend growth tasting challenge they'd score very well amongst investors. They're an unsexy, very solid company.

Their charts going back the last couple of years looks pretty busted ... great time for them to continue their buybacks. Share count hast dropped from 172MM to 139MM over the last 10 years.

[Dividendsrule]

Excellent, Rapidacid. Yes, perfect IRA stock. Bought this morning, thanks guys.