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 ~~June~~September 30, 2020

☐ 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 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 by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the Registrant’s common stock as of ~~July 15,~~October 13, 2020 was ~~143,970,164.~~144,103,299.

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 and ~~and six~~ ~~months~~nine months ended ~~June~~September 30,, 2020 and 2019	1
	Condensed Consolidated Statements of Comprehensive Earnings for the three and ~~and six~~nine months ended ~~June~~Se ptember 30,, 2020 and 2019	2
	Condensed Consolidated Balance Sheets at ~~June~~September 30,, 2020 and December 31, 2019	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three and ~~and six~~ nine months ended ~~June~~September 30,, 2020 and 2019	54
	Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
SIGNATURES			49

Table of Contents

Item 1. Financial Statements

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Revenue	Revenue	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	Revenue	$	1,748,256	$	1,825,345	$	4,903,370	$	5,360,808
Cost of goods and services	Cost of goods and services	947,577		1,138,113		1,991,273		2,239,328		Cost of goods and services	1,089,527		1,151,857		3,080,800		3,391,185
Gross profit	Gross profit	551,598		672,593		1,163,841		1,296,135		Gross profit	658,729		673,488		1,822,570		1,969,623
Selling, general and administrative expenses	Selling, general and administrative expenses	366,740		396,634		753,681		805,100		Selling, general and administrative expenses	381,831		390,775		1,135,512		1,195,875
Loss on assets held for sale	Loss on assets held for sale	—		—		—		46,946		Loss on assets held for sale	0		0		0		46,946
Operating earnings	Operating earnings	184,858		275,959		410,160		444,089		Operating earnings	276,898		282,713		687,058		726,802
Interest expense	Interest expense	28,711		31,754		55,979		63,562		Interest expense	27,724		31,410		83,703		94,972
Interest income	Interest income	(728)		(945)		(1,911)		(1,835)		Interest income	(960)		(1,263)		(2,871)		(3,098)

Loss (gain) on sale of a business	Loss (gain) on sale of a business	781		—		(5,770)		—		Loss (gain) on sale of a business	557		0		(5,213)		0
Other income, net	Other income, net	(735)		(4,589)		(8,467)		(5,695)		Other income, net	(1,420)		(5,364)		(9,887)		(11,059)
Earnings before provision for income taxes	Earnings before provision for income taxes	156,829		249,739		370,329		388,057		Earnings before provision for income taxes	250,997		257,930		621,326		645,987
Provision for income taxes	Provision for income taxes	32,063		51,654		69,284		84,267		Provision for income taxes	50,697		51,924		119,981		136,191

Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	200,300	$	206,006	$	501,345	$	509,796

Net earnings per share:	Net earnings per share:									Net earnings per share:
Basic	Basic	$	0.87	$	1.36	$	2.09	$	2.09	Basic	$	1.39	$	1.42	$	3.48	$	3.51
Diluted	Diluted	$	0.86	$	1.35	$	2.07	$	2.07	Diluted	$	1.38	$	1.40	$	3.45	$	3.47
Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	143,955		145,366		144,107		145,227		Basic	144,032		145,372		144,082		145,276
Diluted	Diluted	144,995		147,179		145,359		147,041		Diluted	145,289		147,051		145,313		147,053

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

(Unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	200,300	$	206,006	$	501,345	$	509,796
Other comprehensive (loss) earnings, net of tax
Other comprehensive earnings (loss), net of tax										Other comprehensive earnings (loss), net of tax
Foreign currency translation adjustments:	Foreign currency translation adjustments:									Foreign currency translation adjustments:
Foreign currency translation gains (losses)	Foreign currency translation gains (losses)	44,569		(13,978)		(48,985)		9,722		Foreign currency translation gains (losses)	29,271		(50,865)		(19,714)		(41,143)
Reclassification of foreign currency translation losses to earnings	Reclassification of foreign currency translation losses to earnings	—		—		—		25,339		Reclassification of foreign currency translation losses to earnings	0		0		0		25,339
Total foreign currency translation adjustments	Total foreign currency translation adjustments	44,569		(13,978)		(48,985)		35,061		Total foreign currency translation adjustments	29,271		(50,865)		(19,714)		(15,804)
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	1,835		77		3,504		252		Amortization of actuarial losses included in net periodic pension cost	1,881		127		5,385		379
Amortization of prior service costs included in net periodic pension cost	Amortization of prior service costs included in net periodic pension cost	259		512		544		1,084		Amortization of prior service costs included in net periodic pension cost	250		539		794		1,623

Total pension and other post-retirement benefit plans	Total pension and other post-retirement benefit plans	2,094		589		4,048		1,336		Total pension and other post-retirement benefit plans	2,131		666		6,179		2,002
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 gains (losses) arising during period		1,880		(3,362)		(3,194)		(768)
Unrealized net (losses) gains arising during period										Unrealized net (losses) gains arising during period	(278)		545		(3,472)		(223)
Net (gains) losses reclassified into earnings	Net (gains) losses reclassified into earnings	(594)		(416)		528		(646)		Net (gains) losses reclassified into earnings	(210)		577		318		(69)
Total cash flow hedges	Total cash flow hedges	1,286		(3,778)		(2,666)		(1,414)		Total cash flow hedges	(488)		1,122		(3,154)		(292)

Other comprehensive earnings (loss), net of tax	Other comprehensive earnings (loss), net of tax	47,949		(17,167)		(47,603)		34,983		Other comprehensive earnings (loss), net of tax	30,914		(49,077)		(16,689)		(14,094)
Comprehensive earnings	Comprehensive earnings	$	172,715	$	180,918	$	253,442	$	338,773	Comprehensive earnings	$	231,214	$	156,929	$	484,656	$	495,702

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Assets	Assets									Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	649,032	$	397,253	Cash and cash equivalents	$	427,501	$	397,253

Receivables, net of allowances of $38,825 and $29,381		1,142,583		1,217,190
Receivables, net of allowances of $40,393 and $29,381						Receivables, net of allowances of $40,393 and $29,381	1,203,429		1,217,190
Inventories	Inventories	885,972		806,141		Inventories	838,539		806,141
Prepaid and other current assets	Prepaid and other current assets	121,858		127,846		Prepaid and other current assets	135,515		127,846

Total current assets	Total current assets	2,799,445		2,548,430		Total current assets	2,604,984		2,548,430
Property, plant and equipment, net	Property, plant and equipment, net	858,274		842,318		Property, plant and equipment, net	879,620		842,318

Goodwill	Goodwill	3,919,851		3,783,347		Goodwill	3,966,890		3,783,347
Intangible assets, net	Intangible assets, net	1,084,834		1,055,014		Intangible assets, net	1,065,815		1,055,014
Other assets and deferred charges	Other assets and deferred charges	451,729		440,368		Other assets and deferred charges	468,662		440,368

Total assets	Total assets	$	9,114,133	$	8,669,477	Total assets	$	8,985,971	$	8,669,477

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity									Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:
Notes payable	Notes payable	$	505,000	$	84,700	Notes payable	$	90,500	$	84,700
Accounts payable	Accounts payable	912,588		983,293		Accounts payable	899,814		983,293
Accrued compensation and employee benefits	Accrued compensation and employee benefits	176,767		226,658		Accrued compensation and employee benefits	224,016		226,658
Accrued insurance	Accrued insurance	108,068		98,432		Accrued insurance	106,221		98,432
Other accrued expenses	Other accrued expenses	375,678		339,060		Other accrued expenses	434,621		339,060
Federal and other income taxes	Federal and other income taxes	35,660		17,748		Federal and other income taxes	11,199		17,748

Total current liabilities	Total current liabilities	2,113,761		1,749,891		Total current liabilities	1,766,371		1,749,891
Long-term debt	Long-term debt	3,000,870		2,985,716		Long-term debt	3,047,216		2,985,716
Deferred income taxes	Deferred income taxes	319,396		322,036		Deferred income taxes	304,688		322,036
Noncurrent income tax payable	Noncurrent income tax payable	47,964		52,000		Noncurrent income tax payable	47,964		52,000
Other liabilities	Other liabilities	542,615		527,174		Other liabilities	573,311		527,174

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

Total stockholders' equity	Total stockholders' equity	3,089,527		3,032,660		Total stockholders' equity	3,246,421		3,032,660
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	9,114,133	$	8,669,477	Total liabilities and stockholders' equity	$	8,985,971	$	8,669,477

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) earnings		Total stockholders' equity			Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) earnings		Total stockholders' equity
Balance at March 31, 2020		$	258,745	$	862,747	$	(6,143,758)	$	8,314,525	$	(311,578)	$	2,980,681
Balance at June 30, 2020														Balance at June 30, 2020	$	258,768	$	869,526	$	(6,143,758)	$	8,368,620	$	(263,629)	$	3,089,527
Net earnings	Net earnings	—		—		—		124,766		—		124,766		Net earnings	0		0		0		200,300		0		200,300
Dividends paid ($0.49 per share)		—		—		—		(70,671)		—		(70,671)
Dividends paid ($0.495 per share)														Dividends paid ($0.495 per share)	0		0		0		(71,458)		0		(71,458)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	23		(1,221)		—		—		—		(1,198)		Common stock issued for the exercise of share-based awards	125		(10,358)		0		0		0		(10,233)
Stock-based compensation expense	Stock-based compensation expense	—		4,968		—		—		—		4,968		Stock-based compensation expense	0		7,371		0		0		0		7,371

Other comprehensive earnings, net of tax	Other comprehensive earnings, net of tax	—		—		—		—		47,949		47,949		Other comprehensive earnings, net of tax	0		0		0		0		30,914		30,914
Other, net		—		3,032		—		—		—		3,032
Balance at June 30, 2020		$	258,768	$	869,526	$	(6,143,758)	$	8,368,620	$	(263,629)	$	3,089,527

Balance at September 30, 2020														Balance at September 30, 2020	$	258,893	$	866,539	$	(6,143,758)	$	8,497,462	$	(232,715)	$	3,246,421


		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		Treasury stock		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
Balance at March 31, 2019		$	258,214	$	866,365	$	(5,947,562)	$	7,851,382	$	(190,946)	$	2,837,453
Balance at June 30, 2019														Balance at June 30, 2019	$	258,315	$	873,034	$	(5,947,562)	$	7,979,597	$	(208,113)	$	2,955,271
Net earnings	Net earnings	—		—		—		198,085		—		198,085		Net earnings	0		0		0		206,006		0		206,006
Dividends paid ($0.48 per share)		—		—		—		(69,921)		—		(69,921)
Dividends paid ($0.49 per share)														Dividends paid ($0.49 per share)	0		0		0		(71,342)		0		(71,342)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	101		(1,702)		—		—		—		(1,601)		Common stock issued for the exercise of share-based awards	111		(7,913)		0		0		0		(7,802)
Stock-based compensation expense	Stock-based compensation expense	—		8,435		—		—		—		8,435		Stock-based compensation expense	0		7,876		0		0		0		7,876

Common stock acquired														Common stock acquired	0		0		(23,280)		0		0		(23,280)
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—		—		—		—		(17,167)		(17,167)		Other comprehensive loss, net of tax	0		0		0		0		(49,077)		(49,077)
Other, net	Other, net	—		(64)		—		51		—		(13)		Other, net	0		(8)		0		(1)		0		(9)
Balance at June 30, 2019		$	258,315	$	873,034	$	(5,947,562)	$	7,979,597	$	(208,113)	$	2,955,271
Balance at September 30, 2019														Balance at September 30, 2019	$	258,426	$	872,989	$	(5,970,842)	$	8,114,260	$	(257,190)	$	3,017,643

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		Treasury stock		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
Balance at December 31, 2019	Balance at December 31, 2019	$	258,552	$	869,719	$	(6,090,842)	$	8,211,257	$	(216,026)	$	3,032,660	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	Adoption of ASU 2016-13	—		—		—		(2,112)		—		(2,112)		Adoption of ASU 2016-13	0		0		0		(2,112)		0		(2,112)
Net earnings	Net earnings	—		—		—		301,045		—		301,045		Net earnings	0		0		0		501,345		0		501,345
Dividends paid ($0.98 per share)		—		—		—		(141,570)		—		(141,570)
Dividends paid ($1.475 per share)														Dividends paid ($1.475 per share)	0		0		0		(213,028)		0		(213,028)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	216		(11,433)		—		—		—		(11,217)		Common stock issued for the exercise of share-based awards	341		(21,791)		0		0		0		(21,450)
Stock-based compensation expense	Stock-based compensation expense	—		8,220		—		—		—		8,220		Stock-based compensation expense	0		15,591		0		0		0		15,591
Common stock acquired	Common stock acquired	—		—		(52,916)		—		—		(52,916)		Common stock acquired	0		0		(52,916)		0		0		(52,916)
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—		—		—		—		(47,603)		(47,603)		Other comprehensive loss, net of tax	0		0		0		0		(16,689)		(16,689)
Other, net	Other, net	—		3,020		—		—		—		3,020		Other, net	0		3,020		0		0		0		3,020
Balance at June 30, 2020		$	258,768	$	869,526	$	(6,143,758)	$	8,368,620	$	(263,629)	$	3,089,527
Balance at September 30, 2020														Balance at September 30, 2020	$	258,893	$	866,539	$	(6,143,758)	$	8,497,462	$	(232,715)	$	3,246,421


		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		Treasury stock		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity
Balance at December 31, 2018	Balance at December 31, 2018	$	257,822	$	886,016	$	(5,947,562)	$	7,815,486	$	(243,096)	$	2,768,666	Balance at December 31, 2018	$	257,822	$	886,016	$	(5,947,562)	$	7,815,486	$	(243,096)	$	2,768,666
Net earnings	Net earnings	—		—		—		303,790		—		303,790		Net earnings	0		0		0		509,796		0		509,796
Dividends paid ($0.96 per share)		—		—		—		(139,730)		—		(139,730)
Dividends paid ($1.45 per share)														Dividends paid ($1.45 per share)	0		0		0		(211,072)		0		(211,072)
Common stock issued for the exercise of share-based awards	Common stock issued for the exercise of share-based awards	493		(21,702)		—		—		—		(21,209)		Common stock issued for the exercise of share-based awards	604		(29,615)		0		0		0		(29,011)
Stock-based compensation expense	Stock-based compensation expense	—		16,617		—		—		—		16,617		Stock-based compensation expense	0		24,493		0		0		0		24,493

Other comprehensive earnings, net of tax		—		—		—		—		34,983		34,983
Common stock acquired														Common stock acquired	0		0		(23,280)		0		0		(23,280)
Other comprehensive loss, net of tax														Other comprehensive loss, net of tax	0		0		0		0		(14,094)		(14,094)
Other, net	Other, net	—		(7,897)		—		51		—		(7,846)		Other, net	0		(7,905)		0		50		0		(7,855)
Balance at June 30, 2019		$	258,315	$	873,034	$	(5,947,562)	$	7,979,597	$	(208,113)	$	2,955,271
Balance at September 30, 2019														Balance at September 30, 2019	$	258,426	$	872,989	$	(5,970,842)	$	8,114,260	$	(257,190)	$	3,017,643

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Six Months Ended June 30,							Nine Months Ended September 30,
		2020		2019			2020		2019
Operating Activities:	Operating Activities:					Operating Activities:
Net earnings	Net earnings	$	301,045	$	303,790	Net earnings	$	501,345	$	509,796

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	Loss on assets held for sale	—		46,946		Loss on assets held for sale	0		46,946
Depreciation and amortization	Depreciation and amortization	136,355		135,507		Depreciation and amortization	205,844		202,294
Stock-based compensation expense	Stock-based compensation expense	8,220		16,617		Stock-based compensation expense	15,591		24,493

Gain on sale of a business	Gain on sale of a business	(5,770)		—		Gain on sale of a business	(5,213)		0
Other, net	Other, net	(9,021)		(5,373)		Other, net	(7,731)		(6,107)
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	73,317		(63,228)		Accounts receivable, net	31,631		(67,603)
Inventories	Inventories	(80,883)		(93,554)		Inventories	(19,360)		(74,412)
Prepaid expenses and other assets	Prepaid expenses and other assets	(12,975)		(23,359)		Prepaid expenses and other assets	(24,198)		(29,336)
Accounts payable	Accounts payable	(72,009)		(7,128)		Accounts payable	(92,071)		(3,875)
Accrued compensation and employee benefits	Accrued compensation and employee benefits	(63,621)		(50,246)		Accrued compensation and employee benefits	(13,136)		(5,908)
Accrued expenses and other liabilities	Accrued expenses and other liabilities	55,736		(20,915)		Accrued expenses and other liabilities	118,779		(3,833)

Accrued and deferred taxes, net	Accrued and deferred taxes, net	17,278		(5,824)		Accrued and deferred taxes, net	(24,562)		(8,357)
Net cash provided by operating activities	Net cash provided by operating activities	347,672		233,233		Net cash provided by operating activities	686,919		584,098

Investing Activities:	Investing Activities:					Investing Activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(79,171)		(91,092)		Additions to property, plant and equipment	(123,564)		(137,276)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(238,839)		(215,304)		Acquisitions, net of cash acquired	(258,674)		(215,687)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	2,886		2,633		Proceeds from sale of property, plant and equipment	5,090		2,838
Proceeds from sale of businesses	Proceeds from sale of businesses	16,850		24,218		Proceeds from sale of businesses	15,400		24,218
Other	Other	—		(7,900)		Other	(1,250)		(10,150)
Net cash used in investing activities	Net cash used in investing activities	(298,274)		(287,445)		Net cash used in investing activities	(362,998)		(336,057)

Financing Activities:	Financing Activities:					Financing Activities:
Repurchase of common stock	Repurchase of common stock	(52,916)		—		Repurchase of common stock	(52,916)		(23,280)

Change in notes payable	Change in notes payable	420,300		137,350		Change in notes payable	5,811		(37,650)
Dividends paid to stockholders	Dividends paid to stockholders	(141,570)		(139,730)		Dividends paid to stockholders	(213,028)		(211,072)
Payments to settle employee tax obligations on exercise of share-based awards	Payments to settle employee tax obligations on exercise of share-based awards	(11,217)		(21,209)		Payments to settle employee tax obligations on exercise of share-based awards	(21,450)		(29,011)

Other	Other	(1,101)		(940)		Other	(1,753)		(1,417)
Net cash provided by (used in) financing activities		213,496		(24,529)
Net cash used in financing activities						Net cash used in financing activities	(283,336)		(302,430)

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(11,115)		3,846		Effect of exchange rate changes on cash and cash equivalents	(10,337)		(1,300)

Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	251,779		(74,895)		Net increase (decrease) in cash and cash equivalents	30,248		(55,689)
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	397,253		396,221
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	649,032	$	321,326	Cash and cash equivalents at end of period	$	427,501	$	340,532

See Notes to Condensed Consolidated Financial Statements

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1. Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim periods and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes for Dover Corporation ("Dover" or the "Company") for the year ended December 31, 2019, included in the Company's Annual Report on Form 10-K filed with the SEC on February 14, 2020. 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 services 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 and geographic location, as it best depicts the nature and amount of the Company’s revenue. See Note 17 — Segment Information for revenue by segment and geographic locations.

At ~~June~~September 30, 2020, we estimated that ~~$155~~$269 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 ~~76%~~66% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through 2021, with the remaining balance to be recognized in 2022 and thereafter.

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


		June 30, 2020		December 31, 2019		January 1, 2019			September 30, 2020		December 31, 2019		January 1, 2019

Contract assets	Contract assets	$	16,423	$	14,894	$	9,330	Contract assets	$	20,070	$	14,894	$	9,330
Contract liabilities - current	Contract liabilities - current	78,258		44,001		36,461		Contract liabilities - current	113,179		44,001		36,461
Contract liabilities - non-current	Contract liabilities - non-current	12,247		9,121		9,382		Contract liabilities - non-current	13,660		9,121		9,382

The revenue recognized during the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 that was included in contract liabilities at the beginning of the period amounted to ~~$26,113~~$31,561 and ~~$27,701,~~$25,977, respectively.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

3. Acquisitions

2020 Acquisitions

During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company acquired ~~three~~five businesses in separate transactions for total consideration of ~~$238,839,~~$258,674, net of cash acquired. These businesses were acquired to complement and expand upon existing operations within the Imaging & Identification, Engineered Products, and Pumps & Process Solutions 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 ~~$33,159~~$33,183 is deductible for income tax purposes and goodwill in the amount of ~~$112,178~~$124,691 is non-deductible for income tax purposes for these acquisitions.

On August 20, 2020, the Company acquired 100% of the voting stock of Solaris Laser S.A. ("Solaris"), a global manufacturer of product identification and traceability solutions for $18,605, net of cash acquired. The Solaris acquisition enhances the Imaging & Identification segment's growing laser technology product line and further strengthens its position as a leading provider of marking and coding equipment and solutions. In connection with this acquisition, the Company recorded goodwill of $11,693 and intangible assets of $3,280, primarily related to unpatented technology.

On April 30, 2020, the Company acquired 100% of the voting stock of Em-tec GmbH ("Em-tec"), a leading designer and manufacturer of flow measurement devices that serve a wide array of medical and biopharmaceutical applications for $30,396, net of cash acquired. The Em-tec acquisition further expands the Company's reach into biopharma and other hygienic applications and enhances its portfolio of flow control technologies within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $19,572 and intangible assets of $8,344, 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 $45,500, 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 ~~$33,159~~$33,183 and intangible assets of $12,800, primarily related to customer intangibles.

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 ~~$162,943,~~$161,830, 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 ~~$92,606~~$91,493 and intangible assets of $76,100, primarily related to customer intangibles.

One other immaterial acquisition was completed during the nine months ended September 30, 2020, within the Pumps & Process Solutions segment.

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

Total

Current assets, net of cash acquired

~~25,699~~30,287

Property, plant and equipment

~~3,783~~6,642

Goodwill

~~145,337~~157,874

Intangible assets

100,524

~~97,244~~

Current liabilities

~~(18,380)~~(20,249)

Other liabilities

~~(14,844)~~(16,404)

Net assets acquired

~~238,839~~258,674

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

Amount allocated Useful life
(in years)
Goodwill - tax deductible $ 33,159 na
Goodwill - non deductible 112,178 na
Customer intangibles 79,295 12
Trademarks 6,171 15
Other intangibles 11,778 6 - 9
$ 242,581

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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


	Amount allocated		Useful life (in years)
Goodwill - tax deductible	$	33,183	na
Goodwill - non deductible	124,691		na
Customer intangibles	79,795		10	-	12
Unpatented technology	14,098		6	-	9
Trademarks	6,631		15

	$	258,398

2019 Acquisitions

During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company acquired ~~two~~three businesses in separate transactions for total consideration of ~~$215,304,~~$216,398, net of cash ~~acquired.~~acquired and including contingent consideration. These businesses were acquired to complement and expand upon existing operations within the Fueling Solutions and Pumps & Process Solutions segment. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. The goodwill is deductible for U.S. income tax purposes for these acquisitions.

On May 7, 2019, the Company acquired the assets of the All-Flo Pump Company, Limited business ("All-Flo"), a growing manufacturer of specialty pumps for $39,954. The All-Flo acquisition strengthens Dover's position in the growing market for air-operated double-diaphragm pumps within the Pumps & Process Solutions segment. The Company recorded goodwill of ~~$20,951~~$20,567 and intangible assets of $14,980. The intangible assets are being amortized over 13 to 15 years.

On January 25, 2019, the Company acquired the assets of Belanger, Inc. ("Belanger"), a leading full-line car wash equipment manufacturer for $175,350, net of cash acquired. The Belanger acquisition strengthens Dover's position in the vehicle wash business within the Fueling Solutions segment. In connection with this acquisition, the Company recorded goodwill of $98,084 and intangible assets of $77,000, primarily related to customer intangibles. The intangible assets are being amortized over 9 to 15 years.

One other immaterial acquisition was completed during the nine months ended September 30, 2019, which included contingent consideration, within the Pumps & Process Solutions segment.

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 and ~~six~~nine months ended ~~June~~September 30, 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 the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Revenue:	Revenue:									Revenue:
As reported	As reported	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	As reported	$	1,748,256	$	1,825,345	$	4,903,370	$	5,360,808
Pro forma	Pro forma	1,502,018		1,828,174		3,165,053		3,575,903		Pro forma	1,752,155		1,845,416		4,924,687		5,428,757
Net earnings:	Net earnings:													Net earnings:
As reported	As reported	$	124,766	$	198,085	$	301,045	$	303,790	As reported	$	200,300	$	206,006	$	501,345	$	509,796
Pro forma	Pro forma	128,377		198,659		308,844		304,881		Pro forma	203,133		206,333		512,190		511,425

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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. The Company recognized total consideration of $15,400, which included a working capital ~~adjustment recognized in the second quarter to be paid in the third quarter of 2020.~~adjustment. This sale resulted in a pre-tax gain on sale of ~~$5,770~~$5,213 included within the Condensed Consolidated Statements of Earnings and within the Refrigeration & Food Equipment Segment for the ~~six~~nine months ended ~~June~~September 30, 2020. The sale does not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

2019

On March 29, 2019, the Company entered into a definitive agreement to sell Finder Pompe S.r.l ("Finder"), a wholly owned subsidiary, to Gruppo Aturia S.p.A (“Aturia”). 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 not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

5. Inventories


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Raw materials	Raw materials	$	510,602	$	467,912	Raw materials	$	488,907	$	467,912
Work in progress	Work in progress	177,100		162,670		Work in progress	168,143		162,670
Finished goods	Finished goods	312,202		280,051		Finished goods	298,925		280,051
Subtotal	Subtotal	999,904		910,633		Subtotal	955,975		910,633
Less reserves	Less reserves	(113,932)		(104,492)		Less reserves	(117,436)		(104,492)
Total	Total	$	885,972	$	806,141	Total	$	838,539	$	806,141

6. Property, Plant and Equipment, net


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Land	Land	$	57,857	$	56,583	Land	$	59,511	$	56,583
Buildings and improvements	Buildings and improvements	541,860		527,192		Buildings and improvements	549,617		527,192
Machinery, equipment and other	Machinery, equipment and other	1,687,048		1,648,354		Machinery, equipment and other	1,731,771		1,648,354
Property, plant and equipment, gross	Property, plant and equipment, gross	2,286,765		2,232,129		Property, plant and equipment, gross	2,340,899		2,232,129
Accumulated depreciation	Accumulated depreciation	(1,428,491)		(1,389,811)		Accumulated depreciation	(1,461,279)		(1,389,811)
Property, plant and equipment, net	Property, plant and equipment, net	$	858,274	$	842,318	Property, plant and equipment, net	$	879,620	$	842,318

Depreciation expense totaled ~~$33,365~~$34,096 and ~~$33,031~~$32,145 for the three months ended ~~June~~September 30, 2020 and 2019, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, depreciation expense was ~~$67,920~~$102,016 and ~~$65,219,~~$97,364, respectively.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 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

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

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~~forward-looking 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	~~8,545~~10,248
Amounts written off charged against the allowance	~~(1,490)~~(2,113)
Other, including dispositions and foreign currency translation	~~(317)~~171
Ending balance, ~~June~~September 30	$	~~38,825~~40,393

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			Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Total
Balance at December 31, 2019	Balance at December 31, 2019	$	636,571	$	873,381	$	977,069	$	750,627	$	545,699	$	3,783,347	Balance at December 31, 2019	$	636,571	$	873,381	$	977,069	$	750,627	$	545,699	$	3,783,347
Acquisitions	Acquisitions	33,159		—		92,606		19,572		—		145,337		Acquisitions	33,183		0		103,186		21,505		0		157,874

Disposition of business	Disposition of business	—		—		—		—		(2,597)		(2,597)		Disposition of business	0		0		0		0		(2,597)		(2,597)
Foreign currency translation	Foreign currency translation	390		(10,775)		3,722		237		190		(6,236)		Foreign currency translation	5,675		(19)		16,112		5,697		801		28,266
Balance at June 30, 2020		$	670,120	$	862,606	$	1,073,397	$	770,436	$	543,292	$	3,919,851
Balance at September 30, 2020														Balance at September 30, 2020	$	675,429	$	873,362	$	1,096,367	$	777,829	$	543,903	$	3,966,890

During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company recorded additions of ~~$145,337~~$157,874 to goodwill as a result of the acquisitions within the Engineered Products, Imaging & Identification, and Pumps & Process Solutions segments discussed in Note 3 — Acquisitions. During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company disposed of $2,597 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

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

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


		June 30, 2020										December 31, 2019											September 30, 2020				December 31, 2019
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:	Amortized intangible assets:													Amortized intangible assets:
Customer intangibles	Customer intangibles	$	1,491,875	$	764,239	$	727,636	$	1,410,636	$	714,566	$	696,070	Customer intangibles	$	1,509,305	$	796,653	$	712,652	$	1,410,636	$	714,566	$	696,070
Trademarks	Trademarks	224,109		93,667		130,442		218,064		85,791		132,273		Trademarks	226,762		98,541		128,221		218,064		85,791		132,273
Patents	Patents	160,200		136,491		23,709		159,376		133,677		25,699		Patents	161,314		138,584		22,730		159,376		133,677		25,699
Unpatented technologies	Unpatented technologies	166,681		104,655		62,026		154,505		99,276		55,229		Unpatented technologies	170,859		108,633		62,226		154,505		99,276		55,229
Distributor relationships	Distributor relationships	82,196		47,159		35,037		82,779		44,202		38,577		Distributor relationships	84,045		49,200		34,845		82,779		44,202		38,577
Drawings & manuals	Drawings & manuals	27,327		23,381		3,946		27,500		22,403		5,097		Drawings & manuals	28,054		24,585		3,469		27,500		22,403		5,097
Other	Other	23,508		18,114		5,394		22,355		16,939		5,416		Other	23,558		18,609		4,949		22,355		16,939		5,416
Total	Total	2,175,896		1,187,706		988,190		2,075,215		1,116,854		958,361		Total	2,203,897		1,234,805		969,092		2,075,215		1,116,854		958,361
Unamortized intangible assets:	Unamortized intangible assets:															Unamortized intangible assets:
Trademarks	Trademarks	96,644		—		96,644		96,653		—		96,653		Trademarks	96,723		0		96,723		96,653		0		96,653
Total intangible assets, net	Total intangible assets, net	$	2,272,540	$	1,187,706	$	1,084,834	$	2,171,868	$	1,116,854	$	1,055,014	Total intangible assets, net	$	2,300,620	$	1,234,805	$	1,065,815	$	2,171,868	$	1,116,854	$	1,055,014

Amortization expense was ~~$34,238~~$35,393 and ~~$34,738,~~$34,642, respectively, including acquisition-related intangible amortization of ~~$33,829~~$34,797 and ~~$34,219~~$34,157 for the three months ended ~~June~~September 30, 2020 and 2019, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, amortization expense was ~~$68,435~~$103,828 and ~~$70,288,~~$104,930, respectively, including acquisition-related intangible amortization of ~~$67,646~~$102,443 and ~~$69,374,~~$103,531, respectively.

9. Restructuring Activities

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Engineered Products	Engineered Products	$	4,160	$	1,122	$	4,518	$	1,201	Engineered Products	$	2,342	$	556	$	6,860	$	1,757
Fueling Solutions	Fueling Solutions	911		1,776		2,386		2,514		Fueling Solutions	1,572		825		3,958		3,339
Imaging & Identification	Imaging & Identification	(522)		1,386		(266)		1,677		Imaging & Identification	99		296		(167)		1,973
Pumps & Process Solutions	Pumps & Process Solutions	4,706		501		8,552		882		Pumps & Process Solutions	1,719		907		10,271		1,789
Refrigeration & Food Equipment	Refrigeration & Food Equipment	2,213		227		2,773		1,639		Refrigeration & Food Equipment	534		495		3,307		2,134
Corporate	Corporate	816		726		1,662		761		Corporate	474		257		2,136		1,018
Total	Total	$	12,284	$	5,738	$	19,625	$	8,674	Total	$	6,740	$	3,336	$	26,365	$	12,010

These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:	These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:																	These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services	Cost of goods and services	$	7,557	$	1,183	$	9,099	$	2,362	Cost of goods and services	$	2,710	$	2,073	$	11,809	$	4,435
Selling, general and administrative expenses	Selling, general and administrative expenses	4,727		4,555		10,526		6,312		Selling, general and administrative expenses	4,030		1,263		14,556		7,575
Total	Total	$	12,284	$	5,738	$	19,625	$	8,674	Total	$	6,740	$	3,336	$	26,365	$	12,010

The restructuring expenses of ~~$12,284~~$6,740 and ~~$19,625~~$26,365 incurred during the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, were a result of restructuring programs initiated primarily in 2020. Restructuring expense was comprised primarily of new actions executed in response to lower demand driven by COVID-19 ~~and~~as well as continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint ~~consolidation, and operational optimization and IT centralization. Additional programs, beyond the scope of the announced programs, may be implemented during 2020 with related restructuring charges.~~

~~The $12,284 of restructuring charges incurred during the second quarter of 2020 primarily included the following items:~~

•~~The Engineered Products segment recorded $4,160 of restructuring charges principally related to headcount reductions.~~

•~~The Fueling Solutions segment recorded $911 of restructuring charges primarily due to facility restructuring costs.~~

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

consolidation, and operational optimization and IT centralization. Additional programs, beyond the scope of the announced programs, may be implemented during 2020 with related restructuring charges.

The $6,740 of restructuring charges incurred during the third quarter of 2020 primarily included the following items:

•The Engineered Products segment recorded $2,342 of restructuring charges principally related to headcount reductions.

•The Fueling Solutions segment recorded $1,572 of restructuring charges primarily due to headcount reductions.

•The Imaging & Identification segment recorded a restructuring ~~benefit~~charges of ~~$522~~$99 principally related to ~~updated headcount reduction estimates.~~facility restructuring costs.

•The Pumps & Process Solutions segment recorded ~~$4,706~~$1,719 of restructuring expense primarily due to headcount ~~reductions and facility restructuring costs.~~reductions.

•The Refrigeration & Food Equipment segment recorded ~~$2,213~~$534 of restructuring expense primarily due to headcount reductions and facility restructuring costs.

•Corporate recorded ~~$816~~$474 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	Balance at December 31, 2019	$	13,751	$	2,639		$	16,390	Balance at December 31, 2019	$	13,751	$	2,639		$	16,390
Restructuring charges	Restructuring charges	13,714		5,911			19,625		Restructuring charges	18,832		7,533			26,365
Payments	Payments	(17,070)		(2,293)			(19,363)		Payments	(24,837)		(3,895)			(28,732)

Other, including foreign currency translation	Other, including foreign currency translation	372		(4,045)		⁽¹⁾	(3,673)		Other, including foreign currency translation	466		(3,982)		⁽¹⁾	(3,516)
Balance at June 30, 2020		$	10,767	$	2,212		$	12,979
Balance at September 30, 2020									Balance at September 30, 2020	$	8,212	$	2,295		$	10,507

⁽¹⁾ Other activity in exit reserves primarily represents the non-cash write-off of certain long-lived assets in connection with certain facility closures.

10. Borrowings

Borrowings consisted of the following:


		June 30, 2020		December 31, 2019			September 30, 2020		December 31, 2019
Short-term	Short-term					Short-term

Commercial paper	Commercial paper	$	505,000	$	84,700	Commercial paper	$	90,500	$	84,700
Notes payable	Notes payable	$	505,000	$	84,700	Notes payable	$	90,500	$	84,700


				Carrying amount ⁽¹⁾									Carrying amount ⁽¹⁾
		Principal		June 30, 2020		December 31, 2019			Principal		September 30, 2020		December 31, 2019
Long-term	Long-term							Long-term
3.15% 10-year notes due November 15, 2025	3.15% 10-year notes due November 15, 2025	$	400,000	$	396,379	$	396,042	3.15% 10-year notes due November 15, 2025	$	400,000	$	396,548	$	396,042
1.25% 10-year notes due November 9, 2026 (euro-denominated)	1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	665,896		658,089		1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	690,939		658,089
0.750% 8-year notes due November 4, 2027 (euro denominated)	0.750% 8-year notes due November 4, 2027 (euro denominated)	€	500,000	554,458		548,008		0.750% 8-year notes due November 4, 2027 (euro denominated)	€	500,000	575,313		548,008
6.65% 30-year debentures due June 1, 2028	6.65% 30-year debentures due June 1, 2028	$	200,000	199,205		199,155		6.65% 30-year debentures due June 1, 2028	$	200,000	199,230		199,155
2.950% 10-year notes due November 4, 2029	2.950% 10-year notes due November 4, 2029	$	300,000	296,460		296,270		2.950% 10-year notes due November 4, 2029	$	300,000	296,555		296,270
5.375% 30-year debentures due October 15, 2035	5.375% 30-year debentures due October 15, 2035	$	300,000	296,185		296,060		5.375% 30-year debentures due October 15, 2035	$	300,000	296,247		296,060
6.60% 30-year notes due March 15, 2038	6.60% 30-year notes due March 15, 2038	$	250,000	247,996		247,939		6.60% 30-year notes due March 15, 2038	$	250,000	248,024		247,939
5.375% 30-year notes due March 1, 2041	5.375% 30-year notes due March 1, 2041	$	350,000	344,291		344,153		5.375% 30-year notes due March 1, 2041	$	350,000	344,360		344,153

Total long-term debt	Total long-term debt			$	3,000,870	$	2,985,716	Total long-term debt			$	3,047,216	$	2,985,716

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

$~~18.0~~17.8 million and $18.9 million as of ~~June~~September 30, 2020 and December 31, 2019, respectively. Total deferred debt issuance costs were ~~$15.3~~$14.8 million and $16.2 million as of ~~June~~September 30, 2020 and December 31, 2019, respectively.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of ~~June~~September 30, 2020, 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. The Company uses the Credit Agreement principally as liquidity back-up for its commercial paper program. On March 16, 2020, the Company borrowed $500 million 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. ~~As of June 30, 2020, the Company repaid the $500 million borrowed under the Credit Agreement by resumed commercial paper borrowings.~~

On May 6, 2020, the Company entered into a $450.0 million 364-day revolving credit facility (the "Short-term Credit Agreement") with a syndicate of banks which expires on May 5, 2021. The Short-term Credit Agreement is intended to be used primarily for working capital and general corporate purposes. The Company may elect to have loans under the Short-term Credit Agreement which bear interest at a base rate plus a specified applicable margin. The Short-term 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 has not undertaken any borrowings under this facility.

The Company was in compliance with all covenants in the Credit Agreement, the Short-term Credit Agreement, and other long-term debt covenants at ~~June~~September 30, 2020 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of ~~10.7~~11.0 to 1.

As of ~~June~~September 30, 2020, the Company had approximately ~~$174.7~~$157.6 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.

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 ~~June~~September 30, 2020 and December 31, 2019, the Company had contracts with total notional amounts of ~~$157,510~~$167,123 and $179,580, 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 ~~$91,419~~$85,613 and $79,707 as of ~~June~~September 30, 2020 and December 31, 2019, respectively, that are not designated as hedging instruments. These instruments are used to reduce the 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 ~~June~~September 30, 2020 and December 31, 2019 and the balance sheet lines in which they are recorded:


		Fair Value Asset (Liability)								Fair Value Asset (Liability)
		June 30, 2020		December 31, 2019		Balance Sheet Caption		September 30, 2020		December 31, 2019		Balance Sheet Caption
Foreign currency forward	Foreign currency forward	$	1,792	$	2,892	Prepaid and other current assets	Foreign currency forward	$	1,155	$	2,892	Prepaid and other current assets
Foreign currency forward	Foreign currency forward	(2,112)		(476)		Other accrued expenses	Foreign currency forward	(1,830)		(476)		Other accrued expenses

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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. 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.

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

The Company 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 June 30, Six Months Ended June 30,
2020 2019 2020 2019
Loss on euro-denominated debt $ (36,904) $ (4,710) $ (13,280) $ (1,153)
Tax benefit 8,028 989 2,889 242
Net loss on net investment hedges, net of tax $ (28,876) $ (3,721) $ (10,391) $ (911)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
(Loss) gain on euro-denominated debt	$	(45,379)	$	37,783	$	(58,659)	$	36,630
Tax benefit (expense)	9,872		(7,934)		12,761		(7,692)
Net (loss) gain on net investment hedges, net of tax	$	(35,507)	$	29,849	$	(45,898)	$	28,938

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.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of ~~June~~September 30, 2020 and December 31, 2019:

June 30, 2020

December 31, 2019

September 30, 2020

December 31, 2019

Level 2

Assets:

Foreign currency cash flow hedges

1,792

2,892

Foreign currency cash flow hedges

1,155

2,892

Liabilities:

Foreign currency cash flow hedges

2,112

476

Foreign currency cash flow hedges

1,830

476

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.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The estimated fair value of long-term debt, net at ~~June~~September 30, 2020 and December 31, 2019, was ~~$3,421,108~~$3,546,940 and $3,322,033, 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 ~~June~~September 30, 2020 and December 31, 2019 due to the short-term nature of these instruments.

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

12. Income Taxes

The effective tax rates for the three months ended ~~June~~September 30, 2020 and 2019 were ~~20.4%~~20.2% and ~~20.7%~~20.1%, respectively. The ~~decrease~~increase in the effective tax rate for the three months ended ~~June~~September 30, 2020 relative to the prior comparable period iswas primarily driven by ~~favorable audit settlements.~~discrete items.

The effective tax rates for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 were ~~18.7%~~19.3% and ~~21.7%~~21.1%, respectively. The decrease in the effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2020 relative to the prior year comparable period iswas primarily driven by the ~~favorable audit settlements and the impact of the~~ exclusion of capital ~~loss~~losses on the sale of Finder under local law in ~~2019.~~the prior year, partially offset by the impact of other discrete tax items.

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 ~~$9.6~~$9.8 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 ~~six~~nine months ended ~~June~~September 30, 2020, the Company issued stock-settled appreciation rights ("SARs") covering 390,780 shares, performance share awards of 49,056 and restricted stock units ("RSUs") of ~~79,024.~~83,512.

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.

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


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

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

The performance share awards granted in 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), and are generally recognized ratably

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 were as follows:

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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


	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

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 ~~six~~nine months ended ~~June~~September 30, 2020:


			Performance Shares
			2019
Fair value per share at date of grant			$91.20
Average attainment rate reflected in expense			~~205.54%~~168.96%

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 June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Pre-tax stock-based compensation expense	Pre-tax stock-based compensation expense	$	4,968	$	8,435	$	8,220	$	16,617	Pre-tax stock-based compensation expense	$	7,371	$	7,876	$	15,591	$	24,493
Tax benefit	Tax benefit	(619)		(498)		(968)		(1,546)		Tax benefit	(854)		(489)		(1,822)		(2,035)
Total stock-based compensation expense, net of tax	Total stock-based compensation expense, net of tax	$	4,349	$	7,937	$	7,252	$	15,071	Total stock-based compensation expense, net of tax	$	6,517	$	7,387	$	13,769	$	22,458

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 ~~June~~September 30, 2020 and December 31, 2019, the Company had estimated liabilities totaling ~~$31,892~~$31,308 and $30,608, respectively, for environmental and other matters, including private party claims for exposure to hazardous substances that are probable and estimable.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company 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

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~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

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 ~~June~~September 30, 2020 and December 31, 2019, 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 ~~June~~September 30, 2020 and 2019, were as follows:


		2020		2019			2020		2019
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	$	49,116	$	50,073
Provision for warranties	Provision for warranties	25,341		29,364		Provision for warranties	42,647		46,123
Settlements made	Settlements made	(28,104)		(31,173)		Settlements made	(44,396)		(46,406)
Other adjustments, including acquisitions and currency translation	Other adjustments, including acquisitions and currency translation	(455)		(632)		Other adjustments, including acquisitions and currency translation	129		(1,609)
Ending balance, June 30		$	45,898	$	47,632
Ending balance, September 30						Ending balance, September 30	$	47,496	$	48,181

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 (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.

Qualified Defined Benefits


		Three Months Ended June 30,														Six Months Ended June 30,															Three Months Ended September 30,					Nine Months Ended September 30,
		U.S. Plan						Non-U.S. Plans						U.S. Plan								Non-U.S. Plans					U.S. Plan						Non-U.S. Plans		U.S. Plan	Non-U.S. Plans
		2020		2019		2020		2019		2020		2019		2020		2019			2020		2019		2020		2019		2020		2019		2020		2019
Service cost	Service cost	$	1,706	$	1,754	$	1,295	$	1,291	$	3,412	$	3,508	$	2,588	$	2,836	Service cost	$	1,706	$	1,754	$	1,366	$	1,429	$	5,118	$	5,262	$	3,954	$	4,265
Interest cost	Interest cost	4,068		4,756		796		1,207		8,136		9,513		1,621		2,448		Interest cost	4,068		4,756		839		1,193		12,204		14,269		2,460		3,641
Expected return on plan assets	Expected return on plan assets	(7,869)		(8,534)		(1,637)		(1,608)		(15,738)		(17,068)		(3,314)		(3,126)		Expected return on plan assets	(7,869)		(8,534)		(1,719)		(1,538)		(23,607)		(25,602)		(5,033)		(4,664)
Amortization:	Amortization:																	Amortization:
Prior service cost (credit)	Prior service cost (credit)	57		76		(120)		(138)		114		151		(239)		(196)		Prior service cost (credit)	57		76		(126)		(102)		170		227		(365)		(298)
Recognized actuarial loss	Recognized actuarial loss	1,884		—		735		708		3,768		—		1,476		1,525		Recognized actuarial loss	1,884		0		777		763		5,652		0		2,253		2,288

Net periodic (income) expense	Net periodic (income) expense	$	(154)	$	(1,948)	$	1,069	$	1,460	$	(308)	$	(3,896)	$	2,132	$	3,487	Net periodic (income) expense	$	(154)	$	(1,948)	$	1,137	$	1,745	$	(463)	$	(5,844)	$	3,269	$	5,232

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Non-Qualified Supplemental Benefits


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Service cost	Service cost	$	318	$	486	$	636	$	971	Service cost	$	318	$	486	$	954	$	1,457
Interest cost	Interest cost	442		668		883		1,335		Interest cost	441		668		1,324		2,003
Amortization:	Amortization:									Amortization:
Prior service cost	Prior service cost	424		703		848		1,406		Prior service cost	424		703		1,271		2,109
Recognized actuarial gain	Recognized actuarial gain	(465)		(570)		(929)		(1,140)		Recognized actuarial gain	(464)		(570)		(1,393)		(1,710)

Net periodic expense	Net periodic expense	$	719	$	1,287	$	1,438	$	2,572	Net periodic expense	$	719	$	1,287	$	2,156	$	3,859

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 June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Service cost	Service cost	$	5	$	5	$	10	$	10	Service cost	$	5	$	5	$	15	$	15
Interest cost	Interest cost	61		78		121		156		Interest cost	60		78		181		234
Amortization:	Amortization:									Amortization:
Prior service cost	Prior service cost	4		3		7		7		Prior service cost	3		3		10		10
Recognized actuarial gain	Recognized actuarial gain	(4)		(16)		(8)		(35)		Recognized actuarial gain	(3)		(17)		(11)		(52)

Net periodic expense	Net periodic expense	$	66	$	70	$	130	$	138	Net periodic expense	$	65	$	69	$	195	$	207

The total amount amortized out of accumulated other comprehensive earnings into net periodic pension and post-retirement expense totaled ~~$2,515~~$2,552 and ~~$766~~$856 for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$5,037~~$7,587 and ~~$1,718~~$2,574 for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively.

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 was ~~$12,493,~~$12,530, and ~~$13,247~~$12,188 for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$26,541~~$39,071 and ~~$26,153~~$38,340 for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019.

16. Other Comprehensive Earnings

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


		Three Months Ended										Three Months Ended											Three Months Ended				Three Months Ended
		June 30, 2020										June 30, 2019											September 30, 2020				September 30, 2019
		Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax			Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	Foreign currency translation adjustments	$	36,541	$	8,028	$	44,569	$	(14,967)	$	989	$	(13,978)	Foreign currency translation adjustments	$	19,399	$	9,872	$	29,271	$	(42,931)	$	(7,934)	$	(50,865)
Pension and other post-retirement benefit plans	Pension and other post-retirement benefit plans	2,515		(421)		2,094		766		(177)		589		Pension and other post-retirement benefit plans	2,552		(421)		2,131		856		(190)		666
Changes in fair value of cash flow hedges	Changes in fair value of cash flow hedges	1,651		(365)		1,286		(4,780)		1,002		(3,778)		Changes in fair value of cash flow hedges	(627)		139		(488)		1,419		(297)		1,122

Total other comprehensive (loss) earnings		$	40,707	$	7,242	$	47,949	$	(18,981)	$	1,814	$	(17,167)
Total other comprehensive earnings (loss)														Total other comprehensive earnings (loss)	$	21,324	$	9,590	$	30,914	$	(40,656)	$	(8,421)	$	(49,077)

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


		Six Months Ended										Six Months Ended											Nine Months Ended				Nine Months Ended
		June 30, 2020										June 30, 2019											September 30, 2020				September 30, 2019
		Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax			Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	Foreign currency translation adjustments	$	(51,874)	$	2,889	$	(48,985)	$	34,819	$	242	$	35,061	Foreign currency translation adjustments	$	(32,475)	$	12,761	$	(19,714)	$	(8,112)	$	(7,692)	$	(15,804)
Pension and other post-retirement benefit plans	Pension and other post-retirement benefit plans	5,037		(989)		4,048		1,718		(382)		1,336		Pension and other post-retirement benefit plans	7,587		(1,408)		6,179		2,574		(572)		2,002
Changes in fair value of cash flow hedges	Changes in fair value of cash flow hedges	(3,423)		757		(2,666)		(1,787)		373		(1,414)		Changes in fair value of cash flow hedges	(4,050)		896		(3,154)		(368)		76		(292)

Total other comprehensive (loss) earnings	Total other comprehensive (loss) earnings	$	(50,260)	$	2,657	$	(47,603)	$	34,750	$	233	$	34,983	Total other comprehensive (loss) earnings	$	(28,938)	$	12,249	$	(16,689)	$	(5,906)	$	(8,188)	$	(14,094)

Total comprehensive earnings were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	200,300	$	206,006	$	501,345	$	509,796
Other comprehensive (loss) earnings		47,949		(17,167)		(47,603)		34,983
Other comprehensive earnings (loss)										Other comprehensive earnings (loss)	30,914		(49,077)		(16,689)		(14,094)
Comprehensive earnings	Comprehensive earnings	$	172,715	$	180,918	$	253,442	$	338,773	Comprehensive earnings	$	231,214	$	156,929	$	484,656	$	495,702

Amounts reclassified from accumulated other comprehensive loss to earnings during the three and ~~six~~nine months ended ~~June~~September 30, 2020 and 2019 were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Foreign currency translation:	Foreign currency translation:									Foreign currency translation:
Reclassification of foreign currency translation losses to earnings for assets held for sale	Reclassification of foreign currency translation losses to earnings for assets held for sale	$	—	$	—	$	—	$	25,339	Reclassification of foreign currency translation losses to earnings for assets held for sale	$	0	$	0	$	0	$	25,339
Tax benefit	Tax benefit	—		—		—		—		Tax benefit	0		0		0		0
Net of tax	Net of tax	$	—	$	—	$	—	$	25,339	Net of tax	$	0	$	0	$	0	$	25,339
Pension and other postretirement benefit plans:	Pension and other postretirement benefit plans:									Pension and other postretirement benefit plans:
Amortization of actuarial losses	Amortization of actuarial losses	$	2,150	$	122	$	4,307	$	350	Amortization of actuarial losses	$	2,194	$	176	$	6,501	$	526
Amortization of prior service costs	Amortization of prior service costs	365		644		730		1,368		Amortization of prior service costs	358		680		1,086		2,048

Total before tax	Total before tax	2,515		766		5,037		1,718		Total before tax	2,552		856		7,587		2,574
Tax benefit	Tax benefit	(421)		(177)		(989)		(382)		Tax benefit	(421)		(190)		(1,408)		(572)
Net of tax	Net of tax	$	2,094	$	589	$	4,048	$	1,336	Net of tax	$	2,131	$	666	$	6,179	$	2,002
Cash flow hedges:	Cash flow hedges:									Cash flow hedges:
Net losses (gains) reclassified into earnings		$	(752)	$	(524)	$	668	$	(815)
Tax (benefit) provision		158		108		(140)		169
Net (gains) losses reclassified into earnings										Net (gains) losses reclassified into earnings	$	(266)	$	730	$	402	$	(85)
Tax provision (benefit)										Tax provision (benefit)	56		(153)		(84)		16
Net of tax	Net of tax	$	(594)	$	(416)	$	528	$	(646)	Net of tax	$	(210)	$	577	$	318	$	(69)

The reclassification of foreign currency translation losses to earnings during the ~~six~~nine months ended ~~June~~September 30, 2019 relates to the sale of Finder. See Note 4 — Disposed Operations for further details.

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.

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.

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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.

~~Table of Contents~~

~~DOVER CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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

•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, 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.

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019
Revenue:	Revenue:									Revenue:
Engineered Products	Engineered Products	$	342,380	$	429,928	$	750,540	$	848,779	Engineered Products	$	386,562	$	426,689	$	1,137,102	$	1,275,468
Fueling Solutions	Fueling Solutions	326,495		390,586		686,477		763,636		Fueling Solutions	380,511		411,769		1,066,988		1,175,405
Imaging & Identification	Imaging & Identification	227,977		266,588		484,742		534,942		Imaging & Identification	265,690		275,109		750,432		810,051
Pumps & Process Solutions	Pumps & Process Solutions	309,095		338,924		628,631		669,143		Pumps & Process Solutions	347,875		341,337		976,506		1,010,480
Refrigeration & Food Equipment	Refrigeration & Food Equipment	293,527		385,474		605,440		720,117		Refrigeration & Food Equipment	368,395		370,335		973,835		1,090,452
Intra-segment eliminations	Intra-segment eliminations	(299)		(794)		(716)		(1,154)		Intra-segment eliminations	(777)		106		(1,493)		(1,048)
Total consolidated revenue	Total consolidated revenue	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	Total consolidated revenue	$	1,748,256	$	1,825,345	$	4,903,370	$	5,360,808
Net earnings:	Net earnings:									Net earnings:
Segment earnings (EBIT): ⁽¹⁾	Segment earnings (EBIT): ⁽¹⁾									Segment earnings (EBIT): ⁽¹⁾
Engineered Products	Engineered Products	$	47,702	$	77,129	$	116,796	$	144,248	Engineered Products	$	64,890	$	74,367	$	181,686	$	218,615
Fueling Solutions	Fueling Solutions	47,214		52,637		100,712		89,867		Fueling Solutions	66,601		68,069		167,313		157,936
Imaging & Identification	Imaging & Identification	38,046		54,641		89,528		110,596		Imaging & Identification	51,928		61,655		141,456		172,251
Pumps & Process Solutions ⁽²⁾	Pumps & Process Solutions ⁽²⁾	67,702		76,278		133,781		91,269		Pumps & Process Solutions ⁽²⁾	89,786		77,433		223,567		168,702
Refrigeration & Food Equipment⁽³⁾	Refrigeration & Food Equipment⁽³⁾	11,459		44,375		34,988		69,182		Refrigeration & Food Equipment⁽³⁾	40,159		35,211		75,147		104,393
Total segment earnings (EBIT)	Total segment earnings (EBIT)	212,123		305,060		475,805		505,162		Total segment earnings (EBIT)	313,364		316,735		789,169		821,897
Corporate expense / other ⁽⁴⁾	Corporate expense / other ⁽⁴⁾	27,311		24,512		51,408		55,378		Corporate expense / other ⁽⁴⁾	35,603		28,658		87,011		84,036
Interest expense	Interest expense	28,711		31,754		55,979		63,562		Interest expense	27,724		31,410		83,703		94,972
Interest income	Interest income	(728)		(945)		(1,911)		(1,835)		Interest income	(960)		(1,263)		(2,871)		(3,098)
Earnings before provision for income taxes	Earnings before provision for income taxes	156,829		249,739		370,329		388,057		Earnings before provision for income taxes	250,997		257,930		621,326		645,987
Provision for income taxes	Provision for income taxes	32,063		51,654		69,284		84,267		Provision for income taxes	50,697		51,924		119,981		136,191
Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	200,300	$	206,006	$	501,345	$	509,796

⁽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 ~~six~~nine months ended ~~June~~September 30, 2019 includes a $46,946 loss on assets held for sale for Finder.

⁽³⁾ The three and ~~six~~nine months ended ~~June~~September 30, 2020 include a ~~$781~~$557 expense and a ~~$5,770~~$5,213 net gain on the sale of AMS Chino, respectively. The ~~three and six~~nine months ended ~~June~~September 30, 2020 also include a $3,640 write-off of assets.

⁽⁴⁾ 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.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
Revenue by geography	Revenue by geography	2020		2019		2020		2019		Revenue by geography	2020		2019		2020		2019
United States	United States	$	852,999	$	960,906	$	1,809,639	$	1,880,798	United States	$	952,548	$	1,002,349	$	2,762,187	$	2,883,147
Europe	Europe	320,076		405,274		681,242		807,919		Europe	383,867		376,601		1,065,109		1,184,520
Asia	Asia	164,009		198,278		318,284		394,628		Asia	207,474		229,210		525,758		623,838
Other Americas	Other Americas	112,995		178,216		242,044		316,334		Other Americas	138,060		150,257		380,104		466,591
Other	Other	49,096		68,032		103,905		135,784		Other	66,307		66,928		170,212		202,712
Total	Total	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	Total	$	1,748,256	$	1,825,345	$	4,903,370	$	5,360,808

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.

In the first quarter of 2020, the Company repurchased 548,659 shares of common stock at a total cost of $52,916, or $96.45 per share. The Company suspended share repurchases in the second quarter due to business uncertainty related to ~~COVID-19 which resulted~~COVID-19. This temporary suspension in share repurchases was lifted during the beginning of the third quarter. There were no repurchases ~~under the February 2018 authorization~~ during the three months ended ~~June~~September 30, 2020. ~~The Company lifted this suspension beginning in~~During the ~~second half of the year. There were no share repurchases during the~~ three and ~~six~~nine months ended ~~June~~September 30, ~~2019.~~2019, the Company repurchased 261,807 shares of common stock at a total cost of $23,280, or $88.92.

As of ~~June~~September 30, 2020, 7,811,385 shares remain authorized for repurchase under the February 2018 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 June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019			2020		2019		2020		2019

Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	200,300	$	206,006	$	501,345	$	509,796
Basic earnings per common share:	Basic earnings per common share:									Basic earnings per common share:

Net earnings	Net earnings	$	0.87	$	1.36	$	2.09	$	2.09	Net earnings	$	1.39	$	1.42	$	3.48	$	3.51

Weighted average shares outstanding	Weighted average shares outstanding	143,955,000		145,366,000		144,107,000		145,227,000		Weighted average shares outstanding	144,032,000		145,372,000		144,082,000		145,276,000
Diluted earnings per common share:	Diluted earnings per common share:									Diluted earnings per common share:

Net earnings	Net earnings	$	0.86	$	1.35	$	2.07	$	2.07	Net earnings	$	1.38	$	1.40	$	3.45	$	3.47

Weighted average shares outstanding	Weighted average shares outstanding	144,995,000		147,179,000		145,359,000		147,041,000		Weighted average shares outstanding	145,289,000		147,051,000		145,313,000		147,053,000

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


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2020	2019	2020	2019		2020	2019	2020	2019
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	143,955,000	145,366,000	144,107,000	145,227,000	Weighted average shares outstanding - Basic	144,032,000	145,372,000	144,082,000	145,276,000
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	1,040,000	1,813,000	1,252,000	1,814,000	Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs	1,257,000	1,679,000	1,231,000	1,777,000
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	144,995,000	147,179,000	145,359,000	147,041,000	Weighted average shares outstanding - Diluted	145,289,000	147,051,000	145,313,000	147,053,000

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 121,000 and 30,000 for the three months ended June 30, 2020 and 2019, respectively, and 130,000 and 1,200 for the six months ended June 30, 2020 and 2019, respectively.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The weighted average number of anti-dilutive potential common shares excluded from the calculation above were approximately 36,000 and 28,000 for the three months ended September 30, 2020 and 2019, respectively, and 95,000 and 9,000 for the nine months ended September 30, 2020 and 2019, respectively.

20. Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on 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 the amendments in ASU 2016-13. The Company adopted this guidance prospectively on January 1, 2020. 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. See Note 7 — Credit Losses for further details.

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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, had an adverse impact on our financial results for the three and ~~six~~nine months ended ~~June~~September 30, 2020. ~~The outlook~~Activity in many of ~~our markets remains uncertain and~~ the ~~pandemic is likely to continue negatively impacting levels of commercial activity and our results. Based on~~end-markets we serve has been improving ~~sequential revenue and bookings trends in~~since the second quarter of 2020 and we ~~anticipate~~expect that ~~activity will improve~~improvement trend to continue for most of our businesses in the ~~third~~fourth quarter. ~~However, we do not expect to return to normal levels or growth for~~We are cautiously optimistic about the remainder of the year, ~~across~~however, the demand in most ~~of our impacted businesses.~~markets remains uncertain.

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, 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 ~~second~~third quarter of 2020, revenue was ~~$1.5~~$1.7 billion, which decreased ~~$311.5~~$77.1 million, or ~~17.2%~~4.2%, as compared to the ~~second~~third quarter of 2019. This was driven by an organic revenue decline of ~~16.0%, an unfavorable impact from foreign currency translation of 1.2%~~5.1% and a ~~0.7%~~0.8% impact due to dispositions. This decline was partially offset by acquisition-related revenue growth of 1.0% and a favorable impact from foreign currency translation of 0.7%.

The ~~16.0%~~5.1% organic revenue decline compared to the ~~second~~third quarter of 2019 was broad-based across our segments, with the exception of our Refrigeration & Food Equipment segment. The organic revenue decline was due to ~~the slowing~~continued demand ~~environment~~softness in many of our end-markets driven by the global response to the outbreak of COVID-19. The Refrigeration & Food Equipment segment ~~exp~~posted~~erienced~~ organic revenue ~~decline~~growth of ~~20.2% on weaker~~2.6% primarily driven by improved activity in food retail and notable growth in demand for can making machinery, however demand for commercial foodservice equipment ~~and postponement~~remained weak. The Engineered Products segment had an organic revenue decline of ~~store remodels and shipments~~10.4% primarily as a result of weaker demand in ~~food retail, while the heat exchanger~~ ~~business~~our waste handling

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business compared to recognizing all-time highest revenue in the third quarter last year, as well as continued softness in our industrial winch and hoist and industrial automation businesses, while our aerospace & defense business showed ~~relative resilience.~~continued resilience and our vehicle service business revenues returned to levels slightly below those in the third quarter of last year. The ~~Engineered Products~~Imaging & Identification segment ~~had~~experienced a decline in organic revenue of ~~20.1%~~7.6% primarily ~~as a result of significantly weaker demand~~driven by continued softness in the textile digital printing market caused by the continued global disruption in the apparel and fashion markets related to COVID-19, while our ~~vehicle service, industrial automation~~marking and ~~fluid dispensing businesses, while aerospace & defense and waste handling showed relative resilience~~coding business was approximately in line with the prior year. . The Fueling Solutions segment ~~saw a decline in~~had an organic revenue declineof ~~14.8%~~7.9% driven by slowing demand in retail fueling markets in ~~Europe~~Asia and ~~Asia,~~Europe as well as weaker activity in the transportation and vehicle wash markets, partially offset by strong activity in North America driven by Europay, Mastercard, and Visa ("EMV") activity in the North America fueling industry. The Imaging & Identification segment experienced a decline in organic revenue of 14.0% primarily driven by a significant slowdown in the textile digital printing market caused by global disruption in the apparel and fashion markets, while marking and coding showed relative resilience.compliance. The Pumps & P~~rocess~~Process Solutions segment had ~~a decline in~~an organic revenue decline of ~~8.8%~~0.9% as a result of ~~slowing demand~~continued softness in ~~the oil & gas~~compression components and ~~general~~aftermarket, and industrial pump end-markets, ~~partially~~almost fully offset by strong ~~growth~~performance in the biopharma and hygienic ~~markets.~~markets as well as strong shipments in our plastics and polymer processing business.

From a geographic perspective, in the ~~second~~third quarter, organic revenue for the U.S., our largest market, declined ~~10%~~4%, while organic revenue in Europe and Asia declined ~~19%~~4% and ~~14%~~10%, respectively, year over year. Organic revenue in all other geographic markets declined ~~33%~~5%. ~~Four~~Three out of our five segments experienced declines in U.S. organic sales, while ~~the Fueling Solutions segment grew on the basis of continued demand for~~ ~~EMV-compliant above-ground retail fueling equipment. The decline in Europe~~organic sales in the ~~second quarter was broad-based across all segments as~~Refrigeration & Food Equipment grew 8%and the ~~region faced significant operational~~Imaging & Identification segment remained flat. Operational and demand headwinds from the COVID-19 ~~pandemic.~~pandemic led to a decline in Europe for four of our five segments, while the Pumps & Process Solutions segment grew on robust activity across all businesses. The decline in Asia was driven mainly by ~~weak activity~~a reduction in ~~India where the lockdown in response to COVID-19 has been broad and prolonged, as well as~~ China where our Fueling Solutions segment, our second largest business in China, faced significant headwinds due to the expiration of the government's double-wall upgrade mandate that drove significant activity in prior years, as well as continued weak demand from the ~~major~~ national oil companies. ~~Three out of our five segments did return to growth in China in the second quarter.~~

Bookings were ~~$1.4~~$1.8 billion for the three months ended ~~June~~September 30, 2020,, a decrease of ~~$402.6~~$10.0 million, or 0.5% compared to the prior year comparable period. Included in this result was organic decline of ~~20.6%, an unfavorable impact from foreign currency translation of 1.7%~~1.1% and a 0.6% impact due to dispositions, partially offset by acquisition-related bookings growth of ~~0.7%~~0.8% and a favorable impact from foreign currency translation of 0.4%. ~~The decline~~Bookings declined organically in ~~organic bookings was broad-based across our~~four segments primarily as a result of the global impact on customer demand from the COVID-19 ~~pandemic. Bookings have improved sequentially~~pandemic, and increased in ~~June 2020, which may indicate recovering demand, but remained subdued~~our Refrigeration & Food Equipment on ~~a year-over-year basis across~~the back of positive trends, most ~~of our businesses.~~ significantly in can shaping, as well as food retail and heat exchanger markets. Backlog as of ~~June~~September 30, 2020 was ~~$1.5~~$1.6 billion, an increase from $1.4 billion from the prior year. See definition of bookings and backlog within "Segment Results of Operations".

During the three months ended ~~June~~September 30, 2020, we acquired ~~Em-tec GmbH~~Solaris Laser S.A. ("~~Em-tec"~~Solaris") for a purchase price of ~~$30.4~~$18.6 million, net of cash acquired. ~~Em-tec is~~The Solaris acquisition enhances our Imaging & Identification segment's growing laser technology product line and further strengthens its position as a leading ~~designer~~provider of marking and ~~manufacturer of flow measurement devices that serve a wide array of medical~~coding equipment and ~~biopharmaceutical applications and will strengthen the portfolio of our Pumps & Process Solutions segment, particularly in the biopharma end-market.~~solutions.

Rightsizing charges of $5.8 million included restructuring costs of ~~$12.3~~$6.7 million ~~and~~less other ~~costs~~benefits of ~~$4.6~~$0.9 million for the three months ended ~~June~~September 30, 2020. Restructuring expense was comprised primarily of new actions taken in response to lower demand driven by COVID-19 and continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint consolidation, and operational optimization and IT centralization. These restructuring charges were broad-based across all segments as well as corporate. Other ~~costs~~benefits were comprised primarily of ~~charges related to the restructuring actions and~~ a ~~$3.6~~$1.7 million ~~write-off~~gain on sale of assets in our Refrigeration & Food Equipment ~~segment.~~segment as a result of restructuring actions and partially offset by charges related to the restructuring actions.

COVID-19 Update

~~Over the past few months, the~~The COVID-19 pandemic has disrupted the global economy and adversely impacted our business, including demand for our products across multiple end-markets as well as our supply chain and operations. We ~~expect the unfavorable impact will continue in the second half of 2020 as general business and economic uncertainty persists and puts pressure on the level of global business investment.~~ ~~Travel and other restrictions put in place globally in response to the pandemic~~ have impacted operations of our customers and suppliers, as well as the ability of our staff to deliver certain services to our customers. While travel restrictions and lockdown measures around the world are being reduced, the levels ofexperienced sequentially improving activity in ~~our~~most markets ~~remain~~and geographies, however demand remains subdued ~~relative~~compared to ~~average~~ historical ~~levels~~averages across multiple markets and we expect ~~continued impact~~such softness to continue into the fourth quarter. The public health situation, global response measures and corresponding impacts on various markets remain fluid and uncertain and may lead to sudden changes in ~~the second half of 2020, albeit continuing a gradual improving~~ trajectory ~~that began at the end of the second quarter.~~and outlook.

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~~Our foremost focus has been on~~During the ~~health and safety of our employees, business partners and customers. Beginning late in the first quarter and continuing into the second~~third quarter, we have ~~operated~~continued to operate in accordance with established health and safety protocols across our facilities ~~and have instituted~~while maintaining an enhanced health and safety compliance program. More specifically, we have modified practices at our manufacturing locations and offices to adhere to guidance from the U.S. Centers for Disease Control and Prevention and local health and governmental authorities in our global network with respect to social distancing, physical separation, ~~and~~ personal protective equipment and sanitization, and have restricted the number of employees permitted in common areas at any given time. ~~Further, we enhanced~~These processes have been institutionalized as a formal part of our operational excellence model, ~~with robust processes and practices~~including audits to ~~promote a clean and sanitary working environment, socially distanced operations where possible and a culture~~sustain our practices. We are pleased to report that as of care and responsibility. These practices and processes include procedures for dealing with confirmed COVID-19 cases, compliance auditing, use of personal protective equipment, access control and other protective measures, and manufacturing line and operational interface re-design.

We consider our companies to be essential suppliers to our customers and business partners as we provide products and services on which our customers and broader society rely upon daily to support crucial functions. Therefore most of our U.S. and global facilities have remained substantially operational during the outbreak with enhanced safety protocols to protect the well-being of our employees. Over the course of the second quarter, approximately 85%September 30, 2020 all of our major global facilities (by count) remained fully operational throughout the entire quarter. Certain facilities were either partially or fully closed due to government mandates or in response to pandemic-related reduced demand in certain end-markets such as the commercial refrigeration, vehicle service and apparel and textile printing markets. We have experienced the most prolonged operational restrictions in India, Malaysia, Brazil and Italy, all countries where we have a relatively immaterial manufacturing footprint (except Italy, where we have significant presence in our Imaging & Identification, Engineered Products and Pumps & Process Solutions segments). As of June 30, 2020, approximately 97% of our major global facilities were fullyare operational.

In order to help mitigate the negative financial impact caused by the pandemic, we have executed and will continue to execute a number of temporary cost savings measures across the portfolio and at our corporate center including ~~employee furloughs,~~short-term labor actions, adjustments to variable compensation to reflect current conditions, utilization of governmental job retention subsidies, elimination of non-essential travel and reduction of discretionary spend. We have also significantly reduced our capital spending plan for the year, without deferring strategic ongoing initiatives. In addition, we initiated restructuring actions to drive longer-term cost savings and are proactively managing our working capital.

~~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, we borrowed $500 million under our $1 billion revolving credit facility. We subsequently paid off the $500 million using proceeds from commercial paper in the second quarter as volatility in the commercial paper market stabilized and we have resumed borrowing commercial paper. In the spirit of prudent liquidity management, even though we have no long-term debt maturities until 2025, on May 6, 2020 we also entered into a $450.0 million 364-day revolving credit facility which expires on May 5, 2021. We have not drawn down any amounts under this facility. See "Financial Condition - Capitalization" for further discussion.

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~~continue to be 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.

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CONSOLIDATED RESULTS OF OPERATIONS


		Three Months Ended June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands, except per share data)	(dollars in thousands, except per share data)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands, except per share data)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	1,499,175		$	1,810,706		(17.2)	%	$	3,155,114		$	3,535,463		(10.8)	%	Revenue	$	1,748,256		$	1,825,345		(4.2)	%	$	4,903,370		$	5,360,808		(8.5)	%
Cost of goods and services	Cost of goods and services	947,577			1,138,113			(16.7)	%	1,991,273			2,239,328			(11.1)	%	Cost of goods and services	1,089,527			1,151,857			(5.4)	%	3,080,800			3,391,185			(9.2)	%
Gross profit	Gross profit	551,598			672,593			(18.0)	%	1,163,841			1,296,135			(10.2)	%	Gross profit	658,729			673,488			(2.2)	%	1,822,570			1,969,623			(7.5)	%
Gross profit margin	Gross profit margin	36.8		%	37.1		%	(0.3)		36.9		%	36.7		%	0.2		Gross profit margin	37.7		%	36.9		%	0.8		37.2		%	36.7		%	0.5

Selling, general and administrative expenses	Selling, general and administrative expenses	366,740			396,634			(7.5)	%	753,681			805,100			(6.4)	%	Selling, general and administrative expenses	381,831			390,775			(2.3)	%	1,135,512			1,195,875			(5.0)	%
Selling, general and administrative expenses as a percent of revenue	Selling, general and administrative expenses as a percent of revenue	24.5		%	21.9		%	2.6		23.9		%	22.8		%	1.1		Selling, general and administrative expenses as a percent of revenue	21.8		%	21.4		%	0.4		23.2		%	22.3		%	0.9
Loss on assets held for sale	Loss on assets held for sale	—			—			nm*		—			46,946			nm*		Loss on assets held for sale	—			—			nm*		—			46,946			nm*
Operating earnings	Operating earnings	184,858			275,959					410,160			444,089					Operating earnings	276,898			282,713					687,058			726,802
Interest expense	Interest expense	28,711			31,754			(9.6)	%	55,979			63,562			(11.9)	%	Interest expense	27,724			31,410			(11.7)	%	83,703			94,972			(11.9)	%
Interest income	Interest income	(728)			(945)			(23.0)	%	(1,911)			(1,835)			4.1	%	Interest income	(960)			(1,263)			(24.0)	%	(2,871)			(3,098)			(7.3)	%
Gain on sale of a business		781			—			nm*		(5,770)			—			nm*
Loss (gain) on sale of a business																		Loss (gain) on sale of a business	557			—			nm*		(5,213)			—			nm*
Other income, net	Other income, net	(735)			(4,589)			nm*		(8,467)			(5,695)			nm*		Other income, net	(1,420)			(5,364)			nm*		(9,887)			(11,059)			nm*
Earnings before provision for income taxes	Earnings before provision for income taxes	156,829			249,739			(37.2)	%	370,329			388,057			(4.6)	%	Earnings before provision for income taxes	250,997			257,930			(2.7)	%	621,326			645,987			(3.8)	%
Provision for income taxes	Provision for income taxes	32,063			51,654			(37.9)	%	69,284			84,267			(17.8)	%	Provision for income taxes	50,697			51,924			(2.4)	%	119,981			136,191			(11.9)	%
Effective tax rate	Effective tax rate	20.4		%	20.7		%	(0.3)		18.7		%	21.7		%	(3.0)		Effective tax rate	20.2		%	20.1		%	0.1		19.3		%	21.1		%	(1.8)

Net earnings	Net earnings	124,766			198,085			(37.0)	%	301,045			303,790			(0.9)	%	Net earnings	200,300			206,006			(2.8)	%	501,345			509,796			(1.7)	%

Net earnings per common share - diluted	Net earnings per common share - diluted	$	0.86		$	1.35		(36.3)	%	$	2.07		$	2.07		—	%	Net earnings per common share - diluted	$	1.38		$	1.40		(1.4)	%	$	3.45		$	3.47		(0.6)	%

* nm - not meaningful

Revenue

Revenue for the three months ended ~~June~~September 30, 2020 decreased ~~$311.5~~$77.1 million, or ~~17.2%~~4.2%, from the prior year comparable ~~period.~~quarter. Results included an organic revenue decline of ~~16.0% across all our segments~~5.1% primarily due to ~~the adverse impact of COVID-19 on~~lower sales volumes due to pandemic-related slowness in our ~~global operations resulting in lower volume and demand.~~markets. Acquisition-related revenue growth of ~~0.7%~~1.0%, led by our Imaging & Identification and Pumps & Process Solutions segments, ~~was more than offset by an unfavorable~~along with a favorable impact from foreign currency translation of ~~1.2% and~~0.7% was partially offset by a ~~0.7%~~0.8% impact from a disposition within the Refrigeration & Food Equipment segment. Customer pricing favorably impacted revenue by approximately ~~0.8%~~0.5% in the ~~second~~third quarter of 2020.

Revenue for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~$380.3~~$457.4 million, or ~~10.8%~~8.5%, from the prior year comparable period. The decrease primarily reflects an organic revenue decline of ~~9.5%~~8.0% across all our segments due to the adverse impact of COVID-19. Acquisition-related growth was 0.8% led by our Imaging & Identification and Pumps & Process Solutions segments. This growth was more than offset by an unfavorable impact from foreign currency translation of ~~1.4%~~0.6% and a 0.7% impact from dispositions within the Refrigeration & Food Equipment and Pumps & Process Solutions ~~and Refrigeration & Food Equipment~~ segments. Customer pricing favorably impacted revenue by approximately ~~0.7%~~0.6% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Gross Profit

Gross profit for the three months ended ~~June~~September 30, 2020 decreased ~~$121.0~~$14.8 million, or ~~18.0%~~2.2% from the prior year comparable ~~period and gross profit margin decreased 30 basis points to 36.8%,~~quarter, primarily due to organic revenue declines, ~~of 16.0%,~~ increased material and inflation costs ~~under-absorption of production fixed overhead~~ and higher restructuring costs, partially offset by favorable business mix, pricing initiatives, benefits from productivity initiatives, restructuring and cost containment actions, including ~~adjusting~~adjustments to direct and indirect manufacturing costs to current demand levels and short-term actions to reduce labor ~~costs such as furloughs.~~costs. Gross profit margin increased 80 basis points to 37.7%, due to benefits from productivity initiatives and restructuring and cost containment actions.

Gross profit for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~$132.3~~$147.1 million, or ~~10.2%~~7.5%, from the prior year comparable period, primarily due to an organic revenue ~~decline of 9.5%,~~declines, increased material and inflation costs and higher restructuring costs, ~~partially offset~~

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partially offset by productivity initiatives and restructuring and cost containment actions. Gross profit margin increased by 2050 basis points to 37.2% for the ~~six~~nine months ended ~~June~~September 30, 2020 from the comparable period primarily due to benefits from productivity initiatives and restructuring and cost containment actions. We are managing production at our operating ~~plants'~~plants aggressively to match demand.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended ~~June~~September 30, 2020 decreased ~~$29.9~~$8.9 million, or ~~7.5%~~2.3%, from the prior year comparable ~~period,~~quarter, primarily due to ~~significant~~continued cost reduction actions to offset revenue declines, including a reduction in discretionary spend and adjustments to variable compensation to reflect current conditions, and benefits from rightsizing actions. As a percentage of revenue, selling, general and administrative expenses increased ~~260~~40 basis points to ~~24.5%~~21.8% due to the decline in revenue base. As we continue to ~~monitor~~respond to the impact of COVID-19, we expect ~~the third quarter to require continued actions such as further reducing~~sustained reductions in discretionary spend and headcount to match demand.

Selling, general and administrative expenses for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~$51.4~~$60.4 million, or ~~6.4%~~5.0%, from the prior year comparable period, primarily due to a reduction in discretionary spend and benefits from rightsizing actions, partially offset by higher restructuring charges and a write-off of assets. Selling, general and administrative expenses as a percentage of revenue increased ~~110~~90 basis points as compared to the prior year comparable period reflecting the decrease in revenue base.

Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to ~~$34.8~~$36.4 million and ~~$35.2~~$32.1 million for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and ~~$70.3~~$106.7 million and ~~$69.9~~$102.0 million, for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively. These costs as a percent of revenue were ~~2.3%~~2.1% and ~~1.9%~~1.8% for the three months ended ~~June~~September 30, 2020 and 2019, respectively, and 2.2% and ~~2.0%~~1.9% for the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, respectively.

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 approximately $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. The 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 Chino, California branch of The AMS Group ("AMS Chino") within the Refrigeration & Food Equipment segment for total ~~cash proceeds of $16.9 million, of which a $1.5 million working capital adjustment was recognized in the second quarter and will be paid in the third quarter, for a net~~ consideration of $15.4 ~~million.~~million which included a working capital adjustment. A gain of ~~$5.8~~$5.2 million was 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 and nine months ended ~~June~~September 30, 2020 decreased $3.9 million and $1.2 million respectively from prior year comparable periods primarily due to foreign exchange losses ~~from the remeasurement of foreign currency denominated balances and decreased earnings from our equity method investments.~~

~~Other income, net for the six months ended June 30, 2020 increased $2.8 million primarily due to foreign exchange gains~~ from the remeasurement of foreign currency denominated balances.

Income Taxes

The effective tax rates for the three months ended ~~June~~September 30, 2020 and 2019 were ~~20.4%~~20.2% and ~~20.7%~~20.1%, respectively. The increase in the effective tax rate for the three months ended September 30, 2020 relative to the prior year comparable quarter was primarily driven by discrete items.

The effective tax rates for the nine months ended September 30, 2020 and 2019 were 19.3% and 21.1%, respectively. The decrease in the effective tax rate for the ~~three~~nine months ended ~~June~~September 30, 2020 relative to the prior year comparable period was ~~primarily driven by favorable audit settlements.~~

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The effective tax rates for the six months ended June 30, 2020 and 2019 were 18.7% and 21.7%, respectively. The decrease in the effective tax rate for the six months ended June 30, 2020 relative to the prior comparable period is primarily driven by the ~~favorable audit settlements and the impact of the~~ exclusion of capital ~~loss~~losses on the sale of Finder under local law in ~~2019.~~the prior year, partially offset by the impact of other discrete tax items.

Net earnings

Net earnings for the three months ended ~~June~~September 30, 2020 decreased ~~37.0%~~2.8% to ~~$124.8~~$200.3 million, or ~~$0.86~~$1.38 diluted earnings per share, from ~~$198.1~~$206.0 million, or ~~$1.35~~$1.40 diluted earnings per share, from the prior year comparable ~~period.~~quarter. The decrease in net earnings was mainly attributable to reduced volume due to the impact of COVID-19, increased material and inflation costs and higher restructuring costs. The reduction was partially offset by broad-based cost containment actions and benefits from productivity and restructuring actions.

Net earnings for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~0.9%~~1.7% to ~~$301.0~~$501.3 million, or ~~$2.07~~$3.45 diluted earnings per share, from ~~$303.8~~$509.8 million, or ~~$2.07~~$3.47 diluted earnings per share, from the prior year comparable period. The decrease in net earnings was primarily due to the impact of COVID-19, increased material and inflation costs, and higher restructuring costs. The decrease in net earnings was partially offset by broad-based cost containment actions, benefits from productivity and restructuring actions, and a loss on assets held for sale of $46.9 million in the prior period.

Rightsizing Activities, which includes Restructuring and Other Costs

During the three and ~~six~~nine months ended ~~June~~September 30, 2020, rightsizing activities included restructuring charges of ~~$12.3~~$6.7 million and ~~$19.6~~$26.4 million, respectively, and other benefits of $0.9 million and costs of ~~$4.6 million and $5.1~~$4.2 million, respectively. Restructuring expense was comprised primarily of new actions taken in response to lower demand driven by COVID-19 ~~and~~as well as continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint consolidation and operational optimization and IT centralization. Other costs ~~were~~and benefits comprised primarily of charges related to the restructuring actions ~~and~~offset by a ~~$3.6~~$1.7 million ~~write-off~~gain on sale of ~~assets.~~assets in our Refrigeration & Food Equipment segment as a result of 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. 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 and ~~six~~nine months ended ~~June~~September 30, 2020:


		Three Months Ended June 30, 2020																											Three Months Ended September 30, 2020
(dollars in thousands)	(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total		(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	Restructuring (GAAP)	$	4,160	$	911	$	(522)	$	4,706	$	2,213	$	816	$	12,284	Restructuring (GAAP)	$	2,342	$	1,572	$	99	$	1,719	$	534	$	474	$	6,740
Other costs, net		9		(43)		(5)		(15)		3,803		807		4,556
Other costs (benefits), net																Other costs (benefits), net	33		43		—		52		(1,505)		485		(892)
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	4,169	$	868	$	(527)	$	4,691	$	6,016	$	1,623	$	16,840	Rightsizing (Non-GAAP)	$	2,375	$	1,615	$	99	$	1,771	$	(971)	$	959	$	5,848


		Six Months Ended June 30, 2020																											Nine Months Ended September 30, 2020
(dollars in thousands)	(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total		(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	Restructuring (GAAP)	$	4,518	$	2,386	$	(266)	$	8,552	$	2,773	$	1,662	$	19,625	Restructuring (GAAP)	$	6,860	$	3,958	$	(167)	$	10,271	$	3,307	$	2,136	$	26,365
Other costs, net	Other costs, net	12		(25)		3		(15)		3,947		1,152		5,074		Other costs, net	45		18		3		37		2,442		1,637		4,182
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	4,530	$	2,361	$	(263)	$	8,537	$	6,720	$	2,814	$	24,699	Rightsizing (Non-GAAP)	$	6,905	$	3,976	$	(164)	$	10,308	$	5,749	$	3,773	$	30,547

During the three and ~~six~~nine months ended ~~June~~September 30, 2019, rightsizing activities included restructuring charges of ~~$5.7~~$3.3 million and ~~$8.7~~$12.0 million, respectively, and other costs of ~~$0.7~~$0.5 million and ~~$1.7~~$2.2 million, respectively. Restructuring expense ~~was related to~~

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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 and ~~six~~nine months ended ~~June~~September 30, 2019:


		Three Months Ended June 30, 2019																											Three Months Ended September 30, 2019
(dollars in thousands)	(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total		(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	Restructuring (GAAP)	$	1,122	$	1,776	$	1,386	$	501	$	227	$	726	$	5,738	Restructuring (GAAP)	$	556	$	825	$	296	$	907	$	495	$	257	$	3,336
Other costs, net		3		(8)		(118)		402		439		—		718
Other costs (benefits), net																Other costs (benefits), net	34		(14)		5		36		345		65		471
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	1,125	$	1,768	$	1,268	$	903	$	666	$	726	$	6,456	Rightsizing (Non-GAAP)	$	590	$	811	$	301	$	943	$	840	$	322	$	3,807


		Six Months Ended June 30, 2019																											Nine Months Ended September 30, 2019
(dollars in thousands)	(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total		(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	Restructuring (GAAP)	$	1,201	$	2,514	$	1,677	$	882	$	1,639	$	761	$	8,674	Restructuring (GAAP)	$	1,757	$	3,339	$	1,973	$	1,789	$	2,134	$	1,018	$	12,010
Other costs, net		4		6		(20)		435		1,320		—		1,745
Other costs (benefits), net																Other costs (benefits), net	38		(8)		(15)		471		1,666		65		2,217
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	1,205	$	2,520	$	1,657	$	1,317	$	2,959	$	761	$	10,419	Rightsizing (Non-GAAP)	$	1,795	$	3,331	$	1,958	$	2,260	$	3,800	$	1,083	$	14,227

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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 to our consolidated revenue and net 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 June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	342,380		$	429,928		(20.4)	%	$	750,540		$	848,779		(11.6)	%	Revenue	$	386,562		$	426,689		(9.4)	%	$	1,137,102		$	1,275,468		(10.8)	%

Segment earnings (EBIT)	Segment earnings (EBIT)	$	47,702		$	77,129		(38.2)	%	$	116,796		$	144,248		(19.0)	%	Segment earnings (EBIT)	$	64,890		$	74,367		(12.7)	%	$	181,686		$	218,615		(16.9)	%
Depreciation and amortization	Depreciation and amortization	9,722			10,452			(7.0)	%	19,844			20,811			(4.6)	%	Depreciation and amortization	10,717			10,095			6.2	%	30,561			30,906			(1.1)	%
Segment EBITDA	Segment EBITDA	$	57,424		$	87,581		(34.4)	%	$	136,640		$	165,059		(17.2)	%	Segment EBITDA	$	75,607		$	84,462		(10.5)	%	$	212,247		$	249,521		(14.9)	%

Segment margin	Segment margin	13.9		%	17.9		%			15.6		%	17.0		%			Segment margin	16.8		%	17.4		%			16.0		%	17.1		%
Segment EBITDA margin	Segment EBITDA margin	16.8		%	20.4		%			18.2		%	19.4		%			Segment EBITDA margin	19.6		%	19.8		%			18.7		%	19.6		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	278,373		$	397,420		(30.0)	%	$	693,345		$	825,117		(16.0)	%	Bookings	$	381,139		$	426,059		(10.5)	%	$	1,074,484		$	1,251,176		(14.1)	%
Backlog	Backlog									$	378,874		$	418,154		(9.4)	%	Backlog									$	373,458		$	416,025		(10.2)	%

Components of revenue decline:	Components of revenue decline:																			Components of revenue decline:
Organic decline	Organic decline							(20.1)	%							(11.1)	%	Organic decline							(10.4)	%							(10.9)	%
Acquisitions	Acquisitions							0.2	%							0.2	%	Acquisitions							0.3	%							0.2	%

Foreign currency translation	Foreign currency translation							(0.5)	%							(0.7)	%	Foreign currency translation							0.7	%							(0.1)	%
								(20.4)	%							(11.6)	%								(9.4)	%							(10.8)	%

~~Second~~

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Third Quarter 2020 Compared to the ~~Second~~Third Quarter 2019

Engineered Products segment revenue for the ~~second~~third quarter of 2020 decreased ~~$87.5~~$40.1 million, or ~~20.4%~~9.4%, as compared to the ~~second~~third quarter of 2019, comprised of organic decline of ~~20.1% and an unfavorable~~10.4%, partially offset by a favorable impact from foreign currency translation of ~~0.5%, partially offset by~~0.7% and acquisition-related growth of ~~0.2%~~0.3%. Acquisition-related growth was driven by the acquisition of So. Cal. Soft-Pak ~~"Soft-Pak"~~("Soft-Pak"). Customer pricing ~~did not have a significant impact on~~favorably impacted revenue by approximately 0.5% in the ~~second~~third quarter of 2020.

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The organic revenue decline was primarily driven by the global economic downturn precipitated by the COVID-19 pandemic. ~~This~~The impact ~~was~~continued to be broad-based, ~~across our businesses in the Engineered Products segment,~~ with the most significant impacts in the third quarter experienced in ~~vehicle service,~~our waste handling, industrial winch and hoist, industrial automation and fluid ~~dispensing. Our industrial winch and hoist businesses also experienced decreases in customer demand due to COVID-19 as well as challenging conditions in several end-markets. Our~~dispensing businesses. In waste handling ~~business showed relatively resilient revenue trajectory with a modest decline as the business shipped goods against its significant backlog of orders, as well as~~we continued ~~growth in adoption of our Connected Collection digital solutions. New~~to experience headwinds on new order activity ~~in waste handling saw headwinds~~ in the quarter as waste haulers and municipalities reduced current year capital budgets to preserve cash flow, and orders for compaction and recycling solutions ~~slowed as retail outlets~~ remained ~~closed for~~below prior year levels; the comparison is further challenged since our waste handling business recorded all-time highest revenue in the third quarter of 2019. Although headwinds from the COVID-19 pandemic remain across the majority of our businesses, sequential activity improved from the second quarter to the third quarter in a number of businesses, most notably in our vehicle service and industrial automation businesses. Our vehicle service business revenues in particular returned to a level that was only slightly below those experienced in the third quarter of ~~the quarter.~~last year. Our aerospace & defense business also demonstrated continued resilience, posting ~~approximately flat~~strong year over year revenue growth in the quarter on the back of a strong backlog of orders from defense customers.

WeWhile we experienced improvements in the third quarter in several businesses, we expect the global COVID-19 pandemic to continue to impact demand for capital equipment and segment results infor the ~~third quarter~~remainder of the year as demand headwinds across our businesses persist, and as a result, we ~~have undertaken~~continue to focus on initiatives ~~to adjust~~that align the cost structures of our businesses ~~to align~~ with near-term demand. However, we have begun to see improvement in market conditions across much of the segment and expect results to improve sequentially from the second quarter to the second half of 2020. Additionally,demand levels. Despite those near-term demand headwinds, we expect that demand for our products will continue its long term favorable growth trend, and believe the fundamental long term demand drivers across our end-markets remain constructive.

Engineered Products segment earnings decreased ~~$29.4~~$9.5 million, or ~~38.2%~~12.7%, compared to the ~~second~~third quarter of 2019 ~~which had the highest margin performance of 2019.~~ . The decrease was primarily driven by the continued impact of ~~widespread government actions to contain~~ the ~~spread of~~ COVID-19 pandemic on customer spending. This was partially offset by ~~the significant~~ cost containment initiatives we executed in the second quarter. These initiatives include actions to adjust direct and indirect manufacturing costs 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 businesses, and a detailed review and re-prioritization of all planned investments and hiring plans. These actions will ~~continue into the third quarter and~~ remain in place until ~~we see~~ sustained improvements in near-term ~~demand.~~demand are realized. Segment operating margin decreased ~~400~~60 basis points to ~~13.9%~~16.8% from ~~17.9%~~17.4% as compared to the prior year quarter.

Bookings decreased ~~30.0%~~10.5% for the segment, comprised of an organic decline of ~~29.8%~~11.6%, ~~an unfavorable~~partially offset by a favorable impact from foreign currency of ~~0.5%, partially offset by~~0.7% and acquisition-related growth of ~~0.3%~~0.4%. ~~The~~The organic bookings decline was broad-based and primarily driven by the global impact on customer demand of the COVID-19 pandemic. Segment book-to-bill was ~~0.81.~~0.99. Backlog decreased ~~9.4%~~10.2% compared to the prior year quarter.

~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2019

Engineered Products revenue for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~$98.2~~$138.4 million, or ~~11.6%~~10.8%, compared to the prior year comparable period. This was comprised of organic revenue decline of ~~11.1%~~10.9% and an unfavorable impact from foreign currency translation of ~~0.7%~~0.1%, partially offset by acquisition-related growth of 0.2%. The organic revenue decline was primarily driven by the broad-based impact to customer spending of the global economic downturn precipitated by the COVID-19 pandemic. The impact began in the first quarter with government mandated shutdowns in China and Italy impacting our vehicle service business as well as a voluntary shutdown in the U.S. of a facility serving the automotive original equipment manufacturer ("OEM") market. ~~Demand headwinds continued into~~The impact then became more broad-based in the early part of the second quarter, before experiencing sequential improvements toward the end of the second quarter and through the third quarter. Despite improving conditions, demand headwinds persisted in the third quarter. Customer pricing ~~did not have a significant impact on~~favorably impacted revenue by approximately 0.3% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Segment earnings for the ~~six~~nine months ended ~~June~~September 30, 2020 decreased ~~$27.5~~$36.9 million, or ~~19.0%~~16.9%, as compared to the 2019 comparable period. This decrease was primarily driven by the earnings impact from lower revenues due to the global COVID-19 pandemic,, partially offset by significant cost reduction initiatives. Segment margin decreased from ~~17.0%~~17.1% to ~~15.6%~~16.0% as compared to the prior year comparable period.

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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 June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	326,495		$	390,586		(16.4)	%	$	686,477		$	763,636		(10.1)	%	Revenue	$	380,511		$	411,769		(7.6)	%	$	1,066,988		$	1,175,405		(9.2)	%

Segment earnings	Segment earnings	$	47,214		$	52,637		(10.3)	%	$	100,712		$	89,867		12.1	%	Segment earnings	$	66,601		$	68,069		(2.2)	%	$	167,313		$	157,936		5.9	%
Depreciation and amortization	Depreciation and amortization	17,968			18,945			(5.2)	%	36,307			36,824			(1.4)	%	Depreciation and amortization	18,014			18,744			(3.9)	%	54,321			55,568			(2.2)	%
Segment EBITDA	Segment EBITDA	$	65,182		$	71,582		(8.9)	%	$	137,019		$	126,691		8.2	%	Segment EBITDA	$	84,615		$	86,813		(2.5)	%	$	221,634		$	213,504		3.8	%

Segment margin	Segment margin	14.5		%	13.5		%			14.7		%	11.8		%			Segment margin	17.5		%	16.5		%			15.7		%	13.4		%
Segment EBITDA margin	Segment EBITDA margin	20.0		%	18.3		%			20.0		%	16.6		%			Segment EBITDA margin	22.2		%	21.1		%			20.8		%	18.2		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	311,498		$	394,256		(21.0)	%	$	684,568		$	737,339		(7.2)	%	Bookings	$	383,902		$	450,727		(14.8)	%	$	1,068,470		$	1,188,066		(10.1)	%
Backlog	Backlog									$	199,305		$	186,202		7.0	%	Backlog									$	204,574		$	223,081		(8.3)	%

Components of revenue decline:	Components of revenue decline:																	Components of revenue decline:
Organic decline	Organic decline							(14.8)	%							(8.9)	%	Organic decline							(7.9)	%							(8.5)	%
Acquisitions	Acquisitions							—	%							0.4	%	Acquisitions							—	%							0.3	%

Foreign currency translation	Foreign currency translation							(1.6)	%							(1.6)	%	Foreign currency translation							0.3	%							(1.0)	%
								(16.4)	%							(10.1)	%								(7.6)	%							(9.2)	%

~~Second~~Third Quarter 2020 Compared to the ~~Second~~Third Quarter 2019

Fueling Solutions segment revenue for the ~~second~~third quarter of 2020 decreased ~~$64.1~~$31.3 million, or ~~16.4%~~7.6%, as compared to the third quarter of 2019, comprised of an organic decline of ~~14.8% and an unfavorable~~7.9%, partially offset by a favorable impact from foreign currency translation of ~~1.6%~~0.3%. Customer pricing favorably impacted revenue by approximately ~~1.2%~~0.7% in the ~~second~~third quarter of 2020.

The organic revenue decline was principally due to the continued adverse effects of COVID-19 ~~on Fueling Solutions' global operations as well as the ability of customers~~ and suppliers to operate. Government mandated shutdowns of manufacturing sites in the Asia Pacific region extended through May which affected both production volumes and demand, and have only resumed with limited capacity in June. Retail fueling volumes in China also decreased due to the tapering of ~~activity for government mandated~~government-mandated underground infrastructure ~~conversion upgrades.~~upgrades in China. Demand was also impacted by ~~record declines in global mileage driven and gasoline consumption, as well as by declining oil prices in the second quarter of 2020 and resulting reduction~~reductions in capital budgets of vertically-integrated oil companies, which operate a significant share of fuel retail infrastructure outside the North American market. Additionally, our businesses serving the transportation and vehicle wash markets ~~were also challenged~~faced reduced capital spending by ~~market headwinds~~their customers due to ~~COVID-19-related~~COVID-19 operational disruptions ~~reduction in capital investment due to~~and economic ~~uncertainty and lower oil prices.~~uncertainty. Demand for retail fueling solutions in North America was supported by strong demand and robust orders for EMV-compliant ~~payment~~ equipment which provided ~~some~~a partial offset to the decline in global sales. We expect activity in the retail fueling market to remain subdued inthrough the ~~second half~~end of ~~2020,~~the year, particularly outside of North America.

Fueling Solutions segment earnings decreased ~~$5.4~~$1.5 million, or ~~10.3%~~2.2%, over the prior year comparable quarter. The decrease was predominantly driven by the global impact of COVID-19 which depressed volume and demand. This decline was partially offset by favorable geographic and product mix, ~~pricing initiatives,~~ productivity actions including realized restructuring benefits and selling, general and administrative cost ~~reductions.~~reductions, and pricing initiatives. Segment margin increased ~~100 basis points over~~to 17.5% from 16.5% in the prior year quarter.

Overall bookings decreased ~~21.0%~~14.8% as compared to the prior year comparable quarter, driven by organic decline of ~~18.2%~~14.2% and an unfavorable impact from foreign currency translation of ~~2.8%~~0.6%. Organic bookings decline iswas primarily driven by the global impact on customer demand caused by the COVID-19 pandemic, slower demand from vertically-integrated oil companies and prior year bookings reflected increased orders of underground equipment in China due to government-mandated site infrastructure upgrade activity. This was partially offset by high order trends for EMV equipment in North America. Segment book to bill was ~~0.95.~~1.01. Backlog ~~increased 7.0%~~decreased 8.3% as compared to the prior year comparable quarter primarily as a result of ~~first~~lower second and third quarter bookings.

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~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2019

Fueling Solutions segment revenue decreased ~~$77.2~~$108.4 million, or ~~10.1%~~9.2%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2019, attributable to organic decline of ~~8.9%~~8.5% and an unfavorable impact from foreign currency translation of ~~1.6%~~1.0%, partially offset by acquisition-related growth of ~~0.4%~~0.3%. Organic revenue decline was due to slowing in the retail fueling market in China and other parts of the world outside of North America, as well as slowing in ~~global~~global fluid transfer and tunnel vehicle wash businesses, partially offset by strong EMV activity in the North America fueling industry. The decline was primarily driven by the global adverse impacts triggered by COVID-19 beginning in the middle of the first quarter ~~with government mandated~~and continuing through the third quarter. Government-mandated shutdowns in China, India and Italy ~~affecting~~affected production and ~~demand.~~demand early in the year. Shutdowns continued into May in certain regions. We expect activity in the retail fueling market to remain subdued through the end of the year, particularly outside of North America. Customer pricing favorably impacted revenue by approximately ~~1.4%~~1.1% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Fueling Solutions segment earnings increased ~~$10.8~~$9.4 million, or ~~12.1%~~5.9%, for the ~~six~~nine months ended ~~June~~September 30, 2020. The increase was driven by favorable ~~business~~geographic mix, pricing and productivity initiatives, ~~and~~ selling, general and administrative cost ~~containment.~~containment, and favorable impact from foreign currency translation. These benefits were partially offset by weakened organic ~~volume.~~volume due to COVID-19. Segment margin ~~improved 290~~increased 230 basis points ~~over~~to 15.7% from 13.4% in the prior year comparable period.

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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 June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	227,977		$	266,588		(14.5)	%	$	484,742		$	534,942		(9.4)	%	Revenue	$	265,690		$	275,109		(3.4)	%	$	750,432		$	810,051		(7.4)	%

Segment earnings	Segment earnings	$	38,046		$	54,641		(30.4)	%	$	89,528		$	110,596		(19.0)	%	Segment earnings	$	51,928		$	61,655		(15.8)	%	$	141,456		$	172,251		(17.9)	%
Depreciation and amortization	Depreciation and amortization	9,224			7,413			24.4	%	17,993			14,848			21.2	%	Depreciation and amortization	9,809			7,360			33.3	%	27,802			22,208			25.2	%
Segment EBITDA	Segment EBITDA	$	47,270		$	62,054		(23.8)	%	$	107,521		$	125,444		(14.3)	%	Segment EBITDA	$	61,737		$	69,015		(10.5)	%	$	169,258		$	194,459		(13.0)	%

Segment margin	Segment margin	16.7		%	20.5		%			18.5		%	20.7		%			Segment margin	19.5		%	22.4		%			18.8		%	21.3		%
Segment EBITDA margin	Segment EBITDA margin	20.7		%	23.3		%			22.2		%	23.5		%			Segment EBITDA margin	23.2		%	25.1		%			22.6		%	24.0		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	221,315		$	264,175		(16.2)	%	$	493,919		$	531,937		(7.1)	%	Bookings	$	266,423		$	284,527		(6.4)	%	$	760,342		$	816,464		(6.9)	%
Backlog	Backlog									$	168,904		$	116,810		44.6	%	Backlog									$	171,158		$	121,877		40.4	%

Components of revenue decline:	Components of revenue decline:																	Components of revenue decline:
Organic decline	Organic decline							(14.0)	%							(9.2)	%	Organic decline							(7.6)	%							(8.6)	%
Acquisitions	Acquisitions							3.1	%							3.0	%	Acquisitions							4.3	%							3.4	%

Foreign currency translation	Foreign currency translation							(3.6)	%							(3.2)	%	Foreign currency translation							(0.1)	%							(2.2)	%
								(14.5)	%							(9.4)	%								(3.4)	%							(7.4)	%

~~Second~~Third Quarter 2020 Compared to the ~~Second~~Third Quarter 2019

Imaging & Identification segment revenue for the ~~second~~third quarter of 2020 decreased ~~$38.6~~$9.4 million, or ~~14.5%~~3.4%,as compared to the third quarter of 2019, comprised of an organic decline of ~~14.0%~~7.6% and an unfavorable impact from foreign currency translation of ~~3.6%~~0.1%, partially offset by acquisition-related growth of ~~3.1%~~4.3%. Acquisition-related growth was driven by the acquisition of Sys-Tech Solutions, Inc. ("Systech"). in the first quarter and Solaris, which closed in the third quarter. Customer pricing favorably impacted revenue by approximately ~~1.1%~~0.3% in the ~~second~~third quarter of 2020.

The organic revenue decline was primarily driven by the global economic downturn precipitated by the COVID-19 pandemic. ~~The greatest~~We continued to experience significant unfavorable impact ~~was felt~~ in our digital textile printing ~~business headquartered~~business. Digital textile printing activity has improved throughout the third quarter, driven by demand for home decor and sportswear apparel products, however activity in ~~Italy where the country remained shut down through the first part of the second quarter. While~~fashion and general apparel printing remains slower compared to prior year. This dynamic resulted in improving demand for our ~~digital printing facilities in Italy reopened in May, our operations continued to produce and ship printing equipment~~inks and consumables ~~at substantially reduced capacity as global end-market demand~~that are closely tied to current levels of activity and continued dampening of customers' need and appetite for ~~textiles, including fashion and apparel goods, remained significantly depressed world-wide. Demand for consumables~~investments in ~~our~~new machinery. Our marking and coding business posted approximately flat revenue driven by continued solid demand for consumables, particularly inks for food and beverage, cleaning supplies, pharmaceuticals and medical supplies, ~~remained resilient~~and delayed conversion of a strong pipeline for equipment sales as ~~production of essential goods continued. Also in marking~~customers remain cautious towards capital expenditures and coding, we saw continued delays in order rates for new and replacement capital equipment, software, and services, however, our order pipeline remains robust and customer activity has improved through the second quarter as global economies began to reopen.operational disruption amidst high utilization rates.

We expect ~~to see improvements in market demand in~~the resiliency of our marking and coding business ~~from~~to continue in the ~~second~~fourth quarter, ~~into the second half of 2020,~~ and continue to anticipate a favorable long-term growth trend thereafter, supported by constructive secular trends in demand for product traceability, identification, differentiation, and brand protection solutions. ~~In our~~We expect continued slowness in new orders in the fourth quarter for the digital printing business ~~while~~driven by uncertainty and disruption in the apparel markets, although we ~~continue~~expect the trajectory to improve sequentially based on most recent trends. We believe we ~~are~~also remain favorably positioned ~~long-term~~ to exploit ~~an accelerated~~a longer-term transition from analog to digital printing by our ~~customers, the near-term timing and trajectory of a recovery in the clothing and apparel market remains uncertain.~~customers.

Imaging & Identification segment earnings decreased ~~$16.6~~$9.7 million, or ~~30.4%~~15.8%, over the prior year comparable quarter. This decrease was primarily driven by the impact of ~~widespread government actions to contain the spread of COVID-19 on~~continued reduced consumer spending on clothing, sports apparel, and ~~resulting decline in demand for the~~other textile products that impact our digital ~~textile~~ printing ~~equipment and consumables.~~customers. Partially offsetting this decrease were ~~significant~~continued cost containment initiatives ~~undertaken~~ in the ~~second~~third quarter. These initiatives ~~include~~included actions to adjust direct and indirect manufacturing cost to current

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demand levels, the execution of short-term actions to reduce labor costs, the

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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 have allowed 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 third quarter and remain in place until we see sustained improvements in near-term demand.~~ Segment margin decreased ~~380 basis points over~~to 19.5% from 22.4% in the prior year comparable quarter.

Overall bookings decreased ~~16.2%~~6.4% as compared to the prior year comparable quarter, reflecting an organic decline of ~~16.5%~~9.9% and an unfavorable impact from foreign currency translation of ~~3.5%~~0.2%, partially offset by acquisition-related growth of ~~3.8%~~3.7%. The organic reduction was the result of ~~limited~~a year over year reduction in new orders for equipment and consumables in our digital printing business. Segment book to bill was ~~0.97.~~1.00. Backlog increased ~~44.6%~~40.4% as compared to the prior year quarter driven by the inclusion of backlog from the Systech ~~acquisition,~~and Solaris acquisitions, and sustained bookings for consumables in marking and coding.

~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2019

Imaging & Identification segment revenue decreased ~~$50.2~~$59.6 million, or ~~9.4%~~7.4%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2019, attributable to organic decline of ~~9.2%~~8.6% and an unfavorable impact from foreign currency translation of ~~3.2%~~2.2%, partially offset by acquisition-related growth of ~~3.0%~~3.4%. The organic revenue decline was primarily driven by the impact to consumer spending of the aforementioned global economic downturn precipitated by the COVID-19 ~~pandemic~~. pandemic. This impact began in the first quarter ~~with government mandated shutdowns of manufacturing operations~~and although activity levels started to recover through the second and third quarter, we continue experience reduced activity on a year over year basis, most notably in ~~February affecting our marking and coding 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 and continued into May.~~ business. Customer pricing favorably impacted revenue by approximately ~~0.7%~~0.6% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Imaging & Identification segment earnings decreased ~~$21.1~~$30.8 million, or ~~19.0%~~17.9%, for the ~~six~~nine months ended ~~June~~September 30, ~~2020.~~2020 over the prior year comparable period. The decrease was primarily driven by the earnings impact from lower revenues due to the global COVID-19 pandemic, partially offset by the significant cost reduction initiatives. Segment margin decreased to 18.8% from ~~20.7% to 18.5% as compared to~~21.3% in the prior year comparable ~~period.~~quarter.

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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 June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	309,095		$	338,924		(8.8)	%	$	628,631		$	669,143		(6.1)	%	Revenue	$	347,875		$	341,337		1.9	%	$	976,506		$	1,010,480		(3.4)	%

Segment earnings⁽¹⁾	Segment earnings⁽¹⁾	$	67,702		$	76,278		(11.2)	%	$	133,781		$	91,269		46.6	%	Segment earnings⁽¹⁾	$	89,786		$	77,433		16.0	%	$	223,567		$	168,702		32.5	%
Depreciation and amortization	Depreciation and amortization	17,572			16,201			8.5	%	35,908			33,749			6.4	%	Depreciation and amortization	17,206			16,018			7.4	%	53,114			49,767			6.7	%
Segment EBITDA ⁽¹⁾	Segment EBITDA ⁽¹⁾	$	85,274		$	92,479		(7.8)	%	$	169,689		$	125,018		35.7	%	Segment EBITDA ⁽¹⁾	$	106,992		$	93,451		14.5	%	$	276,681		$	218,469		26.6	%

Segment margin ⁽¹⁾	Segment margin ⁽¹⁾	21.9		%	22.5		%			21.3		%	13.6		%			Segment margin ⁽¹⁾	25.8		%	22.7		%			22.9		%	16.7		%
Segment EBITDA margin ⁽¹⁾	Segment EBITDA margin ⁽¹⁾	27.6		%	27.3		%			27.0		%	18.7		%			Segment EBITDA margin ⁽¹⁾	30.8		%	27.4		%			28.3		%	21.6		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	275,872		$	375,905		(26.6)	%	$	645,275		$	745,706		(13.5)	%	Bookings	$	323,801		$	329,642		(1.8)	%	$	969,076		$	1,075,348		(9.9)	%
Backlog	Backlog									$	379,090		$	378,427		0.2	%	Backlog									$	361,631		$	361,478		—	%

Components of revenue decline:
Components of revenue growth (decline):																		Components of revenue growth (decline):
Organic decline	Organic decline							(8.8)	%							(5.0)	%	Organic decline							(0.9)	%							(3.6)	%
Acquisitions	Acquisitions							1.1	%							1.0	%	Acquisitions							1.3	%							1.1	%
Dispositions	Dispositions							—	%							(0.9)	%	Dispositions							—	%							(0.6)	%
Foreign currency translation	Foreign currency translation							(1.1)	%							(1.2)	%	Foreign currency translation							1.5	%							(0.3)	%
								(8.8)	%							(6.1)	%								1.9	%							(3.4)	%

⁽¹⁾ Segment earnings (EBIT) and segment EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2019 include a $46,946 loss on assets held for sale for Finder.

~~Second~~Third Quarter 2020 Compared to the ~~Second~~Third Quarter 2019

Pumps & Process Solutions segment revenue for the second quarter of 2020 decreased $29.8 million, or 8.8%, comprised of organic decline of 8.8% and an unfavorable impact from foreign currency translation of 1.1%, partially offset by acquisition-related growth of 1.1%. Customer pricing favorably impacted revenue by approximately 0.9% in the second quarter of 2020.

The organic revenue decline was principally driven by the adverse impact of COVID-19 on investment activity in the general industrial space, 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 Pumps & Process Solutions facilities across the globe continued to be subjected to mandatory government shutdowns in Italy, Mexico and India. 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 impact is likely to continue and impact results in the second half of 2020. 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 decreased $8.6~~revenue for the third quarter of 2020 increased $6.5 million, or ~~11.2%~~1.9%, as compared to the third quarter of 2019, comprised of a favorable impact from foreign currency translation of 1.5% and acquisition-related growth of 1.3%, partially offset by organic decline of 0.9%. Acquisition-related growth was driven by the acquisition of Em-tec GmbH ("Em-tec"). Customer pricing favorably impacted revenue by approximately 1.1% in the third quarter of 2020.

The organic revenue decline was principally driven by continued comparable weakness in demand for compression components and aftermarket services due to lower activity in the North American oil & gas sector, as well as continued slower demand for industrial pumps due to pandemic-related disruptions. The decline was almost completely offset by strong performance in the biopharma and hygienic markets, as well as robust demand in specialty pumps for defense applications and strong shipments against a significant backlog in the plastics & polymer processing business. We expect the segment revenue trajectory from the third quarter to directionally continue into the fourth quarter.

Pumps & Process Solutions segment earnings increased $12.4 million, or 16.0%, over the prior year comparable quarter. The ~~decrease~~increase was primarily driven by ~~the global impact of COVID-19 on volume, increased material and inflation costs, and an unfavorable impact from foreign currency translation. This decrease was partially offset by~~strategic pricing initiatives, productivity actions, restructuring benefits, favorable impact from foreign currency translation, and selling, general and administrative cost reductions. The cost reductions include the elimination 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~~This increase was partially offset by unfavorable changes in material and ~~selected furloughs will continue into the third quarter and remain in place until we see improvements in near-term demand.~~inflation costs. Segment margin ~~decreased~~increased to ~~21.9%~~25.8% from ~~22.5%~~22.7% from the prior year comparable quarter.

Overall bookings decreased ~~26.6%~~1.8% as compared to the prior year comparable quarter, reflecting organic decline of ~~25.7% and an unfavorable~~3.7% partially offset by a favorable impact from foreign currency translation of 1.3%~~, partially offset by~~ and acquisition-related growth of ~~0.4%~~0.6%. Organic

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bookings decline iswas primarily driven by the continued COVID-19 global impact on customer demand, ofas well as a high comparable benchmark from the ~~COVID-19 pandemic,~~prior year driven by large government orders, and partially offset by growth in the biopharma and hygienic markets. Segment book to bill was ~~0.89.~~0.93. Backlog ~~increased 0.2% as~~remained flat compared to the prior year comparable quarter.

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~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2019

Pumps & Process Solutions segment revenue decreased ~~$40.5~~$34.0 million, or ~~6.1%~~3.4%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2019, attributable to organic decline of ~~5.0%~~3.6%, an unfavorable impact from foreign currency translation of ~~1.2%~~0.3% and a ~~0.9%~~0.6% impact from dispositions, partially offset by acquisition-related growth of ~~1.0%~~1.1%. The organic decline was primarily driven by ~~the~~ continued ~~slower~~slow demand in the oil & gas market as well as government mandated facility shutdowns ~~impacting China, India, Mexico and Italy~~ during the first half of the year. We expect demand headwinds to continue into the fourth quarter in the oil and gas industry offset by volume growth in the biopharma and hygienic markets. Customer pricing favorably impacted revenue by approximately 1.0% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Pumps & Process Solutions segment earnings increased ~~$42.5~~$54.9 million, or ~~46.6%~~32.5%, for the ~~six~~nine months ended ~~June~~September 30, ~~2020.~~2020 over the prior year comparable period. Segment earnings for the ~~six~~nine months ended ~~June~~September 30, 2019 included a loss on assets held for sale for Finder of $46.9 million. Excluding the loss, segment earnings ~~decreased $4.4~~increased $7.9 million, predominantly driven ~~by the global impact of COVID-19 on volume, increased material and inflation costs, and an unfavorable impact from foreign currency translation. This decrease was partially offset~~ by pricing initiatives, productivity actions, restructuring benefits, and selling, general and administrative cost reductions. These benefits were partially offset by the global impact of COVID-19 on volume and an unfavorable impact from material and inflation costs. Segment margin increased to ~~21.3%~~22.9% from ~~13.6%~~16.7% from the prior year ~~quarter,~~comparable period, which included the loss on Finder.

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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 June 30,														Six Months Ended June 30,														Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2020			2019			% Change		2020			2019			% Change
Revenue	Revenue	$	293,527		$	385,474		(23.9)	%	$	605,440		$	720,117		(15.9)	%	Revenue	$	368,395		$	370,335		(0.5)	%	$	973,835		$	1,090,452		(10.7)	%

Segment earnings⁽¹⁾	Segment earnings⁽¹⁾	$	11,459		$	44,375		(74.2)	%	$	34,988		$	69,182		(49.4)	%	Segment earnings⁽¹⁾	$	40,159		$	35,211		14.1	%	$	75,147		$	104,393		(28.0)	%
Depreciation and amortization	Depreciation and amortization	11,421			12,777			(10.6)	%	22,969			25,788			(10.9)	%	Depreciation and amortization	12,081			13,047			(7.4)	%	35,050			38,835			(9.7)	%
Segment EBITDA⁽¹⁾	Segment EBITDA⁽¹⁾	$	22,880		$	57,152		(60.0)	%	$	57,957		$	94,970		(39.0)	%	Segment EBITDA⁽¹⁾	$	52,240		$	48,258		8.3	%	$	110,197		$	143,228		(23.1)	%

Segment margin⁽¹⁾	Segment margin⁽¹⁾	3.9		%	11.5		%			5.8		%	9.6		%			Segment margin⁽¹⁾	10.9		%	9.5		%			7.7		%	9.6		%
Segment EBITDA margin⁽¹⁾	Segment EBITDA margin⁽¹⁾	7.8		%	14.8		%			9.6		%	13.2		%			Segment EBITDA margin⁽¹⁾	14.2		%	13.0		%			11.3		%	13.1		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	326,400		$	384,365		(15.1)	%	$	681,557		$	761,363		(10.5)	%	Bookings	$	449,549		$	323,422		39.0	%	$	1,131,106		$	1,084,785		4.3	%
Backlog	Backlog									$	390,368		$	310,454		25.7	%	Backlog									$	472,140		$	262,870		79.6	%

Components of revenue decline:	Components of revenue decline:																	Components of revenue decline:
Organic decline								(20.2)	%							(12.8)	%
Organic growth (decline)																		Organic growth (decline)							2.6	%							(7.6)	%

Dispositions	Dispositions							(3.1)	%							(2.5)	%	Dispositions							(3.8)	%							(3.0)	%
Foreign currency translation	Foreign currency translation							(0.6)	%							(0.6)	%	Foreign currency translation							0.7	%							(0.1)	%
								(23.9)	%							(15.9)	%								(0.5)	%							(10.7)	%

⁽¹⁾ Segment earnings (EBIT) and Segment EBITDA for the three and ~~six~~nine months ended ~~June~~September 30, 2020 include a ~~$781~~$557 expense and a ~~$5,770~~$5,213 net gain on the sale of AMS Chino, respectively. The ~~three and six~~nine months ended ~~June~~September 30, 2020 also include a $3,640 write-off of assets.

~~Second~~Third Quarter 2020 Compared to the ~~Second~~Third Quarter 2019

Refrigeration & Food Equipment segment revenue decreased ~~$91.9~~$1.9 million, or ~~23.9%~~0.5%, as compared to the ~~second~~third quarter of 2019, reflecting ~~an organic revenue decline of 20.2%,~~ a ~~3.1%~~3.8% impact from the disposition of AMS Chino, partially offset by organic revenue growth of 2.6% and ~~an unfavorable~~a favorable impact from foreign currency translation of ~~0.6%~~0.7%. Customer pricing ~~favorably impacted~~did not have a significant impact on revenue ~~by approximately 0.8%~~ in the ~~second~~third quarter of 2020.

The organic revenue ~~decline~~ growth was principally driven by ~~the impact of COVID-19 on the operations of our customers~~recovering demand in food retail ~~and commercial foodservice markets. 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 across the segment. Intermittent interruptions were experienced in our facilities on a global basis, especially earlysupermarket customers resumed their remodeling programs, as well as large shipments against backlog in the ~~second quarter,~~aluminum can shaping business. Our heat exchanger business posted approximately flat revenue year-over-year as weakness in HVAC applications was offset by robust demand in residential and industrial applications, including semiconductor production and server and medical cooling. Commercial foodservice markets remained challenged, with ~~customer order rates~~improving activity in the restaurant chain end-market only partially offset by continued declines in institutional (education, sports and ~~production uptime improving sequentially throughout~~large event venues, et cetera) and independent restaurant markets.

We expect continued strength in the ~~quarter as certain restrictions were eased. Many key customers~~aluminum can shaping market due to secular shifts away from plastic containers 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, because~~favor of ~~COVID restrictions impacting availability of installers and technicians~~aluminum, as well as a ~~desire~~significant increase in demand for canned beverages and food due to ~~maximize store uptime~~the shift to ~~meet surging demand as a result of social distancing and restaurant closure mandates. Retail refrigeration business~~at-home consumption. However, food retailers will likely exhibit normal seasonally slower activity ~~improved late~~ in the fourth quarter ~~with several key retail customers resuming capital investment programs~~due to holidays resulting in sequentially lower revenue as ~~government restrictions related~~we finish the year.

Refrigeration & Food Equipment segment earnings increased $4.9 million, or 14.1%, as compared to ~~COVID-19 were eased. Our ending backlog position is favorable~~the third quarter of 2019. Segment margin increased to 10.9% from 9.5% in the prior year comparable quarter. The earnings growth was driven by leverage on increased organic volumes, broad-based cost reduction and ~~we expect~~productivity initiatives, a $1.7 million gain on sale of assets, and deferral of planned selling, general, and administrative investments, partially offset by the ~~recent wear~~disposition of AMS Chino and tear on existing retail refrigeration assets to drive the need for increased equipment replacement programs going forward. Demand from our U.S. commercial foodservice customers dropped significantly during the quarter as restaurants were closedhigher restructuring costs primarily associated with segment-wide reductions in many localities and customer traffic declined significantly, leading restaurants to delay their capital expenditures. While some large restaurant chain customers have recently resumed capital investment programs, we expect more near-term softness in commercial foodservice due to continued government restrictions on restaurant operations and many school and university kitchens remaining closed. Additionally, we experienced slower sales in our heat exchanger business, but to a lesser extent than in our retail refrigeration and commercial foodservice businesses.force.

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~~Refrigeration & Food Equipment segment earnings decreased $32.9 million, or 74.2%, as compared to~~Bookings in the ~~second~~third quarter of ~~2019. Segment margin decreased to 3.9%~~2020 increased 39.0% from ~~11.5% in~~ the prior year ~~quarter. The earnings decline was driven by reduced volumes and operational inefficiencies associated with impacts~~comparable quarter, reflecting organic growth of 41.3%,a favorable impact from ~~COVID-19, higher restructuring costs primarily associated with segment-wide reductions in force, under-absorption~~foreign currency translation of ~~production fixed overhead, and a~~ ~~$3.6 millionwrite-off of assets~~0.9%, partially offset by ~~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 reflect current conditions,~~ ~~and deferral of planned selling, general, and administrative investments.~~ ~~These actions have resulted in improving margin performance towards the end of the second quarter and we expect to continue such cost control actions in the second half of 2020.~~

~~Bookings in the second quarter of 2020 decreased 15.1% from the prior year quarter, reflecting an organic decline of 11.6%,~~ a ~~3.1%~~3.2% impact from the disposition of AMS ~~Chino, and an unfavorable impact from foreign currency translation of 0.4%. Organic decline~~Chino. The organic growth was driven ~~primarily~~principally by ~~COVID-19 demand reductions in our retail refrigeration, foodservice equipment and heat exchanger businesses, partially offset by~~large project awards for aluminum can shaping equipment supported by market ~~trends~~trends of beverage companies shifting away from plastic and glass containers in favor of aluminum. ~~Bookings trajectory has improved towards the end of the second quarter.~~Additionally, both our retail refrigeration and heat exchanger business experienced stronger order rates, partially offset by ongoing softness in foodservice equipment. Segment book to bill for the ~~second~~third quarter of 2020 was ~~1.11.~~1.22. Backlog increased ~~25.7%~~79.6% over the prior year comparable quarter, principally driven ~~mainly~~ by ~~stronger positions~~our aluminum can shaping equipment business as well as an increase in our retail refrigeration ~~and aluminum can shaping equipment businesses.~~business.

~~Six~~Nine Months Ended ~~June~~September 30, 2020 Compared to the ~~Six~~Nine Months Ended ~~June~~September 30, 2019

Refrigeration & Food Equipment segment revenue decreased ~~$114.7~~$116.6 million, or ~~15.9%~~10.7%, compared to the ~~six~~nine months ended ~~June~~September 30, 2019, reflecting an organic revenue decline of ~~12.8%~~7.6%, a ~~2.5%~~3.0% impact from the disposition of AMS Chino and an unfavorable foreign currency translation of ~~0.6%~~0.1%. The organic revenue decline for the ~~six~~nine months ended ~~June~~September 30, 2020 was driven primarily by the impact of COVID-19 on a global basis. This impact began in the first quarter with operations shut down in China and Malaysia as well as interruptions in North American facilities. Intermittent disruptions continued in the second quarter and lessened in the third quarter. We expect continued strength in the aluminum can shaping market and near-term growth in the retail refrigeration market driven by the recent wear and tear on our customers' existing assets driving equipment replacement programs. Customer pricing favorably impacted revenue by approximately ~~0.4%~~0.3% for the ~~six~~nine months ended ~~June~~September 30, 2020.

Refrigeration & Food Equipment segment earnings decreased ~~$34.2~~$29.2 million, or ~~49.4%~~28.0%, for the ~~six~~nine months ended ~~June~~September 30, 2020, as compared to the prior year comparable period. Segment margin decreased to ~~5.8%~~7.7% from 9.6% in the prior year comparable period due to substantially reduced revenues and operational inefficiencies associated with COVID-19, increased restructuring expenses and a $3.6 million write-off of assets, partially offset by the gain on sale from the disposition of AMS Chino, a $1.7 million gain on sale of assets,and other broad-based cost reduction activities.

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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 in existing businesses and fund strategic acquisitions, while maintaining our prudent capital structure on a short and long-term basis.

Cash Flow Summary

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


		Six Months Ended June 30,							Nine Months Ended September 30,
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2020		2019		Cash Flows (dollars in thousands)	2020		2019
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	$	347,672	$	233,233	Operating activities	$	686,919	$	584,098
Investing activities	Investing activities	(298,274)		(287,445)		Investing activities	(362,998)		(336,057)
Financing activities	Financing activities	213,496		(24,529)		Financing activities	(283,336)		(302,430)

Operating Activities

Cash provided by operating activities for the ~~six~~nine months ended ~~June~~September 30, 2020 increased approximately ~~$114.4~~$102.8 million compared to the comparable period in 2019. This increase was primarily driven by improvements in working capital of ~~$84.3~~$66.1 million, ~~and~~ permitted deferrals of tax payments and advanced payments on contracts, partially offset by lower net earnings, excluding the impact of depreciation, amortization, loss on assets held for sale and gain on sale of a business.

We participated in certain government economic stabilization programs to enhance our li~~quidity.~~liquidity. We deferred approximately $40 million of U.S. and state income tax payments from the second quarter to the third quarter of ~~2020.~~ 2020, which has now been paid. Additionally, under the U.S. CARES Act, we deferred a total of approximately ~~$10~~$20 million of payroll taxes in the second ~~quarter~~and third quarters 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.


Adjusted Working Capital (dollars in thousands)	Adjusted Working Capital (dollars in thousands)	June 30, 2020		December 31, 2019		Adjusted Working Capital (dollars in thousands)	September 30, 2020		December 31, 2019
Accounts receivable	Accounts receivable	$	1,142,583	$	1,217,190	Accounts receivable	$	1,203,429	$	1,217,190
Inventories	Inventories	885,972		806,141		Inventories	838,539		806,141
Less: Accounts payable	Less: Accounts payable	912,588		983,293		Less: Accounts payable	899,814		983,293
Adjusted working capital	Adjusted working capital	$	1,115,967	$	1,040,038	Adjusted working capital	$	1,142,154	$	1,040,038

Adjusted working capital increased from December 31, 2019 by ~~$75.9~~$102.1 million, or ~~7.3%~~9.8%, to $1.1 billion at ~~June~~September 30, 2020, which reflected a decrease of ~~$74.6~~$13.8 million in accounts receivable, an increase of ~~$79.8~~$32.4 million in inventory, and a decrease in accounts payable of ~~$70.7~~$83.5 million.

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Investing Activities

Cash provided by or used in investing activities generally results from cash outflows for capital expenditures and acquisitions, offset by proceeds from sales of businesses and property, plant and equipment. For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, we used cash in investing activities of ~~$298.3~~$363.0 million and ~~$287.4~~$336.1 million, respectively, driven mainly by the following factors:

•Acquisitions: During the ~~six~~nine months ended ~~June~~September 30, 2020, we acquired Systech, Soft-Pak, Em-tec, Solaris, and ~~Em-tec~~an immaterial business within the Imaging & Identification, Engineered Products, and Pumps & Process Solutions segments ~~respectively,~~ for ~~$238.8~~$258.7 million, net of cash acquired. During the ~~six~~nine months ended ~~June~~September 30, 2019, we acquired Belanger, ~~Inc. and~~Inc, All-Flo Pump Company, Limited and an immaterial business within the Fueling Solutions and Pumps &and Process Solutions segments for ~~$215.3~~$215.7 million, net of cash acquired.

•Capital spending: Our capital expenditures decreased ~~$11.9~~$13.7 million during the ~~six~~nine months ended ~~June~~September 30, 2020 compared to the ~~six~~nine months ended ~~June~~September 30, 2019. The decrease is in line with our reduced capital spending plan for the year as a result of COVID-19, without deferring strategic ongoing initiatives.

•Proceeds from sale of businesses: For the ~~six~~nine months ended ~~June~~September 30, 2020, we received proceeds of ~~$16.9~~$15.4 million from the sale of AMS Chino within the Refrigeration & Food Equipment segment. ~~We will pay an approximately $1.5 million working capital adjustment in the third quarter.~~ For the ~~six~~nine months ended ~~June~~September 30, 2019, we received proceeds of $24.2 million from the sale of Finder in the second quarter of 2019.

We anticipate that capital expenditures and any acquisitions we make through the remainder of 2020 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 of our common stock and payments of dividends, offset by net borrowing activity. For the ~~six~~nine months ended ~~June~~September 30, 2020 and 2019, cash ~~provided by financing activities was $213.5 million and~~ used in financing activities was ~~$24.5~~$283.3 million and $302.4 million, respectively, with the activity primarily attributable to the following:

•Repurchase of common stock: During the ~~six~~nine months ended ~~June~~September 30, 2020, we used $52.9 million to repurchase 548,659 shares, all of which were purchased in the first quarter. We suspended further share repurchases in the second quarter as a result of business uncertainty related to COVID-19. We lifted this suspension beginning in the ~~second half of~~third quarter. During the ~~year. There were no share repurchases during the six~~nine months ended ~~June~~September 30, ~~2019.~~2019, we used $23.3 million to repurchase 261,807 shares.

•Long-term debt, commercial paper and notes payable: During the ~~six~~nine months ended ~~June~~September 30, 2020, we borrowed $500 million under the $1.0 billion five-year unsecured revolving credit facility ("Credit Agreement") in the first quarter which was subsequently repaid during the second quarter. During the ~~six~~nine months ended ~~June~~September 30, 2020, we also received net proceeds from commercial paper of ~~$420.3~~$5.8 million. During the ~~six~~nine months ended ~~June~~September 30, 2019, we ~~received net proceeds from~~repaid $37.7 million of commercial paper ~~of $137.4 million primarily to fund the acquisition of Belanger.~~and notes payable.

•Dividend payments: Dividends paid to shareholders during the ~~six~~nine months ended ~~June~~September 30, 2020 totaled ~~$141.6~~$213.0 million as compared to ~~$139.7~~$211.1 million during the same period in 2019. Our dividends paid per common share increased ~~2.1%~~1.7% to ~~$0.98~~$1.475 during the ~~six~~nine months ended ~~June~~September 30, 2020 compared to $~~0.96~~1.450 during the same period in 2019. The number of common shares outstanding decreased during the ~~six~~nine months ended ~~June~~September 30, 2020 compared to the same period in 2019 as a result of share repurchases completed in 2020 and the ~~second half~~fourth quarter of 2019.

•Payments to settle employee tax obligations: Payments to settle tax obligations from the exercise of share-based awards declined ~~$10.0~~$7.6 million compared to the prior year period. The decrease is primarily due to the decrease in the number of shares exercised partially offset by an increase in the average stock price compared to the prior year period.

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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:


		Six Months Ended June 30,										Nine Months Ended September 30,
Free Cash Flow (dollars in thousands)	Free Cash Flow (dollars in thousands)	2020			2019			Free Cash Flow (dollars in thousands)	2020			2019
Cash flow provided by operating activities	Cash flow provided by operating activities	$	347,672		$	233,233		Cash flow provided by operating activities	$	686,919		$	584,098
Less: Capital expenditures	Less: Capital expenditures	(79,171)			(91,092)			Less: Capital expenditures	(123,564)			(137,276)
Free cash flow	Free cash flow	$	268,501		$	142,141		Free cash flow	$	563,355		$	446,822

Free cash flow as a percentage of revenue	Free cash flow as a percentage of revenue	8.5		%	4.0		%	Free cash flow as a percentage of revenue	11.5		%	8.3		%

Free cash flow as a percentage of net earnings	Free cash flow as a percentage of net earnings	89.2		%	46.8		%	Free cash flow as a percentage of net earnings	112.4		%	87.6		%

For the ~~six~~nine months ended ~~June~~September 30, 2020, we generated free cash flow of ~~$268.5~~$563.4 million, representing ~~8.5%~~11.5% of revenue and ~~89.2%~~112.4% of net earnings. Free cash flow for the ~~six~~nine months ended ~~June~~September 30, 2020 increased ~~$126.4~~$116.5 million compared to the prior year period, ~~primarily~~ due to higher operating cash flow primarily as a result of improvements in working capital, ~~and~~ permitted deferrals of tax payments and advanced payments on contracts, as previously noted, and lower capital expenditures.

We ~~maintained~~continued to maintain positive free cash flow inthrough the ~~second~~third quarter by proactively managing our working ~~capital. We will continue this focus in the second half of the year~~capital and ~~beyond. We also continued our plan to significantly reduce~~reducing our capital spend for the year, without deferring strategic ongoing initiatives. We ~~reduced~~also continued to reduce discretionary spend and other costs to align with current demand levels in order to support strong free cash flow generation. We participated in certain government economic stabilization programs to enhance our liquidity by deferring tax payments and utilizing job retention subsidies.

Capitalization

We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common stock. As of ~~June~~September 30, 2020, 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 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 subsequently repaid the $500 million using proceeds from commercial paper as volatility in the commercial paper market stabilized and we resumed borrowing commercial paper.

In the spirit of prudent liquidity management, on May 6, 2020 we also entered into a $450.0 million 364-day revolving credit facility ("Short-term Credit Agreement") which expires on May 5, 2021. The Short-term Credit Agreement is intended to be used primarily for working capital and general corporate purposes. The Company may elect to have loans under the Short-term Credit Agreement which bear interest at a base rate plus a specified applicable margin. We have not undertaken any borrowings under this facility.

Under the Credit Agreement and the Short-term 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 ~~June~~September 30, 2020 and had a coverage ratio of ~~10.7~~11.0 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.

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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.

At ~~June~~September 30, 2020, our cash and cash equivalents totaled ~~$649.0~~$427.5 million, of which ~~$274.8~~$336.1 million was held outside the United States. At December 31, 2019, our cash and cash equivalents totaled $397.3 million, of which $273.1 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.

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)	June 30, 2020			December 31, 2019			Net Debt to Net Capitalization Ratio (dollars in thousands)	September 30, 2020			December 31, 2019

Commercial paper	Commercial paper	505,000			84,700			Commercial paper	$	90,500		$	84,700
Long-term debt	Long-term debt	3,000,870			2,985,716			Long-term debt	3,047,216			2,985,716
Total debt	Total debt	3,505,870			3,070,416			Total debt	3,137,716			3,070,416
Less: Cash and cash equivalents	Less: Cash and cash equivalents	(649,032)			(397,253)			Less: Cash and cash equivalents	(427,501)			(397,253)
Net debt	Net debt	2,856,838			2,673,163			Net debt	2,710,215			2,673,163
Add: Stockholders' equity	Add: Stockholders' equity	3,089,527			3,032,660			Add: Stockholders' equity	3,246,421			3,032,660
Net capitalization	Net capitalization	$	5,946,365		$	5,705,823		Net capitalization	$	5,956,636		$	5,705,823
Net debt to net capitalization	Net debt to net capitalization	48.0		%	46.8		%	Net debt to net capitalization	45.5		%	46.8		%

Our net debt to net capitalization ratio ~~increased~~decreased to ~~48.0%~~45.5% at ~~June~~September 30, 2020 compared to 46.8% at December 31, 2019. Net debt increased ~~$183.7~~$37.1 million during the period primarily due to an increase in ~~commercial paper~~long-term debt as a result of foreign currency translation on Euro denominated notes partially offset by an increase in cash and cash equivalents. Stockholders' equity increased ~~$56.9~~$213.8 million primarily as a result of earnings during the period, partially offset by dividends paid, and share ~~repurchases and foreign currency translation adjustments.~~repurchases.

Operating cash flow, existing capacity of our Credit Agreement and our Short-term 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.

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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”, “intend”, “guidance”, “estimates”, “suggest”, “will”, “plan”, “should”, “would”, “could”, “forecast” 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 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. 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.

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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 equals free cash flow divided by 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in our exposure to market risk during the ~~six~~nine months ended ~~June~~September 30, 2020. 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.

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 ~~June~~September 30, 2020.

During the ~~second~~third quarter of 2020, 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.

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Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

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

a.Not applicable.

b.Not applicable.

c.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. No share repurchases were made under the February 2018 authorization during the three months ended ~~June~~September 30, 2020. As of ~~June~~September 30, 2020, the number of shares still available for repurchase under the February 2018 share repurchase authorization was 7,811,385.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits


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.

10.1			Dover Corporation Deferred Compensation Plan, as amended and restated effective as of September 21, 2020.*

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 ~~June~~September 30, 2020 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 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.

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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:	~~July 22,~~October 20, 2020	/s/ Brad M. Cerepak
		Brad M. Cerepak
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

Date:	~~July 22,~~October 20, 2020	/s/ Ryan W. Paulson
		Ryan W. Paulson
		Vice President, Controller
		(Principal Accounting Officer)