UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021

☐ 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

(Exact name of registrant as specified in its charter)


Delaware									53-0257888
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

3005 Highland Parkway
Downers Grove, Illinois									60515
(Address of principal executive offices)									(Zip Code)

(630) 541-1540

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DOV	New York Stock Exchange
1.250% Notes due 2026	DOV 26	New York Stock Exchange
0.750% Notes due 2027	DOV 27	New York Stock Exchange

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 ☑ 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 ☑ 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 the 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

☑

Accelerated Filer

☐

Emerging Growth Company

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

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. ☐

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

The number of shares outstanding of the Registrant’s common stock as of April ~~14, 2020~~13, 2021 was ~~143,947,008.~~143,927,272.

Dover Corporation

Form 10-Q

Table of Contents


PART I — FINANCIAL INFORMATION			Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Earnings for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	1
	Condensed Consolidated Statements of Comprehensive Earnings for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	2
	Condensed Consolidated Balance Sheets at March 31, ~~2020~~2021 and December 31, ~~2019~~2020	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020	5
	~~Notes to Condensed Consolidated Financial Statements~~Note 1 — Basis of Presentation	6
	Note 2 — Revenue	6
	Note 3 — Acquisitions	7
	Note 4 — Disposed Operations	7
	Note 5 — Inventories	7
	Note 6 — Property, Plant and Equipment, net	8
	Note 7 — Credit Losses	8
	Note 8 — Goodwill and Other Intangible Assets	8
	Note 9 — Restructuring Activities	9
	Note 10 — Borrowings	10
	Note 11 — Financial Instruments	11
	Note 12 — Income Taxes	12
	Note 13 — Equity Incentive Program	12
	Note 14 — Commitments and Contingent Liabilities	14
	Note 15 — Employee Benefit Plans	14
	Note 16 — Other Comprehensive Earnings	15
	Note 17 — Segment Information	16
	Note 18 — Share Repurchases	17
	Note 19 — Earnings per Share	18
	Note 20 — Recent Accounting Pronouncements	18
	Note 21 — Subsequent Event	18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2219
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4335
Item 4.	Controls and Procedures	4335

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	4336
Item 1A.	Risk Factors	4336
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4436
Item 3.	Defaults Upon Senior Securities	4436
Item 4.	Mine Safety Disclosures	4436
Item 5.	Other Information	4436
Item 6.	Exhibits	4537
SIGNATURES			4638

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,							Three Months Ended March 31,
		2020		2019			2021		2020
Revenue	Revenue	$	1,655,939	$	1,724,757	Revenue	$	1,867,901	$	1,655,939
Cost of goods and services	Cost of goods and services	1,043,696		1,101,215		Cost of goods and services	1,146,353		1,043,696
Gross profit	Gross profit	612,243		623,542		Gross profit	721,548		612,243
Selling, general and administrative expenses	Selling, general and administrative expenses	386,941		408,466		Selling, general and administrative expenses	408,998		386,941
Loss on assets held for sale		—		46,946

Operating earnings	Operating earnings	225,302		168,130		Operating earnings	312,550		225,302
Interest expense	Interest expense	27,268		31,808		Interest expense	26,823		27,268
Interest income	Interest income	(1,183)		(890)		Interest income	(680)		(1,183)

Gain on sale of a business	Gain on sale of a business	(6,551)		—		Gain on sale of a business	0		(6,551)
Other income, net	Other income, net	(7,732)		(1,106)		Other income, net	(2,843)		(7,732)
Earnings before provision for income taxes	Earnings before provision for income taxes	213,500		138,318		Earnings before provision for income taxes	289,250		213,500
Provision for income taxes	Provision for income taxes	37,221		32,613		Provision for income taxes	56,481		37,221

Net earnings	Net earnings	$	176,279	$	105,705	Net earnings	$	232,769	$	176,279

Net earnings per share:	Net earnings per share:					Net earnings per share:
Basic	Basic	$	1.22	$	0.73	Basic	$	1.62	$	1.22
Diluted	Diluted	$	1.21	$	0.72	Diluted	$	1.61	$	1.21
Weighted average shares outstanding:	Weighted average shares outstanding:					Weighted average shares outstanding:
Basic	Basic	144,259		145,087		Basic	143,765		144,259
Diluted	Diluted	145,782		146,911		Diluted	144,938		145,782

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020
Net earnings	Net earnings	$	176,279	$	105,705	Net earnings	$	232,769	$	176,279
Other comprehensive (loss) earnings, net of tax	Other comprehensive (loss) earnings, net of tax					Other comprehensive (loss) earnings, net of tax
Foreign currency translation adjustments:	Foreign currency translation adjustments:					Foreign currency translation adjustments:
Foreign currency translation (losses) gains		(93,554)		23,700
Reclassification of foreign currency translation losses to earnings		—		25,339
Total foreign currency translation adjustments		(93,554)		49,039
Foreign currency translation losses						Foreign currency translation losses	(12,971)		(93,554)

Total foreign currency translation adjustments (net of $(10,492) and $(5,139) tax provision, respectively)						Total foreign currency translation adjustments (net of $(10,492) and $(5,139) tax provision, respectively)	(12,971)		(93,554)
Pension and other post-retirement benefit plans:	Pension and other post-retirement benefit plans:					Pension and other post-retirement benefit plans:

Amortization of actuarial losses included in net periodic pension cost	Amortization of actuarial losses included in net periodic pension cost	1,669		175		Amortization of actuarial losses included in net periodic pension cost	2,374		1,669
Amortization of prior service costs included in net periodic pension cost	Amortization of prior service costs included in net periodic pension cost	286		572		Amortization of prior service costs included in net periodic pension cost	208		286

Total pension and other post-retirement benefit plans		1,955		747
Total pension and other post-retirement benefit plans (net of $(773) and $(568) tax provision, respectively)						Total pension and other post-retirement benefit plans (net of $(773) and $(568) tax provision, respectively)	2,582		1,955
Changes in fair value of cash flow hedges:	Changes in fair value of cash flow hedges:					Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period		(5,074)		2,594
Net losses (gains) reclassified into earnings		1,121		(230)
Total cash flow hedges		(3,953)		2,364
Unrealized net gains (losses) arising during period						Unrealized net gains (losses) arising during period	4,324		(5,074)
Net (gains) losses reclassified into earnings						Net (gains) losses reclassified into earnings	(1,411)		1,121
Total cash flow hedges (net of $(871) and $1,121 tax (provision) benefit, respectively)						Total cash flow hedges (net of $(871) and $1,121 tax (provision) benefit, respectively)	2,913		(3,953)

Other comprehensive (loss) earnings, net of tax		(95,552)		52,150
Other comprehensive earnings (loss), net of tax						Other comprehensive earnings (loss), net of tax	(7,476)		(95,552)
Comprehensive earnings	Comprehensive earnings	$	80,727	$	157,855	Comprehensive earnings	$	225,293	$	80,727

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets									Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	508,907	$	397,253	Cash and cash equivalents	$	536,512	$	513,075

Receivables, net of allowances of $33,901 and $29,381		1,222,154		1,217,190
Inventories		852,075		806,141
Receivables, net of allowances of $39,641 and $40,474						Receivables, net of allowances of $39,641 and $40,474	1,240,516		1,137,223
Inventories, net						Inventories, net	900,607		835,804
Prepaid and other current assets	Prepaid and other current assets	122,864		127,846		Prepaid and other current assets	137,450		133,085

Total current assets	Total current assets	2,706,000		2,548,430		Total current assets	2,815,085		2,619,187
Property, plant and equipment, net	Property, plant and equipment, net	841,813		842,318		Property, plant and equipment, net	881,131		897,326

Goodwill	Goodwill	3,860,817		3,783,347		Goodwill	4,046,552		4,072,542
Intangible assets, net	Intangible assets, net	1,096,140		1,055,014		Intangible assets, net	1,040,057		1,083,772
Other assets and deferred charges	Other assets and deferred charges	439,483		440,368		Other assets and deferred charges	488,068		479,247

Total assets	Total assets	$	8,944,253	$	8,669,477	Total assets	$	9,270,893	$	9,152,074

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity									Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:
Notes payable		$	500,000	$	84,700

Accounts payable	Accounts payable	947,006		983,293		Accounts payable	$	911,074	$	853,942
Accrued compensation and employee benefits	Accrued compensation and employee benefits	175,231		226,658		Accrued compensation and employee benefits	202,096		239,750
Deferred revenue						Deferred revenue	195,201		184,845
Accrued insurance	Accrued insurance	99,992		98,432		Accrued insurance	102,000		98,954
Other accrued expenses	Other accrued expenses	355,837		339,060		Other accrued expenses	335,555		343,637
Federal and other income taxes	Federal and other income taxes	16,295		17,748		Federal and other income taxes	29,436		17,670

Total current liabilities	Total current liabilities	2,094,361		1,749,891		Total current liabilities	1,775,362		1,738,798
Long-term debt	Long-term debt	2,963,018		2,985,716		Long-term debt	3,063,374		3,108,829
Deferred income taxes	Deferred income taxes	338,586		322,036		Deferred income taxes	314,165		298,423
Noncurrent income tax payable	Noncurrent income tax payable	52,000		52,000		Noncurrent income tax payable	49,937		49,937
Other liabilities	Other liabilities	515,607		527,174		Other liabilities	568,911		570,314

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:

Total stockholders' equity	Total stockholders' equity	2,980,681		3,032,660		Total stockholders' equity	3,499,144		3,385,773
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	8,944,253	$	8,669,477	Total liabilities and stockholders' equity	$	9,270,893	$	9,152,074

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


		Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity			Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at December 31, 2019		$	258,552	$	869,719	$	(6,090,842)	$	8,211,257	$	(216,026)	$	3,032,660
Adoption of ASU 2016-13		—		—		—		(2,112)		—		(2,112)
Balance at December 31, 2020														Balance at December 31, 2020	$	258,982	$	868,882	$	8,608,284	$	(153,254)	$	(6,197,121)	$	3,385,773
Net earnings	Net earnings	—		—		—		176,279		—		176,279		Net earnings	0		0		232,769		0		0		232,769
Dividends paid ($0.49 per share)		—		—		—		(70,899)		—		(70,899)
Dividends paid ($0.495 per share)														Dividends paid ($0.495 per share)	0		0		(71,344)		0		0		(71,344)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	193		(10,212)		—		—		—		(10,019)		Common stock issued for the exercise of share-based awards	356		(30,809)		0		0		0		(30,453)
Stock-based compensation expense	Stock-based compensation expense	—		3,252		—		—		—		3,252		Stock-based compensation expense	0		11,521		0		0		0		11,521
Common stock acquired	Common stock acquired	—		—		(52,916)		—		—		(52,916)		Common stock acquired	0		0		0		0		(21,637)		(21,637)
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—		—		—		—		(95,552)		(95,552)		Other comprehensive loss, net of tax	0		0		0		(7,476)		0		(7,476)
Other, net	Other, net	—		(12)		—		—		—		(12)		Other, net	0		(9)		0		0		0		(9)
Balance at March 31, 2020		$	258,745	$	862,747	$	(6,143,758)	$	8,314,525	$	(311,578)	$	2,980,681
Balance at March 31, 2021														Balance at March 31, 2021	$	259,338	$	849,585	$	8,769,709	$	(160,730)	$	(6,218,758)	$	3,499,144


		Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) earnings		Total stockholders' equity			Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at December 31, 2018		$	257,822	$	886,016	$	(5,947,562)	$	7,815,486	$	(243,096)	$	2,768,666
Balance at December 31, 2019														Balance at December 31, 2019	$	258,552	$	869,719	$	8,211,257	$	(216,026)	$	(6,090,842)	$	3,032,660
Adoption of ASU 2016-13														Adoption of ASU 2016-13	0		0		(2,112)		0		0		(2,112)
Net earnings	Net earnings	—		—		—		105,705		—		105,705		Net earnings	0		0		176,279		0		0		176,279
Dividends paid ($0.48 per share)		—		—		—		(69,809)		—		(69,809)
Dividends paid ($0.49 per share)														Dividends paid ($0.49 per share)	0		0		(70,899)		0		0		(70,899)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	392		(20,000)		—		—		—		(19,608)		Common stock issued for the exercise of share-based awards	193		(10,212)		0		0		0		(10,019)
Stock-based compensation expense	Stock-based compensation expense	—		8,182		—		—		—		8,182		Stock-based compensation expense	0		3,252		0		0		0		3,252

Other comprehensive earnings, net of tax		—		—		—		—		52,150		52,150
Common stock acquired														Common stock acquired	0		0		0		0		(52,916)		(52,916)
Other comprehensive loss, net of tax														Other comprehensive loss, net of tax	0		0		0		(95,552)		0		(95,552)
Other, net	Other, net	—		(7,833)		—		—		—		(7,833)		Other, net	0		(12)		0		0		0		(12)
Balance at March 31, 2019		$	258,214	$	866,365	$	(5,947,562)	$	7,851,382	$	(190,946)	$	2,837,453
Balance at March 31, 2020														Balance at March 31, 2020	$	258,745	$	862,747	$	8,314,525	$	(311,578)	$	(6,143,758)	$	2,980,681

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020
Operating Activities:	Operating Activities:					Operating Activities:
Net earnings	Net earnings	$	176,279	$	105,705	Net earnings	$	232,769	$	176,279

Adjustments to reconcile net earnings to cash from operating activities:	Adjustments to reconcile net earnings to cash from operating activities:					Adjustments to reconcile net earnings to cash from operating activities:

Loss on assets held for sale		—		46,946

Depreciation and amortization	Depreciation and amortization	68,752		67,738		Depreciation and amortization	73,806		68,752
Stock-based compensation expense	Stock-based compensation expense	3,252		8,182		Stock-based compensation expense	11,521		3,252

Gain on sale of a business	Gain on sale of a business	(6,551)		—		Gain on sale of a business	0		(6,551)
Other, net	Other, net	(17,358)		2,363		Other, net	(9,031)		(17,358)
Cash effect of changes in assets and liabilities:	Cash effect of changes in assets and liabilities:					Cash effect of changes in assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(25,313)		(42,252)		Accounts receivable, net	(116,320)		(25,313)
Inventories	Inventories	(61,936)		(73,041)		Inventories	(75,421)		(61,936)
Prepaid expenses and other assets	Prepaid expenses and other assets	(8,654)		(14,921)		Prepaid expenses and other assets	(22,005)		(8,654)
Accounts payable	Accounts payable	(25,245)		(22,638)		Accounts payable	63,766		(34,945)
Accrued compensation and employee benefits	Accrued compensation and employee benefits	(67,247)		(55,559)		Accrued compensation and employee benefits	(34,894)		(67,247)
Accrued expenses and other liabilities	Accrued expenses and other liabilities	25,321		(16,107)		Accrued expenses and other liabilities	22,945		35,021

Accrued and deferred taxes, net	Accrued and deferred taxes, net	14,563		18,108		Accrued and deferred taxes, net	30,048		14,563
Net cash provided by operating activities	Net cash provided by operating activities	75,863		24,524		Net cash provided by operating activities	177,184		75,863

Investing Activities:	Investing Activities:					Investing Activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(40,172)		(37,122)		Additions to property, plant and equipment	(31,260)		(40,172)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(208,421)		(175,083)		Acquisitions, net of cash acquired	0		(208,421)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	1,232		170		Proceeds from sale of property, plant and equipment	5,845		1,232
Proceeds from sale of businesses	Proceeds from sale of businesses	16,850		2,245		Proceeds from sale of businesses	0		16,850
Other	Other	—		(7,900)		Other	(4,157)		0
Net cash used in investing activities	Net cash used in investing activities	(230,511)		(217,690)		Net cash used in investing activities	(29,572)		(230,511)

Financing Activities:	Financing Activities:					Financing Activities:
Repurchase of common stock	Repurchase of common stock	(52,916)		—		Repurchase of common stock	(21,637)		(52,916)

Change in commercial paper and notes payable		415,300		125,893
Change in notes payable						Change in notes payable	0		415,300
Dividends paid to stockholders	Dividends paid to stockholders	(70,899)		(69,809)		Dividends paid to stockholders	(71,344)		(70,899)
Payments to settle employee tax obligations on exercise of share-based awards	Payments to settle employee tax obligations on exercise of share-based awards	(10,019)		(19,608)		Payments to settle employee tax obligations on exercise of share-based awards	(30,453)		(10,019)

Other	Other	(512)		(409)		Other	(805)		(512)
Net cash provided by financing activities		280,954		36,067
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(124,239)		280,954

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(14,652)		3,892		Effect of exchange rate changes on cash and cash equivalents	64		(14,652)

Net increase (decrease) in cash and cash equivalents		111,654		(153,207)
Net increase in cash and cash equivalents						Net increase in cash and cash equivalents	23,437		111,654
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	397,253		396,221		Cash and cash equivalents at beginning of period	513,075		397,253
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	508,907	$	243,014	Cash and cash equivalents at end of period	$	536,512	$	508,907

See Notes to Condensed Consolidated Financial Statements

Table of Contents

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, ~~2019,~~2020, included in the Company's Annual Report on Form 10-K filed with the SEC on February ~~14, 2020.~~12, 2021. 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.

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. Revenue

A majority of the Company’s revenue is short cycle in nature with shipments within one year from order. A small portion of the Company’s revenue derives from contracts extending over one year. The Company's payment terms generally range between 30 to 90 days and vary by the location of businesses, the type of products manufactured to be sold and the volume of products sold, among other factors.

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 ~~generally~~ relates to the sale of equipment or services in which the customer receives the benefit as they are performed or controls the assets being created, or engineered to order equipment 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.

Revenue from contracts with customers is disaggregated by ~~segments~~segment and geographic location, as itthey best ~~depicts~~depict the nature and amount of the Company’s revenue. See Note 17 — Segment Information for revenue by segment and geographic ~~locations.~~location.

At March 31, ~~2020,~~2021, we estimated that ~~$156.0~~$291 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 ~~81%~~77% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through ~~2021,~~2022, with the remaining balance to be recognized in ~~2022~~2023 and thereafter.

The following table provides information about contract assets and contract liabilities from contracts with customers:


		March 31, 2020		December 31, 2019		January 1, 2019			March 31, 2021		December 31, 2020		December 31, 2019

Contract assets	Contract assets	$	13,841	$	14,894	$	9,330	Contract assets	$	14,483	$	15,020	$	14,894
Contract liabilities - current	Contract liabilities - current	61,508		44,001		36,461		Contract liabilities - current	195,201		184,845		104,901
Contract liabilities - non-current	Contract liabilities - non-current	10,363		9,121		9,382		Contract liabilities - non-current	20,811		13,921		10,921

In the fourth quarter of 2020, the Company adjusted its prior year balance sheet classification and footnote disclosure related to certain upfront cash consideration received from customers that should have been classified as contract liabilities (included in deferred revenue or other liabilities) rather than customer deposits (included in accounts payable).

The revenue recognized during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 that was included in contract liabilities at the beginning of the period, inclusive of adjustments, amounted to ~~$21,133~~$104,617 and ~~$15,414,~~$51,905, respectively.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

3. Acquisitions

2021 Acquisitions

There were no acquisitions during the three months ended March 31, 2021.

2020 Acquisitions

During the three months ended March 31, 2020, the Company acquired two businesses in separate transactions for total consideration of $208,421, net of cash acquired. These businesses were acquired to complement and expand upon existing operations within the Engineered Products and Imaging & Identification ~~and Engineered Products~~ segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill in the amount of $33,125 is deductible for U.S. income tax purposes and goodwill in the amount of $92,256 is non-deductible for U.S. income tax purposes for these acquisitions.

On January 24, 2020, the Company acquired 100% of the voting stock of Sys-Tech Solutions, Inc. ("Systech"), a leading provider of product traceability, regulatory compliance and brand-protection software and solutions to pharmaceutical and consumer products manufacturers, for $162,942, net of cash acquired. The Systech acquisition strengthens the portfolio of solutions offered by the Imaging & Identification segment. In connection with this acquisition, the Company recorded goodwill of $92,256 and intangible assets of $76,100, primarily related to customer intangibles.

On February 18, 2020, the Company acquired 100% of the voting stock of So. Cal. Soft-Pak, Incorporated ("Soft-Pak") Software Solutions, a leading specialized provider of integrated back office, route management and customer relationship management software solutions to the waste and recycling fleet industry for $45,479, net of cash acquired. The Soft-Pak acquisition strengthens the digital offerings within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $33,125 and intangible assets of $12,800, primarily related to customer intangibles.

~~The following presents the preliminary allocation of purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at acquisition date:~~

~~Total~~

~~Current assets, net of cash acquired~~

~~19,816~~

~~Property, plant and equipment~~

~~1,580~~

~~Goodwill~~

~~125,381~~

~~Intangible assets~~

~~88,900~~

~~Current liabilities~~

~~(15,073)~~

~~Other liabilities~~

~~(12,183)~~

~~Net assets acquired~~

~~208,421~~

~~The amounts assigned to goodwill and major intangible asset classifications were as follows:~~

Amount allocated Useful life (in years)
Goodwill - tax deductible $ 33,125 na
Goodwill - non deductible 92,256 na
Customer intangibles 74,100 12
Trademarks 5,100 15
Other intangibles 9,700 6 - 9
$ 214,281

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

~~2019 Acquisitions~~

On January ~~25, 2019,~~24, 2020, the Company acquired 100% of the ~~assets~~voting stock of ~~Belanger,~~Sys-Tech Solutions, Inc. ("~~Belanger"~~Systech"), a leading ~~full-line car wash equipment manufacturer~~provider of product traceability, regulatory compliance and brand-protection software and solutions to pharmaceutical and consumer products manufacturers, for ~~$175,083,~~$162,942, net of cash acquired. The ~~Belanger~~Systech acquisition strengthens ~~Dover's position in~~ the ~~vehicle wash business within~~portfolio of solutions offered by the ~~Fueling Solutions~~Imaging & Identification segment. In connection with this acquisition, the Company recorded goodwill of ~~$97,817~~$92,256 and intangible assets of ~~$77,000,~~$76,100, primarily related to customer intangibles. ~~The intangible assets are being amortized over 9 to 15 years.~~

~~Pro Forma Information~~

The following unaudited pro forma information illustrates the impact of 2020 and 2019 acquisitions on the Company’s revenue and earnings from operations for the three months ended March 31, 2020 and 2019, respectively.

The unaudited pro forma information assumes that the 2020 and 2019 acquisitions had taken place at the beginning of the prior year, 2019 and 2018, 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~~of acquisitions are not material to the ~~three months ended March 31, 2020 and 2019 were as follows:~~

Three Months Ended March 31,
2020 2019
Revenue:
As reported $ 1,655,939 $ 1,724,757
Pro forma 1,661,825 1,746,533
Net earnings:
As reported $ 176,279 $ 105,705
Pro forma 180,433 106,188
Company's Consolidated Statements of Earnings.

4. Disposed 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.

2021

There were no dispositions for the three months ended March 31, 2021.

2020

On March 6, 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company. ~~Upon disposal of AMS Chino, the~~The Company recognized total consideration of $16,850, which included a working capital adjustment. This sale resulted in a pre-tax gain on sale of $6,551 included within the Condensed Consolidated Statements of Earnings and within the Refrigeration & Food Equipment Segment for the three months ended March 31, 2020.

~~2019~~

On ~~March 29, 2019, the Co~~mpany entered into a definitive agreement to sell Finder Pompe S.r.l ("Finder"), a wholly owned subsidiary, to Gruppo Aturia S.p.A (“Aturia”). 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.

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.~~

On April 2, 2019, Dover completed the sale of Finder to Aturia, which generated total cash proceeds of $24,218. The Finder business was included in the results of the Pumps & Process Solutions segment. The sale ~~does~~did not represent a strategic shift that ~~will have~~had a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

5. Inventories, net


	March 31, 2021		December 31, 2020
Raw materials	$	516,008	$	497,604
Work in progress	193,691		152,360
Finished goods	314,525		304,760
Subtotal	1,024,224		954,724
Less reserves	(123,617)		(118,920)
Total	$	900,607	$	835,804

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

~~5. Inventories~~

March 31, 2020 December 31, 2019
Raw materials $ 486,866 $ 467,912
Work in progress 172,173 162,670
Finished goods 300,725 280,051
Subtotal 959,764 910,633
Less reserves (107,689) (104,492)
Total $ 852,075 $ 806,141

6. Property, Plant and Equipment, net


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Land	Land	$	54,580	$	56,583	Land	$	60,567	$	60,287
Buildings and improvements	Buildings and improvements	522,155		527,192		Buildings and improvements	569,109		570,366
Machinery, equipment and other	Machinery, equipment and other	1,662,535		1,648,354		Machinery, equipment and other	1,767,836		1,772,772
Property, plant and equipment, gross	Property, plant and equipment, gross	2,239,270		2,232,129		Property, plant and equipment, gross	2,397,512		2,403,425
Accumulated depreciation	Accumulated depreciation	(1,397,457)		(1,389,811)		Accumulated depreciation	(1,516,381)		(1,506,099)
Property, plant and equipment, net	Property, plant and equipment, net	$	841,813	$	842,318	Property, plant and equipment, net	$	881,131	$	897,326

~~For~~Depreciation expense totaled $38,194 and $34,555 for the three months ended March 31, ~~2020~~2021 and ~~2019, depreciation expense was $34,555 and $32,188,~~2020, respectively.

7. Credit Losses

Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments prospectively. This ASU replaces the incurred loss impairment model with an expected credit loss impairment model for financial instruments, including trade receivables. The amendment requires entities to consider forward-looking information to estimate expected credit losses, resulting in earlier recognition of losses for receivables that are current or not yet due, which were not considered under the previous accounting guidance. Upon adoption, the Company recorded a noncash cumulative effect adjustment to retained earnings of $2.1 million, net of $0.6 million of income taxes, on the opening consolidated balance sheet as of January 1, 2020.

The Company is exposed to credit losses primarily through sales of products and services. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances and other historical and forward-looking information on the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the novel coronavirus ("COVID-19") pandemic and determined that the estimate of credit losses was not significantly impacted.

~~Estimates are used to determine the allowance. It is based on assessment of anticipated payment and all other historical, current and future information that is reasonably available.~~

The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.


	~~2020~~
~~Beginning Balance, January 1,~~	$	~~29,381~~
~~Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings~~	~~2,706~~
~~Provision for expected credit losses~~	~~3,703~~
~~Amounts written off charged against the allowance~~	~~(811)~~
~~Other, including dispositions and foreign currency translation~~	~~(1,078)~~
~~Ending Balance, March 31,~~	$	~~33,901~~


	2021		2020
Beginning Balance, December 31 of the Prior Year	$	40,474	$	29,381
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings	0		2,706
Provision for expected credit losses, net of recoveries	112		3,703
Amounts written off charged against the allowance	(973)		(811)
Other, including dispositions and foreign currency translation	28		(1,078)
Ending balance, March 31	$	39,641	$	33,901

8. Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill by reportable operating segments were as follows:


	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Total
Balance at December 31, 2020	$	682,985	$	940,973	$	1,117,589	$	786,280	$	544,715	$	4,072,542

Purchase price adjustments	0		843		(1,926)		(225)		0		(1,308)

Foreign currency translation	(4,401)		(684)		(15,222)		(3,761)		(614)		(24,682)
Balance at March 31, 2021	$	678,584	$	941,132	$	1,100,441	$	782,294	$	544,101	$	4,046,552

During the three months ended March 31, 2021, the Company recorded purchase price adjustments that reduced goodwill by $1,308, principally related to working capital adjustments for 2020 acquisitions within the Fueling Solutions, Imaging & Identification, and Pumps & Process Solutions segments.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

The Company’s definite-lived and indefinite-lived intangible assets by major asset class were as follows:


	March 31, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Customer intangibles	$	1,545,214	$	851,227	$	693,987	$	1,559,771	$	834,798	$	724,973
Trademarks	231,560		107,093		124,467		233,205		103,907		129,298
Patents	162,185		141,440		20,745		163,299		141,182		22,117
Unpatented technologies	179,039		115,129		63,910		180,947		113,404		67,543
Distributor relationships	86,108		52,474		33,634		87,028		51,611		35,417
Drawings & manuals	28,135		25,851		2,284		29,198		26,193		3,005
Other	23,897		19,657		4,240		23,901		19,324		4,577
Total	2,256,138		1,312,871		943,267		2,277,349		1,290,419		986,930
Unamortized intangible assets:
Trademarks	96,790		0		96,790		96,842		0		96,842
Total intangible assets, net	$	2,352,928	$	1,312,871	$	1,040,057	$	2,374,191	$	1,290,419	$	1,083,772

Amortization expense was $35,612 and $34,197, respectively, including acquisition-related intangible amortization of $35,173 and $33,817 for the three months ended March 31, 2021 and 2020, respectively.

9. Restructuring Activities

The Company's restructuring charges by segment were as follows:


	Three Months Ended March 31,
	2021		2020
Engineered Products	$	3,991	$	358
Fueling Solutions	49		1,475
Imaging & Identification	690		256
Pumps & Process Solutions	(17)		3,846
Refrigeration & Food Equipment	1,061		560
Corporate	661		846
Total	$	6,435	$	7,341

These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services	$	3,907	$	1,542
Selling, general and administrative expenses	2,528		5,799
Total	$	6,435	$	7,341

The restructuring expenses of $6,435 incurred during the three months ended March 31, 2021 were primarily the result of restructuring programs initiated in 2020 in response to lower demand conditions, asset charges related to a product line exit and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization. Additional programs, beyond the scope of the announced programs, may be implemented during 2021 with related restructuring charges.

The $6,435 of restructuring charges incurred during the first quarter of 2021 primarily included the following items:

•The Engineered Products segment recorded $3,991 of restructuring charges related principally to asset charges related to a product line exit.

•The Fueling Solutions segment recorded $49 of restructuring charges primarily due to headcount reductions.

•The Imaging & Identification segment recorded restructuring charges of $690 principally related to headcount reductions.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

~~8. Goodwill and Other Intangible Assets~~

~~The changes in the carrying value of goodwill by reportable operating segments were as follows:~~

Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Total
Balance at December 31, 2019 $ 636,571 $ 873,381 $ 977,069 $ 750,627 $ 545,699 $ 3,783,347
Acquisitions 33,125 — 92,256 — — 125,381
Disposition of business — — — — (2,841) (2,841)
Foreign currency translation (4,446) (26,008) (8,514) (5,790) (312) (45,070)
Balance at March 31, 2020 $ 665,250 $ 847,373 $ 1,060,811 $ 744,837 $ 542,546 $ 3,860,817

During the three months ended March 31, 2020, the Company recorded additions of $125,381 to goodwill as a result of the acquisitions with the Engineered Products and Imaging & Identification segments discussed in Note 3 — Acquisitions~~. During the three months ended March 31, 2020, the Company disposed of~~ ~~$2,841~~ ~~of the Refrigeration & Food Equipment segment goodwill as a result of the sale of a business as discussed in Note 4 — Disposed Operations.~~

Dover performs its annual goodwill impairment testing in the fourth quarter of each year. During the 2019 impairment testing, all fifteen reporting units had fair values substantially in excess of their carrying values. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of the reporting units. Further, the Company assessed the current market capitalization, forecasts and the amount of headroom in the 2019 impairment test. The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed. Refer to "Segment Results of Operations" for further details on the COVID-19 impact to the Company's operations.

~~The Company’s definite-lived and indefinite-lived intangible assets by major asset class were as follows:~~

March 31, 2020 December 31, 2019
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Amortized intangible assets:
Customer intangibles $ 1,467,966 $ 731,391 $ 736,575 $ 1,410,636 $ 714,566 $ 696,070
Trademarks 220,805 89,123 131,682 218,064 85,791 132,273
Patents 158,612 134,360 24,252 159,376 133,677 25,699
Unpatented technologies 162,763 100,858 61,905 154,505 99,276 55,229
Distributor relationships 80,237 44,889 35,348 82,779 44,202 38,577
Drawings & manuals 26,619 22,228 4,391 27,500 22,403 5,097
Other 22,908 17,482 5,426 22,355 16,939 5,416
Total 2,139,910 1,140,331 999,579 2,075,215 1,116,854 958,361
Unamortized intangible assets:
Trademarks 96,561 — 96,561 96,653 — 96,653
Total intangible assets, net $ 2,236,471 $ 1,140,331 $ 1,096,140 $ 2,171,868 $ 1,116,854 $ 1,055,014

For the three months ended March 31, 2020 and 2019, amortization expense was $34,197 and $35,550, respectively, including acquisition-related intangible amortization of $33,817 and $35,155, respectively.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

~~9. Restructuring Activities~~

~~The Company's restructuring charges by segment were as follows:~~

Three Months Ended March 31,
2020 2019
Engineered Products $ 358 $ 79
Fueling Solutions 1,475 738
Imaging & Identification 256 291
Pumps & Process Solutions 3,846 381
Refrigeration & Food Equipment 560 1,412
Corporate 846 35
Total $ 7,341 $ 2,936
These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services $ 1,542 $ 1,179
Selling, general and administrative expenses 5,799 1,757
Total $ 7,341 $ 2,936

The restructuring expenses of $7,341 incurred during the three months ended March 31, 2020, were a result of restructuring programs initiated in 2019. Restructuring expense was comprised primarily of broad-based selling, general and administrative expense reduction and broad-based operational efficiency initiatives focusing on footprint consolidation, operational optimization and IT centralization designed to increase operating margin, enhance operations and position the Company for sustained growth and investment. The Company expects to incur additional charges of approximately $6 million during the remainder of 2020. COVID-19 has not resulted in significant restructuring costs. Additional programs, beyond the scope of the announced programs, may be implemented during 2020 with related restructuring charges.

~~The $7,341 of restructuring charges incurred during the first quarter of 2020 primarily included the following items:~~

•~~The Engineered Products segment recorded $358 of restructuring charges principally related to headcount reductions.~~

•~~The Fueling Solutions segment recorded $1,475 of restructuring charges principally related to headcount reductions.~~

•~~The Imaging & Identification segment recorded $256 of restructuring charges principally related to headcount reductions.~~

•The Pumps & Process Solutions segment recorded ~~$3,846~~$17 of restructuring ~~expense~~benefit primarily due to ~~headcount reductions and~~a true-up of facility ~~restructuring~~exit costs.

•The Refrigeration & Food Equipment segment recorded ~~$560~~$1,061 of restructuring expense primarily due to headcount reductions and facility restructuring costs.

•Corporate recorded ~~$846~~$661 of restructuring charges primarily related to ~~headcount reductions and associated~~ exit costs ~~related to~~associated with IT centralization initiatives.

The Company’s severance and exit accrual activities were as follows:


		Severance		Exit			Total			Severance		Exit			Total
Balance at December 31, 2019		$	13,751	$	2,639		$	16,390
Balance at December 31, 2020									Balance at December 31, 2020	$	10,547	$	4,366		$	14,913
Restructuring charges	Restructuring charges	4,014		3,327			7,341		Restructuring charges	2,055		4,380			6,435
Payments	Payments	(6,510)		(2,049)			(8,559)		Payments	(5,105)		(2,595)			(7,700)

Other, including foreign currency translation	Other, including foreign currency translation	184		(2,376)		⁽¹⁾	(2,192)		Other, including foreign currency translation	(207)		(4,061)		(1)	(4,268)
Balance at March 31, 2020		$	11,439	$	1,541		$	12,980
Balance at March 31, 2021									Balance at March 31, 2021	$	7,290	$	2,090		$	9,380

⁽¹⁾ Other activity in exit reserves primarily represents ~~the non-cash write-off of certain long-lived assets in connection with certain facility closures.~~asset charges related to a product line exit.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

10. Borrowings

Borrowings consisted of the following:

March 31, 2020 December 31, 2019
Short-term
Short-term borrowings $ 500,000 $ —
Commercial paper — 84,700
Notes payable $ 500,000 $ 84,700


			Carrying amount (1)
	Principal		March 31, 2021		December 31, 2020
Long-term
3.15% 10-year notes due November 15, 2025	$	400,000	$	396,884	$	396,716
1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	699,283		724,310
0.750% 8-year notes due November 4, 2027 (euro denominated)	€	500,000	582,232		603,107
6.65% 30-year debentures due June 1, 2028	$	200,000	199,280		199,255
2.950% 10-year notes due November 4, 2029	$	300,000	296,744		296,650
5.375% 30-year debentures due October 15, 2035	$	300,000	296,372		296,309
6.60% 30-year notes due March 15, 2038	$	250,000	248,081		248,053
5.375% 30-year notes due March 1, 2041	$	350,000	344,498		344,429



Total long-term debt			$	3,063,374	$	3,108,829

(1)

Carrying amount ⁽¹⁾
Principal March 31, 2020 December 31, 2019
Long-term
3.150% 10-year notes due November 15, 2025 $ 400,000 $ 396,210 $ 396,042
1.25% 10-year notes due November 9, 2026 (euro-denominated) € 600,000 645,487 658,089
0.750% 8-year notes due November 4, 2027 (euro denominated) € 500,000 537,463 548,008
6.65% 30-year debentures due June 1, 2028 $ 200,000 199,180 199,155
2.950% 10-year notes due November 4, 2029 $ 300,000 296,366 296,270
5.375% 30-year debentures due October 15, 2035 $ 300,000 296,122 296,060
6.60% 30-year notes due March 15, 2038 $ 250,000 247,968 247,939
5.375% 30-year notes due March 1, 2041 $ 350,000 344,222 344,153
Total long-term debt $ 2,963,018 $ 2,985,716

⁽¹⁾ Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discounts were

$~~18.3~~16.8 million and ~~$18.9~~$17.6 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Total deferred debt issuance costs were ~~$15.7~~$13.9 million and ~~$16.2~~$14.4 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

As of March 31, ~~2020,~~2021, the Company maintained a $1.0 billion five-year unsecured revolving credit facility (the "Credit Agreement") with a syndicate of banks which expires on October 4, 2024. At the Company's election, loans under the Credit Agreement will bear interest at a base rate plus an applicable margin. The Credit Agreement requires the Company to pay a facility fee and imposes various restrictions on the Company such as, among other things, a requirement to maintain a minimum interest coverage ratio of EBITDA to consolidated net interest expense of not less than 3.0 to 1. The Company uses the Credit Agreement principally as liquidity back-up for ~~its~~its commercial paper program. On March 16, 2020, the Company borrowed $500 million ~~due May 19, 2020~~ under the Credit ~~Agreement.~~Agreement, which was subsequently repaid in full during the second quarter with proceeds from resumed commercial paper borrowings. Proceeds from the Credit Agreement borrowing were used to repay all of the Company's outstanding commercial paper and for general corporate purposes.

The Company was in compliance with all covenants in the Credit Agreement and other long-term debt covenants at March 31, ~~2020~~2021 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of ~~11.2~~12.1 to 1.

As of March 31, ~~2020,~~2021, the Company had approximately ~~$143.5~~$145.7 million outstanding in letters of credit, surety bonds, and performance and other guarantees which expire on various dates through 2029. These letters of credit and bonds are primarily issued as security for insurance, warranty and other performance obligations. In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

11. Financial Instruments

Derivatives

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations and certain commodity risks. In order to manage these risks, the Company has hedged portions of its forecasted sales and purchases to occur within the next twelve months that are denominated in non-functional currencies, with currency forward contracts designated as cash flow hedges. At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had contracts with total notional amounts of ~~$170,672~~$177,216 and ~~$179,580,~~$173,674, respectively, to exchange currencies, principally Euro, Pound Sterling, Swedish Krona, Chinese Yuan, Canadian Dollar, and Swiss Franc. The Company believes it is probable that all forecasted cash flow transactions will occur.

In addition, the Company had outstanding contracts with a total notional amount of ~~$76,553~~$77,916 and ~~$79,707~~$73,755 as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, that are not designated as hedging instruments. These instruments are used to reduce the

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

Company's exposure for operating receivables and payables that are denominated in non-functional currencies. Gains and losses on these contracts are recorded in other income, net in the Condensed Consolidated Statements of Earnings.

The following table sets forth the fair values of derivative instruments held by the Company as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 and the balance sheet lines in which they are recorded:


		Fair Value Asset (Liability)								Fair Value Asset (Liability)
		March 31, 2020		December 31, 2019		Balance Sheet Caption		March 31, 2021		December 31, 2020		Balance Sheet Caption
Foreign currency forward	Foreign currency forward	$	1,826	$	2,892	Prepaid / Other current assets	Foreign currency forward	$	4,184	$	2,325	Prepaid and other current assets
Foreign currency forward	Foreign currency forward	(2,979)		(476)		Other accrued expenses	Foreign currency forward	(744)		(2,057)		Other accrued expenses

For a cash flow hedge, the change in estimated fair value of a hedging instrument is recorded in accumulated other comprehensive (loss) earnings as a separate component of the Condensed Consolidated Statements of Stockholders' Equity and is reclassified into revenues and cost of goods and services in the Condensed Consolidated Statements of Earnings during the period in which the hedged transaction is ~~recognized.~~settled. The amount of gains or losses from hedging activity recorded in earnings is not significant, and the amount of unrealized gains and losses from cash flow hedges that are expected to be reclassified to earnings in the next twelve months is not significant; therefore, additional tabular disclosures are not presented. There are no amounts excluded from the assessment of hedge effectiveness and the Company's derivative instruments that are subject to credit risk contingent features were not significant.

The Company is exposed to credit loss in the event of nonperformance by counterparties to the financial instrument contracts held by the Company; however, nonperformance by these counterparties is considered unlikely as the Company’s policy is to contract with highly-rated, diversified counterparties.

The Company has designated the €600,000 and €500,000 of euro-denominated notes issued November 9, 2016 and November 4, 2019, respectively, as hedges of a portion of its net investment in euro-denominated operations. Changes in the value of the euro-denominated debt are recognized in foreign currency translation adjustments within other comprehensive earnings of the Condensed Consolidated Statements of Comprehensive Earnings to offset changes in the value of the net investment in euro-denominated operations.

Amounts recognized in other comprehensive earnings for the gains (losses) on net investment hedges were as follows:


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020
Gain on euro-denominated debt	Gain on euro-denominated debt	$	23,624	$	3,557	Gain on euro-denominated debt	$	46,433	$	23,624
Tax expense	Tax expense	(5,139)		(747)		Tax expense	(10,492)		(5,139)
Net gain on net investment hedges, net of tax	Net gain on net investment hedges, net of tax	$	18,485	$	2,810	Net gain on net investment hedges, net of tax	$	35,941	$	18,485

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs include inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities.

Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019:~~2020:

March 31, 2020

December 31, 2019

March 31, 2021

December 31, 2020

Level 2

Assets:

Foreign currency cash flow hedges

1,826

2,892

Foreign currency cash flow hedges

4,184

2,325

Liabilities:

Foreign currency cash flow hedges

2,979

476

Foreign currency cash flow hedges

744

2,057

In addition to fair value disclosure requirements related to financial instruments carried at fair value, accounting standards require interim disclosures regarding the fair value of all of the Company’s financial instruments.

The estimated fair value of long-term debt, net at March 31, ~~2020~~2021 and December 31, ~~2019~~2020, was ~~$3,311,012~~$3,460,123 and ~~$3,322,033,~~$3,635,673, respectively. The estimated fair value of long-term debt is based on quoted market prices for similar instruments and is, therefore, classified as Level 2 within the fair value hierarchy.

The carrying values of cash and cash equivalents, trade receivables, accounts payable and notes payable are reasonable estimates of their fair values as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 due to the short-term nature of these instruments.

12. Income Taxes

The effective tax rates for the three months ended March 31, 2021 and 2020 ~~and 2019~~ were ~~17.4%~~19.5% and ~~23.6%~~17.4%, respectively. The ~~decrease~~increase in the effective tax rate for the three months ended March 31, ~~2020~~2021 relative to the prior comparable period iswas primarily driven by favorable audit ~~settlements.~~

~~The three months ended March 31, 2019 includes a discrete tax benefit from stock exercises, partially offset by~~settlements in the ~~exclusion of capital losses on the sale of Finder under local tax law.~~prior year.

Dover and its subsidiaries file tax returns in the U.S., including various state and local returns, and in other foreign jurisdictions. We believe adequate provision has been made for all income tax uncertainties. The Company is routinely audited by taxing authorities in its filing jurisdictions, and a number of these audits are currently underway. The Company believes that within the next twelve months uncertain tax positions may be resolved and statutes of limitations will expire, which could result in a decrease in the gross amount of unrecognized tax benefits of approximately 0 to ~~$9.3~~$13.4 million.

13. Equity Incentive Program

The Company typically grants equity awards annually at its regularly scheduled first quarter meeting of the Compensation Committee of the Board of Directors. During the three months ended March 31, ~~2020,~~2021, the Company issued stock-settled appreciation rights ("SARs") covering ~~389,603~~411,814 shares, performance share awards of ~~49,056~~50,371 and restricted stock units ("RSUs") of ~~78,553.~~82,469.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

The Company uses the Black-Scholes option pricing model to determine the fair value of each SAR on the date of grant. Expected volatilities are based on Dover's stock price history, including implied volatilities from traded options on Dover stock. The Company uses historical data to estimate SAR exercise and employee termination patterns within the valuation model. The expected life of SARs granted is derived from the output of the option valuation model and represents the average period of time that SARs granted are expected to be outstanding. The interest rate for periods within the contractual life of the SARs is based on the U.S. Treasury yield curve in effect at the time of grant.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

The assumptions used in determining the fair value of the SARs awarded during the respective periods were as follows:


		SARs							SARs
		2020		2019			2021		2020
Risk-free interest rate	Risk-free interest rate	1.44	%	2.51	%	Risk-free interest rate	0.59	%	1.44	%
Dividend yield	Dividend yield	1.65	%	2.13	%	Dividend yield	1.62	%	1.65	%
Expected life (years)	Expected life (years)	5.5		5.6		Expected life (years)	5.5		5.5
Volatility	Volatility	22.76	%	22.35	%	Volatility	30.49	%	22.76	%

Grant price	Grant price	$119.86		$91.20		Grant price	$122.73		$119.86
Fair value per share at date of grant	Fair value per share at date of grant	$22.54		$17.55		Fair value per share at date of grant	$29.08		$22.54

The performance share awards granted in 2021 and 2020 are market condition awards as attainment is based on Dover's performance relative to its peer group (companies listed under the S&P 500 Industrials sector) for the relevant performance period. The performance period and vesting period for these awards is ~~approximately~~ three years. These awards were valued on the date of grant using the Monte Carlo simulation model (a binomial lattice-based valuation model) ~~with the following assumptions,~~, and are generally recognized ratably over the vesting period, and the fair value is not subject to change based on future market conditions. The assumptions used in determining the fair value of the performance shares granted in ~~2020~~the respective periods were as follows:


	~~Performance Shares~~
	~~2020~~
~~Risk-free interest rate~~	~~1.40~~	%
~~Dividend yield~~	~~1.65~~	%
~~Expected life (years)~~	~~2.9~~
~~Volatility~~	~~23.30~~	%

~~Grant price~~	~~$119.86~~
~~Fair value per share at date of grant~~	~~$165.71~~


	Performance Shares
	2021		2020
Risk-free interest rate	0.19	%	1.40	%
Dividend yield	1.62	%	1.65	%
Expected life (years)	2.9		2.9
Volatility	31.90	%	23.30	%

Grant price	$122.73		$119.86
Fair value per share at date of grant	$148.29		$165.71

The performance share awards granted in 2019 are considered performance condition awards as attainment is based on Dover's performance relative to established internal metrics. The fair value of these awards was determined using Dover's closing stock price on the date of grant. The expected attainment of the internal metrics for these awards is analyzed each reporting period, and the related expense is adjusted based on expected attainment, if that attainment differs from previous estimates. The cumulative effect on current and prior periods of a change in attainment is recognized in selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings in the period of change.

~~The fair value and average attainment used in determining stock-based compensation cost for the performance shares issued in 2019 is as follows for the three months ended March 31, 2020:~~


			~~Performance Shares~~
			~~2019~~
~~Fair value per share at date of grant~~			~~$91.20~~
~~Average attainment rate reflected in expense~~			~~209.31%~~

The Company also has granted RSUs, and the fair value of these awards was determined using Dover's closing stock price on the date of grant.

Stock-based compensation is reported within selling, general and administrative expenses in the Condensed Consolidated Statements of Earnings. The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020
Pre-tax stock-based compensation expense	Pre-tax stock-based compensation expense	$	3,252	$	8,182	Pre-tax stock-based compensation expense	$	11,521	$	3,252
Tax benefit	Tax benefit	(349)		(1,048)		Tax benefit	(1,222)		(349)
Total stock-based compensation expense, net of tax	Total stock-based compensation expense, net of tax	$	2,903	$	7,134	Total stock-based compensation expense, net of tax	$	10,299	$	2,903

The increase in stock-based compensation expense for the three months ended March 31, 2021 compared to the prior comparable period was primarily due to plan amendments in the current year accelerating the vesting on shares awarded to retirement-eligible employees and lower performance share attainment rates in the prior year.

1513

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

14. Commitments and Contingent Liabilities

Litigation

Certain of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites identified under federal and state statutes that provide for the allocation of such costs among "potentially responsible parties." In each instance, the extent of the Company’s liability appears to be very small in relation to the total projected expenditures and the number of other "potentially responsible parties" involved and is anticipated to be immaterial to the Company. In addition, certain of the Company’s subsidiaries are involved in ongoing remedial activities at certain current and former plant sites, in cooperation with regulatory agencies, and appropriate estimated liabilities have been established. At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had estimated liabilities totaling ~~$30,233~~$29,296 and ~~$30,608,~~$30,431, respectively, for environmental and other matters, including private party claims for exposure to hazardous substances that are probable and estimable.

The Company and certain of its subsidiaries are also parties to a number of other legal proceedings incidental to their businesses. These proceedings primarily involve claims by private parties alleging injury arising out of use of the Company’s products, patent infringement, employment matters, and commercial disputes. Management and legal counsel, at least quarterly, review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and currently accrued to-date, and the availability and extent of insurance coverage. The Company has estimated liabilities for legal matters that are probable and estimable, and at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, these estimated liabilities were not significant. While it is not possible at this time to predict the outcome of these legal actions, in the opinion of management, based on the aforementioned reviews, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on its financial position, results of operations, or cash flows.

Warranty Accruals

Estimated warranty program claims are provided for at the time of sale of the Company's products. Amounts provided for are based on historical costs and adjusted for new claims and are included within other accrued expenses and other liabilities in the Condensed Consolidated Balance Sheet. The changes in the carrying amount of product warranties through March 31, ~~2020~~2021 and ~~2019,~~2020, were as follows:


		2020		2019			2021		2020
Beginning Balance, December 31 of the Prior Year	Beginning Balance, December 31 of the Prior Year	$	49,116	$	50,073	Beginning Balance, December 31 of the Prior Year	$	51,088	$	49,116
Provision for warranties	Provision for warranties	13,360		13,955		Provision for warranties	18,897		13,360
Settlements made	Settlements made	(15,526)		(14,993)		Settlements made	(17,760)		(15,526)
Other adjustments, including acquisitions and currency translation	Other adjustments, including acquisitions and currency translation	(1,079)		(792)		Other adjustments, including acquisitions and currency translation	(839)		(1,079)
Ending Balance, March 31		$	45,871	$	48,243
Ending balance, March 31						Ending balance, March 31	$	51,386	$	45,871

15. Employee Benefit Plans

Retirement Plans

The Company sponsors qualified defined benefit pension plans covering certain employees of the Company and its subsidiaries, although the U.S. qualified and non-qualified defined benefit plans are closed to new entrants. The plans’ benefits are generally based on years of service and employee compensation. The Company also provides to certain management employees, through non-qualified plans, supplemental retirement benefits in excess of qualified plan limits imposed by federal tax law.

The tables below set forth the components of the Company’s net periodic expense (income) ~~expense~~ relating to retirement benefit plans. The service cost component is recognized within selling, general and administrative expenses and cost of goods and services, depending on the functional area of the underlying employees included in the plans, and the non-operating components of pension costs are included within other income, net in the Condensed Consolidated Statements of Earnings.

1614

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

Qualified Defined Benefits


		Three Months Ended March 31,															Three Months Ended March 31,
		U.S. Plan						Non-U.S. Plans							U.S. Plan				Non-U.S. Plans
		2020		2019		2020		2019			2021		2020		2021		2020
Service cost	Service cost	$	1,706	$	1,754	$	1,293	$	1,545	Service cost	$	1,784	$	1,706	$	1,442	$	1,293
Interest cost	Interest cost	4,068		4,756		825		1,241		Interest cost	3,401		4,068		667		825
Expected return on plan assets	Expected return on plan assets	(7,869)		(8,534)		(1,677)		(1,517)		Expected return on plan assets	(7,245)		(7,869)		(1,799)		(1,677)
Amortization:	Amortization:									Amortization:
Prior service cost (credit)	Prior service cost (credit)	57		76		(119)		(58)		Prior service cost (credit)	53		57		(169)		(119)
Recognized actuarial loss	Recognized actuarial loss	1,884		—		742		816		Recognized actuarial loss	2,503		1,884		1,000		742

Net periodic (income) expense		$	(154)	$	(1,948)	$	1,064	$	2,027
Net periodic expense (income)										Net periodic expense (income)	$	496	$	(154)	$	1,141	$	1,064

Non-Qualified Supplemental Benefits

Three Months Ended March 31,
2020 2019
Service cost $ 318 $ 486
Interest cost 441 668
Amortization:
Prior service cost 424 703
Recognized actuarial gain (464) (570)
Net periodic expense $ 719 $ 1,287

~~Post-Retirement Benefit Plans~~

The Company also maintains post-retirement benefit plans, although these plans are closed to new entrants. The supplemental and post-retirement benefit plans are supported by the general assets of the Company. The following table sets forth the components of the Company’s net periodic expense relating to its post-retirement benefit plans:

Three Months Ended March 31,
2020 2019
Service cost $ 5 $ 5
Interest cost 60 78
Amortization:
Prior service cost 3 3
Recognized actuarial gain (4) (18)
Net periodic expense $ 64 $ 68

The total amount amortized out of accumulated other comprehensive earnings into net periodic pension and post-retirement expense totaled $2,523 and $952 for the three months ended March 31, 2020 and 2019, respectively.


	Three Months Ended March 31,
	2021		2020
Service cost	$	390	$	318
Interest cost	308		441
Amortization:
Prior service cost	383		424
Recognized actuarial gain	(418)		(464)

Net periodic expense	$	663	$	719

Defined Contribution Retirement Plans

The Company also offers defined contribution retirement plans which cover the majority of its U.S. employees, as well as employees in certain other countries. The related expense is recognized within selling, general and administrative expenses and cost of goods and services, depending on the functional area of the underlying employees included in the plans. The Company’s expense relating to defined contribution plans ~~were~~was $15,061 and $14,048 ~~and $12,906~~ for the three months ended March 31, ~~2020~~2021 and ~~2019, respectively.~~2020.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

16. Other Comprehensive Earnings

~~The amounts recognized in other comprehensive (loss) earnings were as follows:~~

Three Months Ended Three Months Ended
March 31, 2020 March 31, 2019
Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Foreign currency translation adjustments $ (88,415) $ (5,139) $ (93,554) $ 49,786 $ (747) $ 49,039
Pension and other post-retirement benefit plans 2,523 (568) 1,955 952 (205) 747
Changes in fair value of cash flow hedges (5,074) 1,121 (3,953) 2,993 (629) 2,364
Total other comprehensive (loss) earnings $ (90,966) $ (4,586) $ (95,552) $ 53,731 $ (1,581) $ 52,150

~~Total comprehensive earnings were as follows:~~

Three Months Ended March 31,
2020 2019
Net earnings $ 176,279 $ 105,705
Other comprehensive (loss) earnings (95,552) 52,150
Comprehensive earnings $ 80,727 $ 157,855

Amounts reclassified from accumulated other comprehensive loss to earnings during the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Three Months Ended March 31,
2020 2019
Foreign currency translation:
Reclassification of foreign currency translation losses to earnings for assets held for sale $ — $ 25,339
Tax benefit — —
Net of tax $ — $ 25,339
Pension and other postretirement benefit plans:
Amortization of actuarial losses $ 2,158 $ 228
Amortization of prior service costs 365 724
Total before tax 2,523 952
Tax benefit (568) (205)
Net of tax $ 1,955 $ 747
Cash flow hedges:
Net losses (gains) reclassified into earnings $ 1,420 $ (291)
Tax (benefit) provision (299) 61
Net of tax $ 1,121 $ (230)

The reclassification of foreign currency translation losses to earnings during the three months ended March 31, 2019 relates to the sale of Finder. See Note 4 — Disposed Operations for further details.


	Three Months Ended March 31,
	2021		2020




Pension and other postretirement benefit plans:
Amortization of actuarial losses	$	3,085	$	2,158
Amortization of prior service costs	270		365

Total before tax	3,355		2,523
Tax benefit	(773)		(568)
Net of tax	$	2,582	$	1,955
Cash flow hedges:
Net (gains) losses reclassified into earnings	$	(1,833)	$	1,420
Tax provision (benefit)	422		(299)
Net of tax	$	(1,411)	$	1,121

The Company recognizes the amortization of net actuarial gains and losses and prior service costs in other income, net within the Condensed Consolidated Statements of Earnings.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

Cash flow hedges consist mainly of foreign currency forward contracts. The Company recognizes the realized gains and losses on its cash flow hedges in the same line item as the hedged transaction, such as revenue, cost of goods and services, or selling, general and administrative expenses.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

17. Segment Information

The Company categorizes its operating companies into 5 reportable segments as follows:

•Engineered Products segment is a provider of a wide range of products, software and services that have broad customer applications across a number of markets, including aftermarket vehicle service, solid waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing.

•Fueling Solutions segment is focused on providing components, equipment and software and service solutions enabling safe transport of fuels and other hazardous fluids along the supply chain, as well as the safe and efficient operation of retail fueling and vehicle wash establishments.

•Imaging & Identification segment supplies precision marking and coding, product traceability and digital textile printing equipment, as well as related consumables, software and services.

•Pumps & Process Solutions segment manufactures specialty pumps, fluid handling components, plastics and polymer processing equipment, single use pumps, flow meters and connectors, and highly engineered components for rotating and reciprocating machines.

•Refrigeration & Food Equipment segment is a provider of innovative and energy-efficient equipment and systems that serve the commercial refrigeration, heating and cooling and food equipment markets.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

Segment financial information and a reconciliation of segment results to consolidated results was as follows:


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020
Revenue:	Revenue:					Revenue:
Engineered Products	Engineered Products	$	408,160	$	418,851	Engineered Products	$	428,127	$	408,160
Fueling Solutions	Fueling Solutions	359,982		373,050		Fueling Solutions	389,678		359,982
Imaging & Identification	Imaging & Identification	256,765		268,354		Imaging & Identification	284,328		256,765
Pumps & Process Solutions	Pumps & Process Solutions	319,536		330,219		Pumps & Process Solutions	394,377		319,536
Refrigeration & Food Equipment	Refrigeration & Food Equipment	311,913		334,643		Refrigeration & Food Equipment	372,077		311,913
Intra-segment eliminations	Intra-segment eliminations	(417)		(360)		Intra-segment eliminations	(686)		(417)
Total consolidated revenue	Total consolidated revenue	$	1,655,939	$	1,724,757	Total consolidated revenue	$	1,867,901	$	1,655,939
Net earnings:	Net earnings:					Net earnings:
Segment earnings (EBIT): ⁽¹⁾	Segment earnings (EBIT): ⁽¹⁾					Segment earnings (EBIT): (1)
Engineered Products	Engineered Products	$	69,094	$	67,119	Engineered Products	$	68,779	$	69,094
Fueling Solutions	Fueling Solutions	53,498		37,230		Fueling Solutions	66,480		53,498
Imaging & Identification	Imaging & Identification	51,482		55,955		Imaging & Identification	56,992		51,482
Pumps & Process Solutions ⁽²⁾	Pumps & Process Solutions ⁽²⁾	66,079		14,991		Pumps & Process Solutions ⁽²⁾	123,645		66,079
Refrigeration & Food Equipment⁽³⁾⁽²⁾	Refrigeration & Food Equipment⁽³⁾⁽²⁾	23,529		24,807		Refrigeration & Food Equipment⁽³⁾⁽²⁾	38,117		23,529
Total segment earnings (EBIT)	Total segment earnings (EBIT)	263,682		200,102		Total segment earnings (EBIT)	354,013		263,682
Corporate expense / other ⁽⁴⁾⁽³⁾	Corporate expense / other ⁽⁴⁾⁽³⁾	24,097		30,866		Corporate expense / other ⁽⁴⁾⁽³⁾	38,620		24,097
Interest expense	Interest expense	27,268		31,808		Interest expense	26,823		27,268
Interest income	Interest income	(1,183)		(890)		Interest income	(680)		(1,183)
Earnings before provision for income taxes	Earnings before provision for income taxes	213,500		138,318		Earnings before provision for income taxes	289,250		213,500
Provision for income taxes	Provision for income taxes	37,221		32,613		Provision for income taxes	56,481		37,221
Net earnings	Net earnings	$	176,279	$	105,705	Net earnings	$	232,769	$	176,279

⁽¹⁾Segment earnings (EBIT) includes non-operating income and expense directly attributable to the segments. Non-operating income and expense includes gain on sale of a business and other income, net.

⁽²⁾ The three months ended March 31, ~~2019~~2020 includes ~~a $46,946 loss on assets held for sale for Finder.~~

⁽³⁾ ~~The~~ ~~three months ended March 31, 2020~~ i~~ncludes~~ a $6,551 gain on the sale of AMS Chino.

⁽⁴⁾(3) Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services overhead costs, deal related expenses and various administrative expenses relating to the corporate headquarters.

The following table presents revenue disaggregated by geography based on the location of the Company's customer:


	Three Months Ended March 31,
Revenue by geography	2021		2020
United States	$	1,036,014	$	956,640
Europe	445,295		361,166
Asia	192,107		154,275
Other Americas	130,177		129,049
Other	64,308		54,809
Total	$	1,867,901	$	1,655,939

18. Share Repurchases

In November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares beginning on January 1, 2021 through December 31, 2023. This share repurchase authorization replaced the February 2018 share repurchase authorization.

During the three months ended March 31, 2021, the Company repurchased 182,951 shares of common stock at a total cost of $21,637, or $118.27 per share. During the three months ended March 31, 2020, the Company repurchased 548,659 shares of common stock at a total cost of $52,916, or $96.45.

Table of Contents

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

~~The following table presents revenue disaggregated by geography based on the location of the Company's customer:~~

Three Months Ended March 31,
Revenue by geography 2020 2019
United States $ 956,640 $ 919,892
Europe 361,166 402,645
Asia 154,275 196,350
Other Americas 129,049 138,118
Other 54,809 67,752
Total $ 1,655,939 $ 1,724,757

~~18. Share Repurchases~~

In February 2018, the Company's Board of Directors approved a standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares of its common stock through December 31, 2020. This share repurchase authorization replaced the January 2015 share repurchase authorization.

During the three months ended March 31, 2020, under the February 2018 authorization, the Company repurchased 548,659 shares of common stock at a total cost of $52,916, or $96.45 per share. There were no repurchases under the February 2018 authorization during the three months ended March 31, 2019. The Company has suspended further repurchases as a result of business uncertainty related to COVID-19.

As of March 31, ~~2020, 7,811,385~~2021, 19,817,049 shares remain authorized for repurchase under the ~~February 2018~~November 2020 share repurchase authorization.

19. Earnings per Share

The following table sets forth a reconciliation of the information used in computing basic and diluted earnings per share:


		Three Months Ended March 31,							Three Months Ended March 31,
		2020		2019			2021		2020

Net earnings	Net earnings	$	176,279	$	105,705	Net earnings	$	232,769	$	176,279
Basic earnings per common share:	Basic earnings per common share:					Basic earnings per common share:

Net earnings	Net earnings	$	1.22	$	0.73	Net earnings	$	1.62	$	1.22

Weighted average shares outstanding	Weighted average shares outstanding	144,259,000		145,087,000		Weighted average shares outstanding	143,765,000		144,259,000
Diluted earnings per common share:	Diluted earnings per common share:					Diluted earnings per common share:

Net earnings	Net earnings	$	1.21	$	0.72	Net earnings	$	1.61	$	1.21

Weighted average shares outstanding	Weighted average shares outstanding	145,782,000		146,911,000		Weighted average shares outstanding	144,938,000		145,782,000

The following table is a reconciliation of the share amounts used in computing earnings per share:


		Three Months Ended March 31,				Three Months Ended March 31,
		2020	2019		2021	2020
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	144,259,000	145,087,000	Weighted average shares outstanding - Basic	143,765,000	144,259,000
Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs	Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs	1,523,000	1,824,000	Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs	1,173,000	1,523,000
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	145,782,000	146,911,000	Weighted average shares outstanding - Diluted	144,938,000	145,782,000

Diluted earnings per share amounts are computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of SARs and vesting of performance shares and RSUs, as determined using the treasury stock method.

The weighted average number of anti-dilutive potential common shares excluded from the calculation above were approximately ~~65,000~~88,000 and ~~42,000~~65,000 for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Amounts in thousands except share data and where otherwise indicated) (Unaudited)~~

20. Recent Accounting Pronouncements

Recently ~~Adopted~~Issued Accounting Standards

In ~~June 2016,~~March 2020, the FASB issued ASU No. ~~2016-13, Financial Instruments - Credit Losses~~2020-04, Reference Rate Reform (Topic ~~326): Measurement~~848) Facilitation of ~~Credit Losses~~the Effects of Reference Rate Reform on Financial ~~Instruments, which amends~~Reporting. The purpose of this update is to provide optional guidance for a limited time to ease the ~~impairment model~~potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by ~~requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on~~reference rate reform if certain types of financial instruments, including trade receivables. This resulted in the earlier recognition of allowances for losses. In addition, the FASB issued ASU 2019-04, Codification Improvements to Topic 326 which provides clarity on certain aspects of thecriteria are met. The amendments in this update are elective and are effective upon issuance for all entities. Management is evaluating the impact of this ASU ~~2016-13. The Company adopted~~and does not expect this ~~guidance prospectively on January 1, 2020. Upon adoption, the Company recorded~~update to have a ~~noncash cumulative effect adjustment to retained earnings of $2.1 million, net of $0.6 million of income taxes,~~material impact on the ~~opening consolidated balance sheet as of January 1, 2020. See Note 7 — Credit Losses for further details.~~Company's Consolidated Financial Statements.

21. Subsequent ~~Events~~Event

~~Subsequent to March 31, 2020,~~On April 19, 2021, the Company ~~reduced production at our operations in response to COVID-19 related government mandates, reduced demand conditions~~completed the acquisition of AvaLAN Wireless Systems Incorporated ("AvaLAN"), a leading provider of highly-secure wireless and ~~other operational drivers in several of our businesses. This resulted in temporary, partial closures of several facilities~~wired Ethernet solutions, managed routers, software-as-a-service and cloud-based services, for approximately $40.0 million. AvaLAN will be included in the U.S. and Europe across our business. Meanwhile, certain facilities that were closed as of March 31, 2020 have re-opened. The extent of the impact of the COVID-19 outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are uncertain and cannot be fully predicted at this time.Fueling Solutions segment.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Refer to the section below entitled "Special Notes Regarding Forward-Looking Statements" for a discussion of factors that could cause our actual results to differ from the forward-looking statements contained below and throughout this quarterly report.

Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we refer to measures used by management to evaluate performance as well as liquidity, including a number of financial measures that are not defined under accounting principles generally accepted in the United States of America ("GAAP"). We believe these measures provide investors with important information that is useful in understanding our business results and trends. Explanations within this MD&A provide more details on the use and derivation of these measures.

On March 11, 2020, the World Health Organization declared the outbreak of the novel coronavirus ("COVID-19") a pandemic. The COVID-19 outbreak and associated counter-acting measures implemented by governments around the world, as well as increased business uncertainty, are having an adverse impact on our financial results and are discussed in more detail below.

OVERVIEW

Dover is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions, and Refrigeration & Food Equipment. The Company's entrepreneurial business model encourages, promotes and fosters deep customer engagement and collaboration, which has led to Dover's well-established and valued reputation for providing superior customer service and industry-leading product innovation. Unless the context indicates otherwise, references herein to "Dover," "the Company," and words such as "we," "us," or "our" include Dover Corporation and its consolidated subsidiaries.

Dover's five operating segments are as follows:

•Our Engineered Products segment is a provider of a wide range of products, software and services that have broad customer applications across a number of markets, including aftermarket vehicle service, solid waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing.

•Our Fueling Solutions segment is focused on providing components, equipment and software and service solutions enabling safe transport of fuels and other hazardous fluids along the supply chain, as well as the safe and efficient operation of retail fueling and vehicle wash establishments.

•Our Imaging & Identification segment supplies precision marking and coding, product traceability and digital textile printing equipment, as well as related consumables, software and services.

•Our Pumps & Process Solutions segment manufactures specialty pumps, fluid handling components, plastics and polymer processing equipment, single use pumps, flow meters and connectors, and highly engineered components for rotating and reciprocating machines.

•Our Refrigeration & Food Equipment segment is a provider of innovative and energy-efficient equipment and systems that serve the commercial refrigeration, heating and cooling and food equipment markets.

In the first quarter of ~~2020,~~2021, revenue was ~~$1.7~~$1.9 billion, which ~~decreased $68.8~~increased $212.0 million, or ~~4.0%~~12.8%, as compared to the first quarter of ~~2019. Results were~~2020. This was driven by an organic revenue ~~decline~~growth of ~~2.7%~~8.8%, ~~an unfavorable~~a favorable impact from foreign currency translation of ~~1.4%~~3.1%, and acquisition-related revenue growth of 1.2%. This increase was partially offset by a ~~0.7%~~0.3% impact due to dispositions. ~~This growth was partially offset by acquisition-related revenue growth of 0.8%.~~

The ~~2.7%~~8.8% organic revenue ~~decline was broad based across our segments, compared to strong sales performance in~~growth for the ~~comparable~~ first quarter of ~~2019 of 5.3% revenue growth, in which organic revenue growth~~2021 was ~~8.3%, and the current quarter decline was also due to the slowing demand environment in several of~~broad-based across our ~~end-markets driven by the outbreak of COVID-19.~~segments. The Imaging & Identification and Refrigeration & Food Equipment segments both experienced organic revenue decline of 4.3%, reflecting primarily weaker demand for textile digital printing equipment and for commercial foodservice and heat exchange equipment, respectively. Fueling Solutions segment organic revenue declined 2.6% which was driven by weaker demand for transportation, vehicle wash and underground retail fueling equipment. Engineered Products segment organic revenue declined 1.9% as a result of a slowing of demand in industrial automation and winch markets, as well as vehicle aftermarket, partially offset by strong performance in our waste handling business. Pumps & Process Solutions segment had organic revenue growth of 18.4% as a result of strength in biopharma pumps and connectors, and increased demand for industrial pumps and plastics & polymer processing solutions, partially offset by a prolonged recovery in precision components. The Refrigeration & Food Equipment segment posted organic revenue growth of 18.3% primarily driven by robust demand across key markets such as food retail, can-shaping equipment, and heat exchangers, while organic revenue declined for commercial foodservice equipment. The Imaging & Identification segment experienced growth in organic revenue of 3.7% primarily driven by growth in marking & coding equipment and consumables supported by increased demand for serialization and traceability software, partially offset by declines in our digital textile printing business caused by ongoing disruption in the apparel retail industry. The Fueling Solutions segment had organic revenue growth of 3.0% driven by sustained strength in retail fueling and improving demand in vehicle wash solutions. The Engineered Products segment had organic revenue growth of 2.3% primarily as a result of continued strength in vehicle services, industrial automation and

2219

Table of Contents

~~revenue declined 1.1% as~~aerospace and defense businesses, partially offset by a ~~result of reduced demand for pumps~~prolonged recovery in our industrial winch business and ~~precision components, including from the oil & gas industry.~~lower shipments in our waste handling business due to lower beginning backlog and supply chain constraints.

From a geographic perspective, in the first quarter, organic revenue for the U.S., our largest market, ~~grew 4%, while organic~~increased 6.9%. Organic revenue in Asia and Europe grew 19.8% and ~~Asia declined 7% and 19% respectively, year over year. U.S.~~12.7%, respectively. This organic growth was driven primarily by strength in our Fueling Solutions and Engineered Products segments, partially offset by a slight decline in our Refrigeration & Food Equipment segment. The decline in Europe was broad-based across four segments, except Pumps and Process Solutions, asdue to improved market conditions since the region faced significant operational and demand headwinds from the developing pandemic. The decline in Asia was driven mainly by a sharp decline in China and weakness in India across all segments as a result of the outbreak of COVID-19.prior year.

Bookings were ~~$1.8~~$2.3 billion for the three months ended March 31, ~~2020, flat~~2021, an increase of $547.6 million, or 30.7% compared to the prior year comparable period. Included in this result was organic growth of ~~0.9%~~26.5%, ~~acquisition-related bookings growth of 1.0%, offset by an unfavorable~~a favorable impact from foreign currency translation of ~~1.2%~~3.0%, and acquisition-related bookings growth of 1.5%, partially offset by a ~~0.7%~~0.3% impact due to dispositions. ~~Organic bookings growth was~~Bookings grew organically in all five segments primarily ~~due to robust activity~~as a result of strong demand and order intake in ~~our Fueling Solutions segment as well as growth in our Pumps & Process Solutions segment, offset by a decline in our Refrigeration & Food Equipment and Engineered Products segments.~~most end markets. Backlog as of March 31, ~~2020~~2021 was ~~$1.6~~$2.2 billion, an increase from ~~$1.4~~$1.6 billion ~~from~~in the prior year. See definition of bookings and backlog within "Segment Results of Operations".

~~During the three months ended March 31, 2020, we acquired Sys-Tech Solutions, Inc. ("Systech") and So. Cal. Soft-Pak, Incorporated ("Soft-Pak") Software Solutions for an aggregate price~~Rightsizing charges of ~~$208.4~~$4.2 million net of cash acquired. Systech is a leading provider of software and solutions for product traceability, regulatory compliance and brand protection and will strengthen the portfolio of solutions offered by our Imaging & Identification segment to customers in the pharmaceutical and consumer products industries. Soft-Pak is a leading specialized provider of integrated back office, route management and customer relationship management software solutions to the waste and recycling fleet industry and will further strengthen the digital offerings of our waste handling business in our Engineered Products segment.

During the three months ended March 31, 2020, we divested the Chino, California branch of The AMS Group ("AMS Chino"), a regional aftermarket refrigeration services and solutions provider based in Southern California. The AMS Group was a wholly owned subsidiary, which was part of our Refrigeration & Food Equipment segment. We sold the business and recorded a pre-tax gain on sale of $6.6 million.

~~During the three months ended March 31, 2020, we continued to execute on our previously announced rightsizing programs to further optimize operations. Rightsizing charges~~ included restructuring costs of ~~$7.3~~$6.4 million ~~and~~less other ~~costs~~benefits of ~~$0.5~~$2.3 million for the three months ended March 31, ~~2020.~~2021. Restructuring expense ~~was comprised~~and other rightsizing benefits were primarily a result of ~~broad-based selling, general and administrative expense reduction initiatives~~continued actions taken in response to lower demand during 2020, asset charges related to a product line exit, and broad-based operational efficiency initiatives focusing on footprint consolidation ~~operational optimization~~ and IT centralization. ~~These restructuring charges were broad-based across all segments as well as corporate. We expect to incur $6 million~~Rightsizing benefits principally resulted from gain on sale of ~~restructuring charges during~~assets in the ~~remainder of 2020 for these initiatives.~~quarter.

We also purchased 0.5 million shares of our common stock for a total cost of $52.9 million, or $96.45 per share, during the three months ended March 31, 2020. We have suspended repurchases as a result of business uncertainty related to COVID-19.COVID-19 Update

The ~~recent~~global COVID-19 outbreak ~~of COVID-19 has resulted~~ and ~~will continue to result in significant economic disruption~~associated countermeasures implemented by governments around the world, as well as increased business uncertainty, had an adverse impact on our financial results during 2020 through global shutdowns and ~~has and will adversely affect our business, including our~~ supply chain and ~~operations.~~operational disruptions. We ~~also have experienced~~took a variety of actions during 2020 to help mitigate the financial impact, including executing temporary cost savings measures, reducing our capital spending, initiating restructuring actions and ~~expect to continue to experience reductions~~proactively managing our working capital. Activity in ~~customer~~many of the end markets we serve sequentially improved as 2020 progressed, and this trend continued in the first quarter of 2021, although demand in ~~several of our end-markets. We expect that the social distancing measures, the reduced operational status of our suppliers~~certain businesses such as digital textile printing, food equipment and ~~reductions in production at certain facilities will more meaningfully impact our operations~~industrial winch is expected to take longer to recover with improvement expected in the second ~~quarter, and general business uncertainty will continue to negatively impact demand in several~~half of our end-markets in the second quarter, and possibly beyond. During the first quarter, the impact of COVID-19 on Dover's businesses was most pronounced in China and Italy, where we experienced interruption of our operations due to regulatory requirements as well as weakening demand and supply chain difficulties.2021.

~~Table of Contents~~

Our foremost focus has been on the health and safety of our employees ~~business partners~~throughout the pandemic and ~~customers. In response~~we will continue to maintain the ~~outbreak,~~safety protocols we established, ~~a central~~including encouraging our associates to seek vaccination when eligible. Our core global response team, initiated enhanced health and safety measures across our facilities and enacted information technology ("IT") security protocols in response to new “work-from-home” patterns for office staff. More specifically, we have modified practices at our manufacturing locations ~~and offices to adhere to~~remained fully operational during the first quarter. As guidance from authorities such as the U.S. Centers for Disease Control and Prevention and local health and governmental authorities with respect to social distancing, physical separation, personal protective equipment and sanitization, and have restricted the number of employees permitted in common areas at any given time. Further,or World Health Organization evolves, we will update our practices accordingly, as we have enhanced our operational excellence model by memorializing our approach to sanitized manufacturing which includes procedures for dealing with confirmed COVID-19 cases, compliance auditing, and manufacturing line design. We are approaching our response to this outbreak with a recognition that our operating companies provide essential and important products and services on which our customers and broader society rely upon daily to support crucial functions. For example:done throughout the pandemic.

•~~Our Engineered Products segment includes our waste handling business that provides a broad range of products and services to support municipal waste collection.~~

•~~Our Fueling Solutions segment supports the ongoing operation of gas stations and broader fuel supply chain with equipment, components and services.~~

•Our Imaging & Identification segment supplies equipment, consumables and services that enable the food and personal goods industries to comply with product marking regulations and provide product identification and traceability for consumers (such as product expiration dates).

•Our Pumps & Process Solutions segment include businesses in the biopharma and medical markets that produce components that are used in the research and production of pharmaceuticals. Other businesses provide products for diluting and dispensing chemicals specifically used for facility cleaning and sanitizing, equipment and components that support the safe operation of paper production plants, chemical facilities, fuel refineries and many other industries and equipment that supports the recycling of plastic waste.

•~~Our Refrigeration & Food Equipment segment supports food stores with refrigeration equipment, parts and services.~~

Accordingly, we consider our companies to be essential suppliers to our customers and business partners and therefore most of our U.S. and global facilities have remained substantially operational during the outbreak while implementing enhanced safety protocols designed to protect the well-being of our employees. Operations at the facilities in countries with broad-based mandated shutdowns (China, Italy, India, Malaysia) were suspended for a portion of the first quarter.

As of March 31, 2020, approximately 78% of our major global facilities (by count) were fully operational, approximately 9% were partially operational, and the remaining 13% were fully closed. From a geographic perspective, U.S. production continues for most of our businesses. However, in March, in the U.S., we voluntarily closed a plant serving the automotive industry as the customer base has largely temporarily ceased operation, and we closed our plants serving the vehicle wash industry due to local government mandates. In Italy, while operations have been suspended since mid-to-late March due to government mandates, we anticipate resuming at least some limited operations in the second quarter. In China, all operations were halted in late January and early February, but were back to fully operational by early March and we expect to see improvement in the currently lagging demand environment. To a lesser extent (due to a smaller scale presence), we have also been impacted by government-mandated shutdowns in India and Malaysia.

Subsequent to March 31, 2020, we have continued to reduce production at operations in several of our businesses in response to government mandates, reduced demand conditions and other operational drivers. This resulted in temporary, partial closures of several facilities in the U.S. and Europe (across the Fueling Solutions, Engineered Products and Refrigeration & Food Equipment segments). As of April 17, 2020, 7% of our major global facilities (by count) were closed completely and 11% were partially closed or operated with a reduced capacity. Meanwhile, certain facilities that were closed as of March 31, 2020 have re-opened. We anticipate that we will experience additional temporary shut-downs in Europe and in the U.S. in the second quarter.

Beginning in early-to-mid-March 2020, the commercial paper market began to experience very high levels of volatility as a result of COVID 19-related uncertainties. As a result, on March 16, 2020, in the spirit of prudent liquidity management, we borrowed $500 million due May 19, 2020 under our $1 billion revolving credit facility, even though we have no long-term debt maturities until 2025. Proceeds from the borrowing were used to repay all of our outstanding commercial paper and for general corporate purposes. See "Financial Condition - Capitalization" for further discussion.

2420

Table of ~~Contents~~

While we are encouraged that approximately 30% of our overall revenue represents recurring demand, which includes parts, consumables, services and software, we expect a weak demand environment in the second quarter and likely into the third quarter in several of our end-markets, such as the commercial refrigeration, vehicle service and apparel and textile printing markets. We are taking steps across the portfolio and at the corporate center to reduce our controllable costs, including short-term actions to reduce labor costs, including ~~furloughs,~~ eliminating non-essential travel and reducing discretionary spend. Additionally, we are proactively managing our working capital and have significantly reduced our capital spending plan for the year, without deferring strategic ongoing initiatives. We also continue to monitor government economic stabilization efforts and expect to participate in certain legislative provisions, such as deferring estimated tax payments to later in the year or the following two years and utilizing job retention subsidies.

The extent of the impact of the COVID-19 outbreak on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, its impact on our customers and suppliers and the range of governmental and community reactions to the pandemic, which are uncertain and cannot be fully predicted at this time. We will continue to proactively respond to the situation and may take further actions that alter our business operations as may be required by governmental authorities, or that we determine are in the best interests of our employees and customers.

~~Table of~~ Contents

CONSOLIDATED RESULTS OF OPERATIONS


		Three Months Ended March 31,															Three Months Ended March 31,
(dollars in thousands, except per share data)	(dollars in thousands, except per share data)	2020			2019			% Change		(dollars in thousands, except per share data)	2021			2020			% Change
Revenue	Revenue	$	1,655,939		$	1,724,757		(4.0)	%	Revenue	$	1,867,901		$	1,655,939		12.8	%
Cost of goods and services	Cost of goods and services	1,043,696			1,101,215			(5.2)	%	Cost of goods and services	1,146,353			1,043,696			9.8	%
Gross profit	Gross profit	612,243			623,542			(1.8)	%	Gross profit	721,548			612,243			17.9	%
Gross profit margin	Gross profit margin	37.0		%	36.2		%	0.8		Gross profit margin	38.6		%	37.0		%	1.6

Selling, general and administrative expenses	Selling, general and administrative expenses	386,941			408,466			(5.3)	%	Selling, general and administrative expenses	408,998			386,941			5.7	%
Selling, general and administrative expenses as a percent of revenue	Selling, general and administrative expenses as a percent of revenue	23.4		%	23.7		%	(0.3)		Selling, general and administrative expenses as a percent of revenue	21.9		%	23.4		%	(1.5)
Loss on assets held for sale		—			46,946			nm*

Operating earnings	Operating earnings	225,302			168,130					Operating earnings	312,550			225,302
Interest expense	Interest expense	27,268			31,808			(14.3)	%	Interest expense	26,823			27,268			(1.6)	%
Interest income	Interest income	(1,183)			(890)			32.9	%	Interest income	(680)			(1,183)			(42.5)	%
Gain on sale of a business	Gain on sale of a business	(6,551)			—			nm*		Gain on sale of a business	—			(6,551)			nm*
Other income, net	Other income, net	(7,732)			(1,106)			nm*		Other income, net	(2,843)			(7,732)			nm*
Earnings before provision for income taxes	Earnings before provision for income taxes	213,500			138,318			54.4	%	Earnings before provision for income taxes	289,250			213,500			35.5	%
Provision for income taxes	Provision for income taxes	37,221			32,613			14.1	%	Provision for income taxes	56,481			37,221			51.7	%
Effective tax rate	Effective tax rate	17.4		%	23.6		%	(6.2)		Effective tax rate	19.5		%	17.4		%	2.1

Net earnings	Net earnings	$	176,279		$	105,705		66.8	%	Net earnings	232,769			176,279			32.0	%

Net earnings per common share - diluted	Net earnings per common share - diluted	$	1.21		$	0.72		68.1	%	Net earnings per common share - diluted	$	1.61		$	1.21		33.1	%

* nm - not meaningful

Revenue

InRevenue for the ~~first quarter of 2020, revenue decreased $68.8~~three months ended March 31, 2021 increased $212.0 million, or ~~4.0%~~12.8%, from the prior year comparable ~~period.~~quarter. Results included an organic revenue ~~decline~~growth of ~~2.7% across all our segments~~8.8% primarily ~~due to the adverse impact of the recent outbreak of COVID-19. Acquisition-related revenue growth was 0.8%~~ led by our ~~Imaging & Identification and Pumps & Process Solutions segments, partially offset by an unfavorable impact from foreign currency translation of 1.4% and a 0.7% impact from dispositions within the~~ Pumps & Process Solutions and Refrigeration & Food Equipment segments. Acquisition-related revenue growth of 1.2%, led by our Fueling Solutions and Imaging & Identification segments, along with a favorable impact from foreign currency translation of 3.1%, was slightly offset by a 0.3% impact from a disposition within the Refrigeration & Food Equipment segment. Customer pricing favorably impacted revenue by ~~approximately 0.7%~~approximately 0.8% in the first quarter of ~~2020.~~2021.

Gross Profit

Gross profit for the three months ended March 31, ~~2020 decreased $11.3~~2021 increased $109.3 million, or ~~1.8%~~17.9%, and gross profit margin increased 160 basis points to 38.6%, from the prior year comparable ~~period, primarily~~quarter, due to an organic revenue ~~decline of 2.7%,~~growth primarily driven by strong market conditions and improved demand, favorable operating leverage and product mix, and benefits from productivity and cost reduction actions, partially offset by increased material and inflation costs due to the impact of COVID-19, partially offset by pricing initiatives, benefits from productivity initiatives and rightsizing actions and cost containment actions. Gross profit margin increased 80 basis points to 37.0% for the three months ended March 31, 2020 from the comparable period primarily due to benefits from productivity initiatives and rightsizing costs and cost containment actions. We are managing the operating plants' production aggressively to match demand.logistics costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, ~~2020 decreased $21.5~~2021 increased $22.1 million, or ~~5.3%~~5.7%, from the prior year comparable ~~period,~~ quarter, primarily due to adjustments to variable compensation to reflect current performance partially offset by a ~~reduction~~decrease in ~~discretionary and planned spend and benefits from rightsizing actions.~~restructuring costs. As a percentage of revenue, selling, general and administrative expenses d~~ecreased 30~~decreased 150 basis points to ~~23.4%, reflecting~~21.9% due to an increase in the ~~decrease in expenses.~~ ~~We are taking proactive cost reduction efforts as we monitor the impact of COVID-19. We expect the second quarter to require continued and more significant actions to reduce costs to offset~~ revenue ~~decline and under-absorption of production fixed overhead, such as further reducing discretionary spend and headcount to match demand.~~base.

Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to ~~$35.5~~$41.2 million and ~~$34.6~~$35.5 million for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. These costs as a percent of revenue were ~~2.1%~~2.2% and ~~2.0%~~2.1% for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

2621

Table of Contents

~~Loss on assets held for sale~~

On ~~March 29, 2019, we~~ ~~entered into a definitive agreement to sell Finder Pompe S.r.l. ("Finder") for total consideration of approximatel~~y $23.6 million net of estimated selling costs. As of March 31, 2019, Finder met the criteria to be classified as held for sale and based on the total consideration from the sale, net of selling costs, we recorded a loss on the assets held for sale of $46.9 million. Th~~e loss was comprised of an impairment on assets held for sale of $21.6 million and foreign currency translation losses reclassified from accumulated other comprehensive losses to current earnings of $25.3 million. We subsequently sold Finder on April 2, 2019, which generated total cash proceeds of $24.2 million.~~

Gain on sale of a business

On March 6, 2020, we sold the ~~Company sold~~Chino, California branch of The AMS ~~Chino~~Group ("AMS Chino") within the Refrigeration & Food Equipment segment for ~~net cash proceeds~~total consideration of $16.9 ~~million, of which~~million. A gain ~~on sale~~ of $6.6 million was ~~recognized.~~recognized on this sale. The disposal did not represent a strategic shift in operations and, therefore, did not qualify for presentation as discontinued operations.

Other income, net

Other income, net for the three months ended March 31, ~~2020 increased $6.6~~2021 decreased $4.9 million respectively from the prior year comparable period primarily due to ~~increased~~ foreign exchange ~~gains~~losses from the remeasurement of foreign currency denominated ~~balances and increased earnings from our equity method investments.~~balances.

Income Taxes

The effective tax rates for the three months ended March 31, 2021 and 2020 were 19.5% and ~~2019 were~~ 17.4% ~~and 23.6%~~, respectively. The ~~decrease~~increase in the effective tax rate for the three months ended March 31, ~~2020~~2021 relative to the prior year comparable ~~period~~quarter was primarily driven by favorable audit ~~settlements.~~settlements in the prior year. See Note 12 — Income Taxes.

~~The three months ended March 31, 2019 includes a discrete tax benefit from stock exercises, partially offset by the exclusion of capital losses on the sale of Finder under local tax law.~~

Net earnings

Net earnings for the three months ended March 31, ~~2020~~2021 increased ~~66.8%~~ 32.0% to $232.8 million, or $1.61 diluted earnings per share, from $176.3 million, or $1.21 diluted earnings per share, from ~~$105.7 million, or $0.72 diluted earnings per share, from~~ the prior year comparable ~~period.~~quarter. The increase in net earnings ~~was~~is mainly attributable to strong demand and robust recovery from prior year market conditions resulting in strong broad-based organic growth, favorable pricing initiatives and product mix, and benefits from productivity and rightsizing actions, and broad-based cost reductions, as well a loss on assets held for sale of $46.9 million in the prior period. These benefits were partially offset by reduced volume due to the impact of COVID-19 and increased material and inflation costs.restructuring actions.

~~Table of Contents~~

Rightsizing Activities, which includes Restructuring and Other Costs

During the three months ended March 31, 2021, rightsizing activities included restructuring charges of $6.4 million and other benefits of $2.3 million. Restructuring expense was comprised primarily of new actions initiated in 2020 in response to lower demand conditions, asset charges related to a product line exit and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization. Other benefits were comprised primarily of gain on sale of assets of $2.0 million and $1.3 million in our Pumps & Process Solutions and Refrigeration & Food Equipment segments, respectively, as a result of restructuring actions, partially offset by $1.0 million of restructuring related costs. These rightsizing charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings. Additional programs beyond the scope of the announced programs may be implemented during 2021 with related restructuring charges.

We recorded the following rightsizing costs for the three months ended March 31, 2021:


	Three Months Ended March 31, 2021
(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	$	3,991	$	49	$	690	$	(17)	$	1,061	$	661	$	6,435
Other costs (benefits), net	28		9		(8)		(1,989)		(1,099)		786		(2,273)
Rightsizing (Non-GAAP)	$	4,019	$	58	$	682	$	(2,006)	$	(38)	$	1,447	$	4,162

During the three months ended March 31, 2020, rightsizing activities included restructuring charges of $7.3 million and other costs of $0.5 million. Restructuring expense was comprised primarily of broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint ~~consolidation,~~consolidations, operational optimization and IT centralization designed to increase operating margin, enhance operations and position the Company for sustained growth and investment. Other costs were comprised primarily of other charges related to the restructuring actions. These rightsizing charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings. We expect to incur additional rightsizing restructuring charges of $6 million during the remainder of 2020. COVID-19 has not resulted in significant restructuring costs. Additional programs, beyond the scope of the announced programs may be implemented during 2020 with related restructuring charges.

We recorded the following rightsizing costs for the three months ended March 31, ~~2020:~~

Three Months Ended March 31, 2020
(dollars in thousands) Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Corporate Total
Restructuring (GAAP) $ 358 $ 1,475 $ 256 $ 3,846 $ 560 $ 846 $ 7,341
Other costs, net 3 18 8 — 144 345 518
Rightsizing (Non-GAAP) $ 361 $ 1,493 $ 264 $ 3,846 $ 704 $ 1,191 $ 7,859

~~During the~~ ~~three months ended March 31, 2019~~, rightsizing activities included restructuring charges of $2.9 million and other costs of $1 million. Restructuring expense was related to two significant rightsizing restructuring programs initiated in 2018, comprised primarily of broad-based selling, general and administrative expense reduction and footprint consolidation initiatives. Other costs were comprised primarily of other charges related to the restructuring actions. These rightsizing charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings. We recorded the following rightsizing costs for the ~~three months ended March 31, 2019~~2020:

Three Months Ended March 31, 2019
(dollars in thousands) Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Corporate Total
Restructuring (GAAP) $ 79 $ 738 $ 291 $ 381 $ 1,412 $ 35 $ 2,936
Other costs, net 1 14 98 33 881 — 1,027
Rightsizing (Non-GAAP) $ 80 $ 752 $ 389 $ 414 $ 2,293 $ 35 $ 3,963

Table of Contents


	Three Months Ended March 31, 2020
(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	$	358	$	1,475	$	256	$	3,846	$	560	$	846	$	7,341
Other costs (benefits), net	3		18		8		—		144		345		518
Rightsizing (Non-GAAP)	$	361	$	1,493	$	264	$	3,846	$	704	$	1,191	$	7,859

Table of Contents

SEGMENT RESULTS OF OPERATIONS

The summary that follows provides a discussion of the results of operations of each of our five reportable operating segments (Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions, and Refrigeration & Food Equipment). Each of these segments is comprised of various product and service offerings that serve multiple markets. See Note 17 — Segment Information in the Condensed Consolidated Financial Statements in Item 1 of this Form 10-Q for a reconciliation of segment revenue and earnings ~~and margin~~ to our consolidated revenue and net ~~earnings and margin.~~earnings. For further information, see "Non-GAAP Disclosures" at the end of this Item 2.

Additionally, we use the following operational metrics in monitoring the performance of the business. We believe the operational metrics are useful to investors and other users of our financial information in assessing the performance of our segments:

•Bookings represent total orders received from customers in the current reporting period. This metric is an important measure of performance and an indicator of revenue order trends.

•Organic bookings represent total orders received from customers in the current reporting period excluding the impact of foreign currency exchange rates and the impact of acquisitions and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.

•Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet been satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

•Book-to-bill is a ratio of the amount of bookings received from customers during a period divided by the amount of revenue recorded during that same period. This metric is a useful indicator of demand.

Engineered Products

Our Engineered Products segment is a provider of a wide range of products, software and services that have broad customer applications across a number of markets, including aftermarket vehicle service, solid waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing.


		Three Months Ended March 31,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		(dollars in thousands)	2021			2020			% Change
Revenue	Revenue	$	408,160		$	418,851		(2.6)	%	Revenue	$	428,127		$	408,160		4.9	%

Segment earnings (EBIT)	Segment earnings (EBIT)	$	69,094		$	67,119		2.9	%	Segment earnings (EBIT)	$	68,779		$	69,094		(0.5)	%
Depreciation and amortization	Depreciation and amortization	10,122			10,359			(2.3)	%	Depreciation and amortization	14,047			10,122			38.8	%
Segment EBITDA	Segment EBITDA	$	79,216		$	77,478		2.2	%	Segment EBITDA	$	82,826		$	79,216		4.6	%

Segment margin	Segment margin	16.9		%	16.0		%			Segment margin	16.1		%	16.9		%
Segment EBITDA margin	Segment EBITDA margin	19.4		%	18.5		%			Segment EBITDA margin	19.3		%	19.4		%

Other measures:	Other measures:									Other measures:
Bookings	Bookings	$	414,972		$	427,697		(3.0)	%	Bookings	$	528,310		$	414,972		27.3	%
Backlog	Backlog	$	453,867		$	451,335		0.6	%	Backlog	$	562,557		$	453,867		23.9	%

Components of revenue decline:
Organic decline								(1.9)	%
Components of revenue growth:										Components of revenue growth:
Organic growth										Organic growth							2.3	%
Acquisitions	Acquisitions							0.1	%	Acquisitions							0.3	%

Foreign currency translation	Foreign currency translation							(0.8)	%	Foreign currency translation							2.3	%
								(2.6)	%								4.9	%

Table of Contents

First Quarter ~~2020~~2021 Compared to the First Quarter ~~2019~~2020

Engineered Products segment revenue for the first quarter of ~~2020 decreased $10.7~~2021 increased $20.0 million, or ~~2.6%~~4.9%, as compared to the first quarter of ~~2019,~~2020, comprised of organic ~~decline~~growth of ~~1.9% and an unfavorable~~2.3%, a favorable impact from foreign currency translation of ~~0.8%, partially offset by~~2.3% and acquisition-related growth of ~~0.1%~~0.3%. Acquisition-related growth was driven by the acquisition of ~~SoftPak. Customer pricing did not have a significant impact on revenue~~So. Cal. Soft-Pak ("Soft-Pak") in the first quarter of 2020. Customer pricing favorably impacted revenue by approximately 0.6% in the first quarter.

~~Table of Contents~~

The organic revenue ~~decline~~growth was ~~primarily driven by the global impact of COVID-19 on our operations, as well as the operations of our customers and suppliers. This impact was particularly~~most notable in our vehicle service, business, whose operations in China and Italy were disrupted by government ordered facility shutdowns and whose customers in the global automotive aftermarket experienced reduced end customer demand due to mobility restrictions and lower demand for automotive maintenance and repairs. Additionally, we have voluntarily suspended production at a U.S. facility serving the automotive original equipment manufacturer ("OEM") market due to the suspension of operations by a majority of their customers. Impacts from COVID-19 were also experienced to a lesser degree in our industrial automation, and ~~fluid dispensing businesses, whose operations in China were most notably impacted by government-required facility shutdowns in the quarter.Additionally, our industrial automation~~aerospace and defense businesses. Our industrial winch and hoist ~~businesses experienced decreases~~business declined in ~~customer demand~~the quarter due to ~~challenging end-market conditions. These headwinds more than offset continued strong performance~~a prolonged recovery in ~~our environmental solutions~~its end-markets, however the trajectory has sequentially improved from the second half of 2020. Our waste handling business also experienced organic revenue decline compared to the prior year quarter, driven by ~~growth in refuse truck shipments~~lower backlog at the beginning of the quarter and ~~continued strong growth in our digital solutions product line.~~

The global COVID-19 pandemic is expected to significantly impact segment results in the second quarter, as facility shutdowns impacting both our facilities and our customers' facilities have accelerated in the U.S. and across Europe, creating near-term operational disruptions and demand headwinds across several of our businesses. However, we believe that once government restrictions related to COVID-19 ease, the demand for our products will continue its long term favorable growth trend and the fundamental long term demand drivers across our end-markets will remain constructive.supply chain constraints delaying shipments.

Engineered Products segment earnings ~~increased $2.0~~decreased $0.3 million, or ~~2.9%~~0.5%, compared to the first quarter of ~~2019.~~ 2020~~This increase~~. The decrease was primarily driven by ~~productivity actions including the benefit~~increased rightsizing costs and material and logistics cost inflation, comprised of ~~rightsizing actions~~increased steel and ~~cost reduction initiatives, and selling, general and administrative expenses cost containment actions.These impacts~~freight costs, which more than offset ~~the negative impact from~~higher earnings due to conversion on ~~lower organic~~increased revenues ~~driven by~~and the ~~impacts of COVID-19.~~benefits from productivity and rightsizing actions. Segment operating margin ~~increased 90~~decreased 80 basis points to ~~16.9%~~16.1% from ~~16.0%~~16.9% as compared to the prior year quarter.

Bookings ~~decreased 3.0%~~increased 27.3% for the segment, ~~including an~~comprised of organic ~~decline~~growth of ~~2.3% and an unfavorable~~24.8%, a favorable impact from foreign currency translation of ~~0.9%~~2.2%, ~~partially offset by~~and acquisition-related growth of ~~0.2%~~0.4%. ~~The~~The organic bookings ~~decline~~growth was ~~primarily driven by the global impact on customer demand of the COVID-19 pandemic, reduced end market demand~~broad-based, most notably in our waste handling, vehicle service, industrial automation and ~~industrial winch and hoist businesses, and order placement timing in our~~ aerospace and defense ~~business.~~ businesses. Segment book-to-bill was ~~1.02.~~1.23. Backlog increased ~~0.6%~~23.9% compared to the prior year comparable quarter.

Table of Contents

Fueling Solutions

Our Fueling Solutions segment is focused on providing components, equipment and software and service solutions enabling safe transport of fuels and other hazardous fluids along the supply chain, as well as the safe and efficient operation of retail fueling and vehicle wash establishments.


		Three Months Ended March 31,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		(dollars in thousands)	2021			2020			% Change
Revenue	Revenue	$	359,982		$	373,050		(3.5)	%	Revenue	$	389,678		$	359,982		8.2	%

Segment earnings	Segment earnings	$	53,498		$	37,230		43.7	%	Segment earnings	$	66,480		$	53,498		24.3	%
Depreciation and amortization	Depreciation and amortization	18,339			17,879			2.6	%	Depreciation and amortization	19,269			18,339			5.1	%
Segment EBITDA	Segment EBITDA	$	71,837		$	55,109		30.4	%	Segment EBITDA	$	85,749		$	71,837		19.4	%

Segment margin	Segment margin	14.9		%	10.0		%			Segment margin	17.1		%	14.9		%
Segment EBITDA margin	Segment EBITDA margin	20.0		%	14.8		%			Segment EBITDA margin	22.0		%	20.0		%

Other measures:	Other measures:									Other measures:
Bookings	Bookings	$	373,070		$	343,083		8.7	%	Bookings	$	422,668		$	373,070		13.3	%
Backlog	Backlog	$	211,518		$	185,847		13.8	%	Backlog	$	238,822		$	211,518		12.9	%

Components of revenue decline:
Organic decline								(2.6)	%
Components of revenue growth:										Components of revenue growth:
Organic growth										Organic growth							3.0	%
Acquisitions	Acquisitions							0.8	%	Acquisitions							2.6	%

Foreign currency translation	Foreign currency translation							(1.7)	%	Foreign currency translation							2.6	%
								(3.5)	%								8.2	%

First Quarter ~~2020~~2021 Compared to the First Quarter ~~2019~~2020

Fueling Solutions segment revenue for the first quarter of ~~2020 decreased $13.1~~2021 increased $29.7 million, or ~~3.5%~~8.2%, as compared to the first quarter of 2020, comprised of an organic ~~decline~~growth of 3.0%, acquisition-related growth of 2.6%, and ~~an unfavorable~~a favorable impact from foreign currency translation of ~~1.7%, partially offset~~2.6%. Acquisition-related growth was driven by ~~acquisition-related growth~~the acquisition of ~~0.8%~~Innovative Control Systems, Inc. (“ICS”). Customer pricing favorably impacted revenue by approximately ~~1.6%~~1.2% in the first ~~quarter of 2020.~~quarter.

~~Order trends~~The organic revenue growth for the Fueling Solutions segment was principally driven by strong demand in North American retail fueling, the European systems & software business, and growth in vehicle wash solutions. Market conditions improved in Europe and remained ~~robust during the quarter~~subdued in ~~the U.S. supported by the demand~~Asia and South America. Demand continued to be strong for Europay, Mastercard, and Visa ("EMV")-compliant ~~equipment. The strength in the U.S. was more than offset by a decline outside~~equipment ahead of the ~~U.S. principally as a result of actions to contain~~anticipated compliance deadline for the ~~spread of COVID-19 implemented by governments across the world, which began to impact our business with the shutdown of manufacturing operations~~new payment technology standard in China in February, accelerated in March with the restrictions implemented in Italy, and have continued to spread, impacting our supply chain and manufacturing operations, as well as those of our customers. Additionally, our vehicle wash facilities in the U.S. were shut down in March due to local government mandates. The organic revenue decline was also impacted by reduced volume in underground equipment in China due to tapering of government-mandated site infrastructure upgrade activity. Additionally, our businesses serving the transportation and vehicle wash markets have seen slowing in order rates and sales due to the impact of lower oil prices on capital budgets within the fuel supply chain markets and COVID-19 related project deferrals, respectively. We expect the operational curtailments and demand deferrals to continue into the second quarter ~~and~~of 2021, however we do expect demand to ~~have a negative impact on segment results.~~taper through 2021 as the market moves past the compliance deadline.

Fueling Solutions segment ~~earnings~~earnings increased ~~$16.3~~$13.0 million, or ~~43.7%~~24.3%, over the prior year comparable quarter. The increase was primarily driven by ~~favorable geographic and product mix,~~conversion on organic revenue growth, pricing initiatives, ~~benefits of~~productivity actions and selling, general and administrative cost reductions, ~~being realized, productivity actions~~favorable geographic and product mix, and a favorable impact from ~~foreign currency translation~~. The cost reduction actions include the elimination of non-essential travel, third party and other expenses, and re-prioritization of all planned investments and hiring plans. These benefits were partially offset by the previously discussed global impact of COVID-19 on volume, increased material costs and inflation costs.acquisitions. Segment margin increased ~~490 basis points over~~to 17.1% from 14.9% in the prior year quarter.

Overall bookings increased ~~8.7%~~13.3% as compared to the prior year comparable quarter, driven by organic growth of ~~9.5% and~~7.3%, acquisition-related growth of ~~1.1%, partially offset by an unfavorable~~3.1% and a favorable impact from foreign currency translation of ~~1.9%~~2.9%. Organic bookings growth was primarily driven by ~~acceleration in~~strong demand ~~for EMV compliant equipment~~ in North ~~America.~~American retail fueling and vehicle wash solutions. Segment book to bill was ~~1.04.~~1.08. Backlog increased ~~13.8%~~12.9% as compared to the prior year comparable quarter ~~on the back of~~primarily driven by strong ~~new bookings.~~first quarter order intake.

Table of Contents

Imaging & Identification

Our Imaging & Identification segment supplies precision marking and coding, product traceability and digital textile printing equipment, as well as related consumables, software and services.


		Three Months Ended March 31,									Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		(dollars in thousands)	2021			2020			% Change
Revenue	Revenue	$	256,765		$	268,354		(4.3)	%	Revenue	$	284,328		$	256,765		10.7	%

Segment earnings	Segment earnings	$	51,482		$	55,955		(8.0)	%	Segment earnings	$	56,992		$	51,482		10.7	%
Depreciation and amortization	Depreciation and amortization	8,769			7,435			17.9	%	Depreciation and amortization	9,593			8,769			9.4	%
Segment EBITDA	Segment EBITDA	$	60,251		$	63,390		(5.0)	%	Segment EBITDA	$	66,585		$	60,251		10.5	%

Segment margin	Segment margin	20.1		%	20.9		%			Segment margin	20.0		%	20.1		%
Segment EBITDA margin	Segment EBITDA margin	23.5		%	23.6		%			Segment EBITDA margin	23.4		%	23.5		%

Other measures:	Other measures:									Other measures:
Bookings	Bookings	$	272,604		$	267,762		1.8	%	Bookings	$	293,614		$	272,604		7.7	%
Backlog	Backlog	$	170,119		$	118,177		44.0	%	Backlog	$	198,556		$	170,119		16.7	%

Components of revenue decline:
Organic decline								(4.3)	%
Components of revenue growth:										Components of revenue growth:
Organic growth										Organic growth							3.7	%
Acquisitions	Acquisitions							2.8	%	Acquisitions							2.4	%

Foreign currency translation	Foreign currency translation							(2.8)	%	Foreign currency translation							4.6	%
								(4.3)	%								10.7	%

First Quarter ~~2020~~2021 Compared to the First Quarter ~~2019~~2020

Imaging & Identification segment revenue for the first quarter of ~~2020 decreased $11.6~~2021 increased $27.6 million, or ~~4.3%~~10.7%,as compared to the first quarter of 2020, comprised of an organic ~~decline~~growth of ~~4.3% and an unfavorable~~3.7%, a favorable impact from foreign currency translation of ~~2.8%~~4.6%, ~~partially offset by~~and acquisition-related growth of ~~2.8%~~2.4%. Acquisition-related growth was driven by the acquisition of ~~Systech.~~Sys-Tech Solutions, Inc. ("Systech") in the first quarter of 2020 and Solaris Laser S.A. ("Solaris") in the third quarter of 2020. Customer pricing favorably impacted revenue by approximately ~~0.4%~~0.9% in the first quarter.

Organic revenue growth was primarily driven by our marking and coding business, which delivered strong growth in new equipment and associated services, as well as serialization software sales. Our digital textile printing business saw organic declines in the first quarter ~~of 2020.~~

~~The organic revenue decline was primarily driven by~~as textile printing activity remained restrained in the global ~~impact of COVID-19 on our operations, as well as the operations of our customers and suppliers. Actions~~retail industry due to ~~contain the spread of COVID-19, implemented by governments across the world, began to impact our business with the shutdown of manufacturing operations~~COVID-19. We expect a resumption in China in February, affecting our marking and coding manufacturing facilities, which returned to fully operational by March. In March, restrictions were implemented in Italy, where our digital printing business headquarters and main manufacturing facilities reside in the country’s northern region. Digital textile printing operations have been largely shut down since mid-March. Restrictions globally have continued to spread, impacting our supply chain, manufacturing operations and customer demand in Asia, Europe, North America and South America. Additionally, the expansion of government mandated shutdowns worldwide have hampered our sales and service functions globally, and has led to a significant temporary reduction in demand for the digital textile printing ~~equipment,~~activity and increased demand for our products as ~~our customers are facing near-term uncertainty about end-demand for textiles, fashion~~effects subside and apparel ~~goods in light of global retail outlet closures and economic uncertainty. Although~~ demand ~~for consumables in marking and coding, particularly inks for food and beverage, cleaning supplies, pharmaceuticals, and medical supplies~~normalizes. We believe we remain ~~robust, we are seeing delays in orders for new and replacement marking and coding capital equipment. This reduction led~~favorably positioned to lower manufacturing utilization at our marking and coding operations in France. Additionally, we saw slowing demand in industrial end-markets for our marking & coding business and travel restrictions have impacted our ability to provide maintenance services.

We expect these demand headwinds and operational interruptions to continue into the second quarter and to negatively impact segment results. However, we believe that once government restrictions related to COVID-19 ease, demand for marking and coding equipment will continue its long term favorable growth trend, supported by constructive secular trends in demand for product traceability, identification, differentiation and brand protection solutions. Additionally, we believe the long term growth outlook for our digital printing products remain robust, as demand for clothing and apparel globally will continue to grow due to population growth and the continuedgain from a longer-term transition from analog to digital printing by our customers, ~~due~~and believe some business model shifts within the industry driven by the COVID-19 pandemic may accelerate our customers’ need to ~~performance and environmental benefits.~~shift from analog to digital printing.

~~Table of Contents~~

Imaging & Identification segment earnings ~~decreased $4.5~~increased $5.5 million, or ~~8.0%~~10.7%, over the prior year comparable quarter. ~~The decrease~~This increase was primarily driven by conversion on increased revenue and the ~~previously discussed impacts associated with widespread actions by governments across the globe to contain the spread of COVID-19, partially offset by significant~~benefits from productivity initiatives and cost containment initiatives undertaken as demand levels began to deteriorate. These initiatives include actions to adjust direct and indirect manufacturing cost to current demand levels, the execution of short-term actions to reduce labor costs, the elimination of non-essential travel, third party and other expenses, the recognition of adjustments to variable compensation to reflect current conditions, the execution of selective structural cost actions aimed at streamlining our business, and a detailed review and re-prioritization of all planned investments and hiring plans. These actions have been taken deliberately and strategically, and allow us to rationalize current spending to levels appropriate given near-term market conditions, while preserving our ability to capitalize on long-term secular growth trends. These actions will continue into the second quarter and remain in place until we see improvements in near-term demand.reduction actions. Segment margin decreased ~~80 basis points over~~to 20.0% from 20.1% in the prior year comparable quarter.

Overall bookings increased ~~1.8%~~7.7% as compared to the prior year comparable quarter, reflecting organic growth of ~~0.3% and acquisition-related growth of 4.1%~~0.1%, ~~partially offset by an unfavorable~~a favorable impact from foreign currency translation of ~~2.6%~~4.0% and acquisition-related growth of 3.6%. Strong orders for consumables in our marking and coding business more than offset reductions in equipment and services bookings in marking and coding and reduced bookings in our digital printing business, driven by the global impacts from COVID-19. Segment book to bill was ~~1.06.~~1.03. Backlog increased ~~44.0%~~16.7% as compared to the prior year quarter driven by the inclusion of backlog from the Systech and Solaris acquisitions, and increased order intake in our marking and coding business.

Table of Contents

Pumps & Process Solutions

Our Pumps & Process Solutions segment manufactures specialty pumps, fluid handling components, plastics and polymer processing equipment, single use pumps, flow meters and connectors, and highly engineered components for rotating and reciprocating machines.


	Three Months Ended March 31,
(dollars in thousands)		2021			2020			% Change
Revenue		$	394,377		$	319,536		23.4	%

Segment earnings		$	123,645		$	66,079		87.1	%
Depreciation and amortization		16,926			18,336			(7.7)	%
Segment EBITDA		$	140,571		$	84,415		66.5	%

Segment margin		31.4		%	20.7		%
Segment EBITDA margin		35.6		%	26.4		%

Other measures:
Bookings		$	551,365		$	369,403		49.3	%
Backlog		$	539,097		$	397,969		35.5	%

Components of revenue growth:
Organic growth								18.4	%
Acquisitions								1.3	%

Foreign currency translation								3.7	%
								23.4	%

First Quarter 2021 Compared to the First Quarter 2020

Pumps & Process Solutions segment revenue for the first quarter of 2021 increased $74.8 million, or 23.4%, as compared to the first quarter of 2020, comprised of organic growth of 18.4%, a favorable impact from foreign currency translation of 3.7%, and acquisition-related growth of 1.3%. Acquisition-related growth was primarily driven by the acquisition of Em-tec GmbH ("Em-tec"). Customer pricing favorably impacted revenue by approximately 1.0% in the first quarter.

The organic revenue growth was principally driven by strong performance in the biopharma and hygienic markets, where we continue to see strong demand for single use pumps and connectors used in biological production processes. We expect this positive trajectory to carry into the next quarter and beyond. Additionally, we saw increased demand for industrial pumps and plastics & polymer processing solutions in the first quarter. These tailwinds were partially offset by reduced year over year revenues in bearings & compression components markets, which are facing prolonged recovery in some of their end-markets and are expected to show improvement in the second half of the year.

Pumps & Process Solutions segment earnings increased $57.6 million, or 87.1%, over the prior year comparable quarter. The increase was primarily driven by strong conversion on organic revenue growth, product mix, pricing initiatives, productivity actions and the benefits from prior restructuring programs. Segment margin increased to 31.4% from 20.7% from the prior year comparable quarter.

Overall bookings increased 49.3% as compared to the prior year comparable quarter, reflecting organic growth of 44.0%, a favorable impact from foreign currency translation of 4.2%, and acquisition-related growth of 1.1%. Organic bookings growth was primarily driven by the significant growth in the biopharma and hygienic pumps and connectors, as well as strong order intake in industrial pumps and plastics & polymer processing solutions. Segment book to bill was 1.40. Backlog increased 35.5% compared to the prior year comparable quarter.

Table of Contents

Refrigeration & Food Equipment

Our Refrigeration & Food Equipment segment is a provider of innovative and energy-efficient equipment and systems that serve the commercial refrigeration, heating and cooling and food equipment markets.


	Three Months Ended March 31,
(dollars in thousands)		2021			2020			% Change
Revenue		$	372,077		$	311,913		19.3	%

Segment earnings(1)		$	38,117		$	23,529		62.0	%
Depreciation and amortization		12,096			11,548			4.7	%
Segment EBITDA(1)		$	50,213		$	35,077		43.2	%

Segment margin(1)		10.2		%	7.5		%
Segment EBITDA margin(1)		13.5		%	11.2		%

Other measures:
Bookings		$	537,326		$	355,157		51.3	%
Backlog		$	677,309		$	356,133		90.2	%

Components of revenue growth:
Organic growth								18.3	%

Dispositions								(1.6)	%
Foreign currency translation								2.6	%
								19.3	%

(1) Segment earnings (EBIT) and Segment EBITDA for the three months ended March 31, 2020 include a $6,551 gain on the sale of AMS Chino.

First Quarter 2021 Compared to the First Quarter 2020

Refrigeration & Food Equipment segment revenue increased $60.2 million, or 19.3%, as compared to the first quarter of 2020, reflecting organic revenue growth of 18.3% and a favorable impact from foreign currency translation of 2.6%, partially offset by a 1.6% impact from the disposition of AMS Chino. Customer pricing favorably impacted revenue by approximately 0.3% in the first quarter.

The organic revenue growth was principally driven by robust growth in several of our key end markets. Retail refrigeration experienced strong growth across all product lines, driven by a broad-based increase in customer store renovation and remodel programs, as well as new product roll-outs and customer wins. Additionally, regulations requiring more environmentally friendly refrigerants drove strong growth for natural refrigerant systems in both Europe and the U.S. Can-shaping equipment revenues more than doubled from prior year, driven by COVID-19 impacts resulting in more at-home beverage consumption as well as continued macro trends for beverage producers to shift from plastic and glass packaging to aluminum containers for environmental reasons. Our heat exchanger business experienced healthy growth as well, fueled by regulation-driven heat pump demand in Europe and strengthening HVAC markets on a global basis. Commercial foodservice equipment revenues declined from prior year, but experienced improving demand throughout the quarter particularly from quick service restaurant chain customers, while institutional customer demand remained subdued. We expect near-term foodservice equipment demand to remain soft, but improve sequentially throughout the year as a successful rollout of the COVID-19 vaccine will facilitate for key school, institutional and event venue customers to re-open.

Refrigeration & Food Equipment segment earnings increased $14.6 million, or 62.0%, as compared to the first quarter of 2020. Segment margin increased to 10.2% from 7.5% in the prior year comparable quarter. The earnings increase was driven by leverage on increased volumes, improved operational efficiencies and benefits from prior restructuring and productivity programs, partially offset by increased material costs, most notably metals, and a prior year gain on the sale of AMS Chino.

Bookings in the first quarter of 2021 increased 51.3% from the prior year comparable quarter, reflecting organic growth of 50.7% and a favorable impact from foreign currency translation of 2.3%, partially offset by a 1.7% impact from the disposition of AMS Chino. The organic bookings growth was principally driven by increased project activity for can-shaping equipment,

Table of Contents

broad-based supermarket remodel programs in retail refrigeration products and strong ~~bookings~~global demand for ~~consumables in marking~~brazed plate heat exchangers. Segment book to bill for the first quarter of 2021 was 1.44. Backlog increased 90.2% over the prior year comparable quarter, reflective of the improving outlook across several key end-markets, most notably can-shaping equipment, retail refrigeration, and ~~coding.~~heat exchangers.

~~Table of Contents~~

~~Pumps & Process Solutions~~

Our Pumps & Process Solutions segment manufactures specialty pumps, fluid handling components, plastics and polymer processing equipment, and highly engineered components for rotating and reciprocating machines.

Three Months Ended March 31,
(dollars in thousands) 2020 2019 % Change
Revenue $ 319,536 $ 330,219 (3.2) %
Segment earnings⁽¹⁾
$ 66,079 $ 14,991 340.8 %
Depreciation and amortization 18,336 17,548 4.5 %
Segment EBITDA ⁽¹⁾
$ 84,415 $ 32,539 159.4 %
Segment margin ⁽¹⁾
20.7 % 4.5 %
Segment EBITDA margin ⁽¹⁾
26.4 % 9.9 %
Other measures:
Bookings $ 369,403 $ 369,801 (0.1) %
Backlog $ 397,969 $ 353,066 12.7 %
Components of revenue decline:
Organic decline (1.1) %
Acquisitions 0.9 %
Dispositions (1.9) %
Foreign currency translation (1.1) %
(3.2) %

⁽¹⁾~~Segment earnings (EBIT) and segment EBITDA for the~~ ~~three months~~ ~~ended 2019 include a $46,946 loss on assets held for sale for Finder.~~

~~First Quarter 2020 Compared to the First Quarter 2019~~

Pumps & Process Solutions segment revenue for the first quarter of 2020 decreased $10.7 million, or 3.2%, comprised of organic decline of 1.1%, an unfavorable impact from foreign currency translation of 1.1% and a 1.9% impact from dispositions, partially offset by acquisition-related growth of 0.9%. Customer pricing favorably impacted revenue by approximately 1.1% in the first quarter of 2020.

~~The organic revenue decline~~ was principally driven by the adverse impact of COVID-19, as well as the slowing demand in the oil & gas end-market, partially offset by growth in the biopharma and hygienic markets (including for products directly used in the fight against the COVID-19 pandemic). As a result of the COVID-19 pandemic, several facilities across the globe were subjected to mandatory government shutdowns beginning in February in China and with further restrictions in India and Mexico in March. These shutdowns disrupted manufacturing and supply chain operations, as well as the operations of some of our customers and suppliers. Additionally, the fall in the price of oil has led to a reduction in demand from customers in the oil & gas end-market for rotating and reciprocating machinery components and aftermarket services. The above factors have led to a temporary reduction in demand, which is likely to continue into the second quarter and may unfavorably impact segment results in the ensuing quarter. Activity in our plastics and polymer processing business remained constructive as it primarily serves large long-term capital projects around the world.

Pumps & Process Solutions segment earnings increased $51.1 million, or 340.8%, over the prior year quarter. Segment earnings in the first quarter of 2019 included a loss on assets held for sale for Finder of $46.9 million. Excluding the loss, segment earnings increased driven by pricing initiatives, productivity actions, restructuring benefits, and s~~elling, general and administrative~~ ~~cost reductions. The aforementioned cost reductions include the elimin~~ation of non-essential travel, third party and other expenses, and re-prioritization of all planned investments and hiring plans. These actions as well as line rate reductions and selected furloughs will continue into the second quarter and remain in place until we see improvements in near-term demand. These benefits were partially offset by the global impact of COVID-19 on volume, increased material and inflation costs, and an unfavorable impact from foreign currency translation. ~~Segment margin increased to 20.7% from 4.5% from the prior year quarter, which included the loss on Finder.~~

3430

Table of ~~Contents~~

Overall bookings were flat as compared to the prior year quarter, reflecting an unfavorable impact from foreign currency translation of 1.1% and a 2.0% impact from a disposition, partially offset by organic growth of 2.2% and acquisition-related growth of 0.8%. Segment book to bill was 1.16. Backlog increased 12.7% as compared to the prior year quarter driven by strong new order rates in our biopharma and plastics and polymer equipment businesses.

~~Table of Contents~~

~~Refrigeration & Food Equipment~~

Three Months Ended March 31,
(dollars in thousands) 2020 2019 % Change
Revenue $ 311,913 $ 334,643 (6.8) %
Segment earnings⁽¹⁾
$ 23,529 $ 24,807 (5.2) %
Depreciation and amortization 11,548 13,011 (11.2) %
Segment EBITDA⁽¹⁾
$ 35,077 $ 37,818 (7.2) %
Segment margin⁽¹⁾
7.5 % 7.4 %
Segment EBITDA margin⁽¹⁾
11.2 % 11.3 %
Other measures:
Bookings $ 355,157 $ 376,998 (5.8) %
Backlog $ 356,133 $ 311,632 14.3 %
Components of revenue decline:
Organic decline (4.3) %
Dispositions (1.8) %
Foreign currency translation (0.7) %
(6.8) %

⁽¹⁾ ~~Segment earnings (EBIT) and Segment EBITDA for the three months ended March 31, 2020, includes a $6,551 gain on the sale of AMS Chino.~~

~~First Quarter 2020 Compared to the First Quarter 2019~~

Refrigeration & Food Equipment segment revenue decreased $22.7 million, or 6.8%, as compared to the first quarter of 2019, reflecting an organic revenue decline of 4.3%, a 1.8% impact from the disposition of AMS Chino, and an unfavorable impact from foreign currency translation of 0.7%. Customer pricing did not have a significant impact on revenue in the first quarter of 2020.

The organic revenue decline was principally driven by the impact of COVID-19. Government actions to contain the spread of the virus, such as mandated plant shutdowns and social distancing measures, resulted in deferred customer orders and operational curtailments and inefficiencies across the segment. Our operations in the segment were shut down in China and Malaysia for a period of time during the quarter and we experienced intermittent interruptions in our North American facilities due to various operational factors related to the pandemic. Many key customers in our retail refrigeration business delayed previously planned projects related to new store construction and existing store remodels and deferred their near-term capital investment plans in favor of focusing on maximizing store uptime and meeting the needs of surging customer traffic as they experienced surging demand during the quarter as a result of social distancing and restaurant closure mandates. These remodel deferrals will have a substantial impact on revenue in the near-term, however we believe demand for refrigeration and foodservice equipment will normalize once government restrictions related to COVID-19 ease, as the current wear and tear on existing assets will drive the need for increased equipment replacement programs. Demand from our U.S. commercial foodservice customers has slowed significantly during the quarter as restaurants were closed in many localities and customer traffic declined significantly, leading restaurants to delay their capital expenditures. Additionally, we experienced slower sales in our heat exchanger business in Asia and Europe.

~~Refrigeration & Food Equipment segment earning~~s decreased $1.3 million, or 5.2%, as compared to the first quarter of 2019. Segment margin increased to 7.5% from 7.4% in the prior year quarter. The earnings decline was driven by reduced volumes and operational inefficiencies associated with impacts from COVID-19, partially offset by the gain on sale from the disposition ofAMS Chino and other broad based cost reduction activities, including adjusting direct and indirect manufacturing costs to current demand levels, reduction of discretionary expenses, adjustments to variable compensation to match current outlook, and

~~Table of Contents~~

~~deferral of planned selling, general, and administrative investments.These actions as well as planned furloughs will continue in the second quarter and remain in place until we see improvements in near-term revenue demand.~~

Bookings in the first quarter of 2020 decreased 5.8% from the prior year quarter, reflecting an organic decline of 4.2%, a 1.1% impact from the disposition of AMS Chino, and an unfavorable impact from foreign currency translation of 0.5%. Organic decline was driven primarily by COVID-19 demand reductions in our foodservice equipment and heat exchanger businesses as well as timing of projects for aluminum can shaping equipment, which operates with a strong long-term backlog. Retail refrigeration’s organic bookings grew 1.2%, as key supermarket chain order trends remained healthy, albeit with request for delivery date timing beyond normal lead times. Segment book to bill for the first quarter of 2020 was 1.14. Backlog increased 14.3% over the prior year quarter, driven mainly by increases in our heat exchanger and aluminum can shaping equipment businesses.

~~Table of~~ Contents

FINANCIAL CONDITION

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. Significant factors affecting liquidity are: cash flows generated from operating activities, capital expenditures, acquisitions, dispositions, dividends, repurchases of outstanding shares, adequacy of available commercial paper and bank lines of credit, and the ability to attract long-term capital with satisfactory terms. We generate substantial cash from the operations of our businesses and remain in a strong financial position, with sufficient liquidity available ~~to support continued operations, reinvest~~for reinvestment in existing businesses and ~~fund~~ strategic ~~acquisitions, while maintaining our prudent capital structure on a short and long-term basis.~~acquisitions.

Cash Flow Summary

The following table is derived from our Condensed Consolidated Statements of Cash Flows:


		Three Months Ended March 31,							Three Months Ended March 31,
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2020		2019		Cash Flows (dollars in thousands)	2021		2020
Net Cash Flows Provided By (Used In):	Net Cash Flows Provided By (Used In):					Net Cash Flows Provided By (Used In):
Operating activities	Operating activities	$	75,863	$	24,524	Operating activities	$	177,184	$	75,863
Investing activities	Investing activities	(230,511)		(217,690)		Investing activities	(29,572)		(230,511)
Financing activities	Financing activities	280,954		36,067		Financing activities	(124,239)		280,954

Operating Activities

Cash provided by operating activities for the three months ended March 31, ~~2020~~2021 increased approximately ~~$51.3~~$101.3 million compared to the comparable period in ~~2019.~~2020. This increase was primarily driven by higher net earnings, excluding the impact of depreciation, amortization ~~loss on assets held for sale~~ and gain on sale of a ~~business. The increase was also attributable~~business as well as lower compensation payouts in 2021 compared to ~~improvements in working capital of $25.4 million relative to the prior year.~~2020.

We also continue to monitor government economic stabilization efforts and expect to participate in certain legislative provisions to enhance our liquidity. We deferred approximately $15 million of non-US tax payments from the first quarter to predominantly the second quarter of 2020. We expect to defer approximately $50 million of U.S. and state income tax payments from the second to the third quarter of 2020. Additionally under the U.S. CARES Act, we expect to defer the payment of approximately $5 million of payroll taxes each quarter for the remainder of 2020 to be paid equally in the fourth quarters of 2021 and 2022.

Adjusted Working Capital: We believe adjusted working capital (a non-GAAP measure calculated as accounts receivable, plus inventory, less accounts payable) provides a meaningful measure of our operational results by showing changes caused solely by revenue. The following table provides a reconciliation of adjusted working capital to the most directly comparable GAAP measure:


Adjusted Working Capital (dollars in thousands)	Adjusted Working Capital (dollars in thousands)	March 31, 2020		December 31, 2019		Adjusted Working Capital (dollars in thousands)	March 31, 2021		December 31, 2020
Accounts receivable	Accounts receivable	$	1,222,154	$	1,217,190	Accounts receivable	$	1,240,516	$	1,137,223
Inventories	Inventories	852,075		806,141		Inventories	900,607		835,804
Less: Accounts payable	Less: Accounts payable	947,006		983,293		Less: Accounts payable	911,074		853,942
Adjusted working capital	Adjusted working capital	$	1,127,223	$	1,040,038	Adjusted working capital	$	1,230,049	$	1,119,085

Adjusted working capital increased from December 31, ~~2019~~2020 by ~~$87.2~~$111.0 million, or ~~8.4%~~9.9%, to ~~$1.1~~$1.2 billion at March 31, ~~2020,~~2021, which reflected an increase of ~~$5.0~~$103.3 million in accounts ~~receivable, an increase of $45.9~~receivable and $64.8 million in inventory, ~~and a decrease~~partially offset by an increase in accounts payable of ~~$36.3~~$57.1 million. These amounts include the effects of acquisitions, dispositions and foreign currency translation. Accounts receivable increased compared to the prior year as a result of higher revenue. Inventories increased to meet higher backlog which also drove an increase in accounts payable.

We facilitate the opportunity for suppliers to participate in voluntary supply chain financing (“SCF”) programs with participating financial institutions. Participating suppliers have the ability to sell receivables due from us to SCF financial institutions at the discretion of both the suppliers and the SCF financial institutions, at no economic impact to the Company. The Company and our suppliers agree on commercial terms, including payment terms, for the goods and services we procure regardless of whether the supplier participates in SCF. For participating suppliers, our responsibility is limited to making all payments to the SCF financial institutions on the terms originally negotiated with the supplier, irrespective of whether the supplier elects to sell receivables to the SCF financial institution. The SCF financial institution pays the supplier on the invoice due date for any invoices that were not previously sold by the supplier to the SCF financial institution.  Thus, suppliers using SCF have additional potential flexibility in managing their liquidity by accelerating, at their option and cost, collection of receivables due from Dover.

Outstanding payments related to SCF programs are recorded within accounts payable in our consolidated balance sheets. As of March 31, 2021 and December 31, 2020, amounts due to financial institutions for suppliers using SCF were approximately $160 million and $139 million, respectively. SCF related payments are classified as a reduction to cash flows

Table of Contents

from operations. During the three months ended March 31, 2021 and 2020 amounts paid to SCF financial institutions were  approximately $108 million and $150 million, respectively.

Investing Activities

Cash provided ~~by or used in~~from investing activities ~~generally results~~is derived from cash outflows for capital expenditures and acquisitions, offset by proceeds from sales of businesses and property, plant and equipment. For the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, we used cash in investing activities of ~~$230.5~~$29.6 million and ~~$217.7~~$230.5 million, respectively, driven mainly by the following factors:

•Acquisitions: There were no acquisitions during the three months ended March 31, 2021. During the three months ended March 31, 2020, we acquired Systech and Soft-Pak within the Imaging & Identification and Engineered Products segments, respectively, for $208.4 million, net of cash acquired. ~~During the three months ended March 31, 2019, we acquired Belanger, Inc., within the Fueling Solutions segment for $175.1 million, net of cash acquired.~~

•Capital spending: Our capital expenditures ~~increased $3.1~~decreased $8.9 million ~~on major projects in progress~~ during the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019.~~2020. The decrease is primarily due to the completion of large projects in the prior year. We ~~have initiated a plan~~expect full year 2021 capital expenditures to ~~significantly reduce our capital spend for the year, without deferring strategic ongoing initiatives~~be approximately $175-$200 million.

•Proceeds from sale of businesses: ~~For~~There were no proceeds from the sale of businesses during the three months ended March 31, 2021. For the three months ended March 31, 2020, we received proceeds of $16.9 million from the sale of AMS Chino within the Refrigeration & Food Equipment segment. ~~For the three months ended March 31, 2019, we received partial proceeds of $2.2 million from the sale of Finder in the second quarter of 2019.~~

~~We have significantly reduced our capital spending plan for the year as a result of COVID-19, without deferring strategic ongoing initiatives.~~ We anticipate that capital expenditures and any acquisitions we make through the remainder of ~~2020~~2021 will be funded from available cash and internally generated funds and through the issuance of commercial paper, use of lines of credit or public or private debt ~~or equity~~ markets, as necessary.

Financing Activities

Our cash flow from financing activities generally relates to the use of cash for ~~the repurchase~~purchases of our common stock and ~~payments~~payment of dividends, offset by net borrowing activity. For the three months ended March 31, 2021 and 2020, we used cash totaling $124.2 million and ~~2019,~~generated cash ~~provided by~~totaling $281.0 million, respectively, for financing activities, ~~was $281.0 million and $36.1 million, respectively,~~ with the activity primarily attributable to the following:

•Repurchase of ~~comm~~oncommon stock: During the three months ended March 31, 2021, we used $21.6 million to repurchase 182,951 shares. During the three months ended March 31, 2020, we used $52.9 million to repurchase 548,659 shares. ~~There were no share repurchases during the three months ended March 31, 2019.~~ ~~We have suspended repurchases as a result of business uncertainty related to COVID-19.~~

•Long-term debt, commercial paper and notes payable: During the three months ended March 31, 2021, we did not borrow or have proceeds from long-term debt, commercial paper and notes payable. During the three months ended March 31, 2020, we borrowed $500 million ~~due May 19, 2020~~ under the ~~$1.0~~$1.0 billion five-year unsecured revolving credit facility ("Credit Agreement"). Proceeds from the borrowing were used to repay all of the Company's outstanding commercial paper and for general corporate purposes. ~~During the three months ended March 31, 2019, we received net proceeds from commercial paper and notes payable of $125.9 million primarily to fund the acquisition of Belanger.~~

•Dividend payments: Dividends paid to shareholders during the three months ended March 31, ~~2020~~2021 totaled ~~$70.9~~$71.3 million as compared to ~~$69.8~~$70.9 million during the same period in ~~2019.~~2020. Our dividends paid per common share increased ~~2.1%~~1.0% to ~~$0.49~~$0.495 during the three months ended March 31, ~~2020~~2021 compared to ~~$0.48~~$0.49 during the same period in ~~2019.~~2020. The number of common shares outstanding decreased during the three months ended March 31, ~~2020~~2021 compared to the same period in ~~2019~~2020 as a result of share repurchases completed in ~~2020~~2021 and the ~~second half~~fourth quarter of ~~2019.~~2020.

•Payments to settle employee tax obligations: Payments to settle tax obligations from the exercise of ~~share based~~share-based awards ~~declined $9.6~~increased $20.4 million compared to the prior year period. The ~~decrease~~increase is primarily due to the ~~decrease~~increase in the number of shares exercised ~~partially offset by~~and an increase in the average stock price compared to the prior year period.

3932

Table of Contents

Liquidity and Capital Resources

Free Cash Flow

In addition to measuring our cash flow generation and usage based upon the operating, investing and financing classifications included in the Condensed Consolidated Statements of Cash Flows, we also measure free cash flow (a non-GAAP measure) which represents net cash provided by operating activities minus capital expenditures. We believe that free cash flow is an important measure of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

The following table reconciles our free cash flow to cash flow provided by operating activities:


		Three Months Ended March 31,										Three Months Ended March 31,
Free Cash Flow (dollars in thousands)	Free Cash Flow (dollars in thousands)	2020			2019			Free Cash Flow (dollars in thousands)	2021			2020
Cash flow provided by operating activities	Cash flow provided by operating activities	$	75,863		$	24,524		Cash flow provided by operating activities	$	177,184		$	75,863
Less: Capital expenditures	Less: Capital expenditures	(40,172)			(37,122)			Less: Capital expenditures	(31,260)			(40,172)

Free cash flow	Free cash flow	$	35,691		$	(12,598)		Free cash flow	$	145,924		$	35,691

Free cash flow as a percentage of revenue	Free cash flow as a percentage of revenue	2.2		%	(0.7)		%	Free cash flow as a percentage of revenue	7.8		%	2.2		%

Free cash flow as a percentage of net earnings	Free cash flow as a percentage of net earnings	20.2		%	(11.9)		%	Free cash flow as a percentage of net earnings	62.7		%	20.2		%

For the three months ended March 31, ~~2020,~~2021, we generated free cash flow of ~~$35.7~~$145.9 million, representing ~~2.2%~~7.8% of revenue and ~~20.2%~~62.7% of net earnings. Free cash flow for the three months ended March 31, ~~2020~~2021 increased ~~$48.3~~$110.2 million compared to the prior year period, ~~primarily~~ due to higher operating cash flow ~~provided by operations,~~primarily as a result of higher earnings and lower compensation payments, as previously noted, ~~partially offset by higher~~and lower capital expenditures.

We have maintained positive free cash flow in the first quarter by proactively managing our working capital. We will continue this focus in the second quarter and beyond and also initiated a plan to significantly reduce our capital spend for the year, without deferring strategic ongoing initiatives. We are reducing discretionary spend and other costs to align with current demand levels in order to support strong free cash flow generation. We also continue to monitor government economic stabilization efforts and expect to participate in certain legislative provisions to enhance our liquidity. We deferred approximately $15 million of non-US tax payments from the first quarter to predominantly the second quarter of 2020. We expect to defer approximately $50 million of U.S. and state income tax payments from the second to the third quarter of 2020. Additionally under the U.S. CARES Act, we expect to defer the payment of approximately $5 million of payroll taxes each quarter for the remainder of 2020 to be paid equally in the fourth quarters of 2021 and 2022.

Capitalization

We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common ~~stock.~~stock. As of March 31, ~~2020,~~2021, we maintained a $1 billion Credit Agreement with a syndicate of banks with an expiration date of October 4, 2024. The Credit Agreement is used as liquidity back-up for our commercial paper program.

Beginning in early-to-mid-March 2020, the commercial paper market began to experience very high levels of volatility as a result of COVID-19 related uncertainties. Volatility was most pronounced for "Tier-2" issuers, such as Dover, and impacted both market access and pricing. As a result, on March 16, 2020, the Company borrowed $500 million ~~due May 19, 2020~~ under the Credit Agreement. Proceeds from the borrowing were used to repay all of the Company's outstanding commercial paper and for general corporate purposes. We ~~plan to continue to use~~subsequently repaid the $500 million in the second quarter of 2020 using proceeds from commercial paper ~~borrowings to the extent available and are exploring other short-term financing alternatives available to investment grade issuers depending on conditions~~as volatility in the commercial paper ~~market.~~ market stabilized and we resumed borrowing commercial paper.

Under the Credit Agreement, we are required to pay a facility fee and to maintain an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1.0. We were in compliance with this covenant and our other long-term debt covenants at March 31, ~~2020~~2021 and had a coverage ratio of ~~11.2~~12.1 to 1. We are not aware of any potential impairment to our liquidity and expect to remain in compliance with all of our debt covenants. Additionally, our earliest long-term debt maturity is in 2025.

We also have a current shelf registration statement filed with the Securities and Exchange Commission that allows for the issuance of additional debt securities that may be utilized in one or more offerings on terms to be determined at the time of the offering. Net proceeds of any offering would be used for general corporate purposes, including repayment of existing indebtedness, capital expenditures and acquisitions.

~~Table of Contents~~

At March 31, ~~2020,~~2021, our cash and cash equivalents totaled ~~$508.9~~$536.5 million, of which ~~$215.8~~$379.6 million was held outside the United States. At December 31, ~~2019,~~2020, our cash and cash equivalents totaled ~~$397.3~~$513.1 million, of which ~~$273.1~~$345.9 million was held outside the United States. Cash and cash equivalents are invested in highly liquid investment-grade money market instruments and bank deposits with maturities of three months or less. We invest any cash in excess of near-term requirements in money market instruments or short-term investments, which consist of investment grade time deposits with original maturity dates at the time of purchase of no greater than three months.

Table of Contents

We utilize the net debt to net capitalization calculation (a non-GAAP measure) to assess our overall financial leverage and capacity and believe the calculation is useful to investors for the same reason. Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders' equity. The following table provides a reconciliation of net debt to net capitalization to the most directly comparable GAAP measures:


Net Debt to Net Capitalization Ratio (dollars in thousands)	Net Debt to Net Capitalization Ratio (dollars in thousands)	March 31, 2020			December 31, 2019			Net Debt to Net Capitalization Ratio (dollars in thousands)	March 31, 2021			December 31, 2020
Short term borrowings		$	500,000		$	—
Commercial paper		—			84,700
Notes payables		500,000			84,700

Long-term debt	Long-term debt	2,963,018			2,985,716			Long-term debt	3,063,374			3,108,829
Total debt	Total debt	3,463,018			3,070,416			Total debt	3,063,374			3,108,829
Less: Cash and cash equivalents	Less: Cash and cash equivalents	(508,907)			(397,253)			Less: Cash and cash equivalents	(536,512)			(513,075)
Net debt	Net debt	2,954,111			2,673,163			Net debt	2,526,862			2,595,754
Add: Stockholders' equity	Add: Stockholders' equity	2,980,681			3,032,660			Add: Stockholders' equity	3,499,144			3,385,773
Net capitalization	Net capitalization	$	5,934,792		$	5,705,823		Net capitalization	$	6,026,006		$	5,981,527
Net debt to net capitalization	Net debt to net capitalization	49.8		%	46.8		%	Net debt to net capitalization	41.9		%	43.4		%

Our net debt to net capitalization ratio ~~increased~~decreased to ~~49.8%~~41.9% at March 31, ~~2020~~2021 compared to ~~46.8%~~43.4% at December 31, ~~2019.~~2020. Net debt ~~increased $280.9~~decreased $68.9 million during the period primarily due to ~~an increase~~a decrease in ~~short term borrowings~~long-term debt as a result of ~~the Company borrowing $500 million under the Credit Agreement partially offset by a decrease in commercial paper~~foreign currency translation on Euro denominated notes and an increase in cash and cash equivalents. Stockholders' equity ~~decreased $52.0~~increased $113.4 million primarily as a result of ~~foreign currency translation adjustments, dividends paid and share repurchases,~~earnings during the period, partially offset by ~~earnings during the period.~~dividends paid, exercises of share-based awards and share repurchases.

Operating cash flow, existing capacity of our Credit Agreement and access to capital markets are expected to satisfy our various cash flow requirements, including acquisitions, capital expenditures and share repurchases.

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements and related public financial information are based on the application of GAAP which requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our public disclosures, including information regarding contingencies, risk and our financial condition. We believe our use of estimates and underlying accounting assumptions conform to GAAP and isare consistently applied. We review valuations based on estimates for reasonableness on a consistent basis.

Recent Accounting Standards

See Part 1, Notes to Condensed Consolidated Financial Statements, Note 20 — Recent Accounting Pronouncements. The adoption of recent accounting standards as included in Note 20 — Recent Accounting Pronouncements in the Condensed Consolidated Financial Statements has not had, and is not expected to have, a significant impact on our revenue, earnings or liquidity.

Special Notes Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, especially "Management’s Discussion and Analysis of Financial Condition and Results of Operations," contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this document other than statements of historical fact are statements that are, or could be deemed, “forward-looking” statements. Some of these statements may be indicated by words such as “may”, “anticipate”, “expect”, believe”,

~~Table of Contents~~

~~“intend”~~ “intend”, “guidance”, “estimates”, “suggest”, “will”, “plan”, “should”, “would”, “could”, “forecast”, "headwind", "tailwind" and other words and terms that use the future tense or have a similar meaning. Forward-looking statements are based on current expectations and are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19 or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, changes in law, including the effect of U.S. tax reform and developments with respect to trade policy and tariffs, our ability to identify and complete acquisitions and integrate and realize synergies from newly acquired businesses, the impact of interest rate and currency exchange rate fluctuations, capital allocation

Table of Contents

plans and changes in those plans, including with respect to dividends, share repurchases, investments in research and development, capital expenditures and acquisitions, our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions, changes in material costs or the supply of input materials, the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy, our ability to capture and protect intellectual property rights, and various other factors that are described in our periodic reports filed with or furnished to the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

The Company may, from time to time, post financial or other information on its website, www.dovercorporation.com. The website is for informational purposes only and is not intended for use as a hyperlink. The Company is not incorporating any material on its website into this report.

Non-GAAP Disclosures

In an effort to provide investors with additional information regarding our results as determined by GAAP, we also disclose non-GAAP information which we believe provides useful information to investors. Segment EBITDA, segment EBITDA margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, ~~from continuing operations,~~ net debt, net capitalization, net debt to net capitalization ratio, adjusted working capital, organic revenue growth and rightsizing costs are not financial measures under GAAP and should not be considered as a substitute for earnings, cash flows from operating activities, debt or equity, working capital, revenue or restructuring costs as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.

We believe that segment EBITDA and segment EBITDA margin are useful to investors and other users of our financial information in evaluating ongoing operating profitability as they exclude the depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating operating performance in relation to our competitors. Segment EBITDA is calculated by adding back depreciation and amortization expense to segment earnings, which is the most directly comparable GAAP measure. We do not present segment net income because corporate expenses, interest and taxes are not allocated at a segment level. Segment EBITDA margin is calculated as segment EBITDA divided by segment revenue.

We believe the net debt to net capitalization ratio and free cash flow are important measures of liquidity. Net debt to net capitalization is helpful in evaluating our capital structure and the amount of leverage we employ. Free cash flow and free cash flow ratios provide both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase our common stock. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings ~~from continuing operations~~ equals free cash flow divided by ~~earnings from continuing operations.~~net earnings. We believe that reporting adjusted working capital, which is calculated as accounts receivable, plus inventory, less accounts payable, provides a meaningful measure of our operational results by showing the changes caused solely by revenue. We believe that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and divestitures, provides a useful comparison of our revenue performance and trends between periods. We believe that reporting rightsizing costs, which include restructuring and other charges, is important as it enables management and investors to better understand the financial impact of our broad-based cost reduction and operational improvement initiatives.

Reconciliations of non-GAAP measures can be found above in this Item 2, Management's Discussion & Analysis.

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in our exposure to market risk during the three months ended March 31, ~~2020.~~2021. For a discussion of our exposure to market risk, refer to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," contained in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

Item 4. Controls and Procedures

At the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, ~~2020.~~2021.

Table of Contents

During the first quarter of ~~2020,~~2021, there were no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Notes to Condensed Consolidated Financial Statements, Note 14 — Commitments and Contingent Liabilities.

Item 1A. Risk Factors

The risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “Form 10-K”) should be considered together with information included in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and should not be considered the only risks to which we are exposed. In general, we are subject to the same general risks and uncertainties that impact many other industrial companies such as general economic, industry and/or market conditions and growth rates; the impact of natural disasters and their effect on global markets; and changes in laws or accounting rules. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity and financial condition. We are providing the following information regarding changes that have occurred to the previously disclosed risk factors in our Form 10-K. Except for such additional information, we believe thereThere have been no material changes from the risk factors previously disclosed in our Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020.

~~The COVID-19 pandemic has adversely impacted, and poses risks to, our business, the nature and extent of which are highly uncertain and unpredictable.~~

We are monitoring the global outbreak of the COVID-19 and taking steps to mitigate the risks to us posed by its spread, including by working with our customers, employees, suppliers and other stakeholders. The pandemic is adversely affecting, and is expected to continue to adversely affect, certain elements of our business (including our supply chain, distribution systems, production levels and research and development activities) and our operations have been negatively impacted due to significant portions of our workforce are unable to work effectively due to quarantines, government orders and guidance, facility closures, illness, travel restrictions, implementation of precautionary measures and other restrictions. We also have experienced and expect to continue to experience unpredictable volatility in demand in several of our end-markets. If the pandemic continues and conditions worsen, we expect to experience additional adverse impacts on our operational and commercial activities, costs, customer orders and purchases and our collections of accounts receivable, which may be material, and the extent of these adverse impacts on future operational and commercial activities, costs, customer orders and purchases and our collections remains uncertain even if conditions begin to improve. Furthermore, the pandemic has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. For example, in recent weeks, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which increases the cost of capital and adversely impacts access to capital including the commercial paper markets. Due to the speed with which the situation is developing, the global breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration, ultimate impact and the timing of recovery. Therefore, the pandemic could lead to an extended disruption of economic activity and the impact on our consolidated results of operations, financial position and cash flows could be material.

~~Table of Contents~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a.Not applicable.

b.Not applicable.

c.The table below presents shares of Dover stock that we acquired during the quarter.


Period	Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs⁽¹⁾	Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs (1)
January 1 to January 31	January 1 to January 31	—	$	—	—	8,360,044	January 1 to January 31	39,400	$	119.43	39,400	19,960,600
February 1 to February 29		—	—		—	8,360,044
February 1 to February 28							February 1 to February 28	143,551	117.95		143,551	19,817,049
March 1 to March 31	March 1 to March 31	548,659	96.45		548,659	7,811,385	March 1 to March 31	—	—		—	19,817,049
For the Third Quarter		548,659	$	96.45	548,659	7,811,385
For the First Quarter							For the First Quarter	182,951	$	118.27	182,951	19,817,049

⁽¹⁾ In ~~February 2018,~~November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares ~~of its common stock~~beginning on January 1, 2021 through December 31, ~~2020.~~2023. The Company repurchased ~~548,659~~182,951 shares under the ~~February 2018~~November 2020 authorization during the three months ended March 31, ~~2020.~~2021. As of March 31, ~~2020,~~2021, the number of shares still available for repurchase under the ~~February 2018~~November 2020 share repurchase authorization was ~~7,811,385.~~19,817,049.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

4436

Table of Contents

Item 6. Exhibits


~~3.1~~			Amended and Restated Bylaws of the Company, effective as of February 14, 2020, filed as Exhibit 3.1 to the Company's Current Report on form 8-K filed on February 19, 2020 (SEC file No. 001-04018), are incorporated by reference.

10.1			Amendment Number 3, adopted and effective as of February 12, 2021, to the Dover Corporation 2012 Equity and Cash Incentive Plan. *

10.2			Form of ~~2020~~2021 award grant letter for SSAR grants made under the Dover Corporation 2012 Equity and Cash Incentive Plan.*

~~10.2~~10.3			Form of ~~2020~~2021 award grant letter for cash performance awards made under the Dover Corporation 2012 Equity and Cash Incentive Plan.*

~~10.3~~10.4			Form of ~~2020~~2021 award grant letter for performance share awards made under the Dover Corporation 2012 Equity and Cash Incentive Plan.*


~~10.4~~10.5			Form of ~~2020~~2021 award grant letter for RSU awards made under the Dover Corporation 2012 Equity and Cash Incentive Plan.*

10.6			Amendment to Employment Agreement of Richard J. Tobin, dated as of February 19, 2021, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 19, 2021, (SEC File No. 001-04018) is incorporated by reference. *

31.1			Certificate pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, signed and dated by Brad M. Cerepak.

31.2			Certificate pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, signed and dated by Richard J. Tobin.

32			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Richard J. Tobin and Brad M. Cerepak.

101			The following materials from Dover Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2020~~2021 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Earnings, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements.

104			Cover Page formatted in Inline XBRL and contained in Exhibit 101.
			*Executive compensation plan or arrangement.

* Executive compensation plan or arrangement

4537

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.


		DOVER CORPORATION

Date:	April ~~21, 2020~~20, 2021	/s/ Brad M. Cerepak
		Brad M. Cerepak
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

Date:	April ~~21, 2020~~20, 2021	/s/ Ryan W. Paulson
		Ryan W. Paulson
		Vice President, Controller
		(Principal Accounting Officer)

4638


	Amount allocated		Useful life (in years)
Goodwill - tax deductible	$	33,125	na
Goodwill - non deductible	92,256		na
Customer intangibles	74,100		12

Trademarks	5,100		15
Other intangibles	9,700		6 - 9
	$	214,281


	March 31, 2020		December 31, 2019
Short-term
Short-term borrowings	$	500,000	$	—
Commercial paper	—		84,700
Notes payable	$	500,000	$	84,700


			Carrying amount ⁽¹⁾
	Principal		March 31, 2020		December 31, 2019
Long-term
3.150% 10-year notes due November 15, 2025	$	400,000	$	396,210	$	396,042
1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	645,487		658,089
0.750% 8-year notes due November 4, 2027 (euro denominated)	€	500,000	537,463		548,008
6.65% 30-year debentures due June 1, 2028	$	200,000	199,180		199,155
2.950% 10-year notes due November 4, 2029	$	300,000	296,366		296,270
5.375% 30-year debentures due October 15, 2035	$	300,000	296,122		296,060
6.60% 30-year notes due March 15, 2038	$	250,000	247,968		247,939
5.375% 30-year notes due March 1, 2041	$	350,000	344,222		344,153



Total long-term debt			$	2,963,018	$	2,985,716


	Three Months Ended										Three Months Ended
	March 31, 2020										March 31, 2019
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	$	(88,415)	$	(5,139)	$	(93,554)	$	49,786	$	(747)	$	49,039
Pension and other post-retirement benefit plans	2,523		(568)		1,955		952		(205)		747
Changes in fair value of cash flow hedges	(5,074)		1,121		(3,953)		2,993		(629)		2,364

Total other comprehensive (loss) earnings	$	(90,966)	$	(4,586)	$	(95,552)	$	53,731	$	(1,581)	$	52,150


	Three Months Ended March 31, 2019
(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	$	79	$	738	$	291	$	381	$	1,412	$	35	$	2,936
Other costs, net	1		14		98		33		881		—		1,027
Rightsizing (Non-GAAP)	$	80	$	752	$	389	$	414	$	2,293	$	35	$	3,963