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 30, 2022

or

☐ 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, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act    .

Large Accelerated Filer	☑	Accelerated Filer	☐	Emerging Growth Company	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of the Registrant’s common stock as of July 14, 2022 was 143,549,312.

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 six months ended June 30, 2022 and 2021	1
	Condensed Consolidated Statements of Comprehensive Earnings for the three and six months ended June 30, 2022 and 2021	2
	Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6
	Note 1 — Basis of Presentation	7
	Note 2 — Revenue	7
	Note 3 — Acquisitions	8
	Note 4 — Inventories, net	10
	Note 5 — Property, Plant and Equipment, net	10
	Note 6 — Credit Losses	10
	Note 7 — Goodwill and Other Intangible Assets	11
	Note 8 — Restructuring Activities	12
	Note 9 — Borrowings	13
	Note 10 — Financial Instruments	14
	Note 11 — Income Taxes	15
	Note 12 — Equity Incentive Program	15
	Note 13 — Commitments and Contingent Liabilities	17
	Note 14 — Employee Benefit Plans	17
	Note 15 — Other Comprehensive Earnings	19
	Note 16 — Segment Information	19
	Note 17 — Share Repurchases	22
	Note 18 — Earnings per Share	22
	Note 19 — Recent Accounting Pronouncements	23
	Note 20 — Subsequent Events	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	46
Item 6.	Exhibits	47
SIGNATURES		48

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,
	2022		2021		2022		2021
Revenue	$	2,158,715	$	2,031,676	$	4,210,616	$	3,899,577
Cost of goods and services	1,377,432		1,259,504		2,686,139		2,405,857
Gross profit	781,283		772,172		1,524,477		1,493,720
Selling, general and administrative expenses	424,433		428,042		868,276		837,040
Operating earnings	356,850		344,130		656,201		656,680
Interest expense	26,989		26,661		53,541		53,484
Interest income	(949)		(942)		(1,724)		(1,622)
Other income, net	(4,546)		(4,933)		(6,675)		(7,776)
Earnings before provision for income taxes	335,356		323,344		611,059		612,594
Provision for income taxes	45,738		58,836		95,288		115,317
Net earnings	$	289,618	$	264,508	$	515,771	$	497,277
Net earnings per share:
Basic	$	2.01	$	1.84	$	3.58	$	3.46
Diluted	$	2.00	$	1.82	$	3.56	$	3.43
Weighted average shares outstanding:
Basic	143,832		143,941		143,959		143,854
Diluted	144,669		145,118		144,998		145,040

See Notes to Condensed Consolidated Financial Statements

1

DOVER CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net earnings	$	289,618	$	264,508	$	515,771	$	497,277
Other comprehensive (loss) earnings, net of tax
Foreign currency translation adjustments:
Foreign currency translation (losses) gains	(77,552)		21,559		(99,205)		8,588
Reclassification of foreign currency translation losses to earnings	—		—		5,915		—
Total foreign currency translation adjustments (net of $(10,539), $4,269, $(18,970) and $(6,223) tax benefit (provision), respectively)	(77,552)		21,559		(93,290)		8,588
Pension and other post-retirement benefit plans:
Amortization of actuarial losses included in net periodic pension cost	345		2,353		705		4,727
Amortization of prior service costs included in net periodic pension cost	226		224		447		432
Total pension and other post-retirement benefit plans (net of $(202), $(774), $(410) and $(1,548) tax provision, respectively)	571		2,577		1,152		5,159
Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period	(1,150)		(5)		814		4,319
Net gains reclassified into earnings	(1,045)		(1,460)		(2,621)		(2,871)
Total cash flow hedges (net of $631, $447, $519 and $(424) tax benefit (provision), respectively)	(2,195)		(1,465)		(1,807)		1,448
Other comprehensive (loss) earnings, net of tax	(79,176)		22,671		(93,945)		15,195
Comprehensive earnings	$	210,442	$	287,179	$	421,826	$	512,472

See Notes to Condensed Consolidated Financial Statements

2

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	515,371	$	385,504
Receivables, net	1,514,455		1,347,514
Inventories, net	1,381,607		1,191,095
Prepaid and other current assets	179,563		137,596
Total current assets	3,590,996		3,061,709
Property, plant and equipment, net	963,780		957,310
Goodwill	4,481,451		4,558,822
Intangible assets, net	1,294,626		1,359,522
Other assets and deferred charges	476,568		466,264
Total assets	$	10,807,421	$	10,403,627
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable	$	393,654	$	105,702
Accounts payable	1,200,612		1,073,568
Accrued compensation and employee benefits	224,244		302,978
Deferred revenue	253,632		227,549
Accrued insurance	105,823		101,448
Other accrued expenses	316,209		347,097
Federal and other income taxes	53,461		91,999
Total current liabilities	2,547,635		2,250,341
Long-term debt	2,936,124		3,018,714
Deferred income taxes	366,498		364,117
Noncurrent income tax payable	44,313		48,385
Other liabilities	524,328		532,542
Stockholders' equity:
Total stockholders' equity	4,388,523		4,189,528
Total liabilities and stockholders' equity	$	10,807,421	$	10,403,627

See Notes to Condensed Consolidated Financial Statements

3

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

(Unaudited)

	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at March 31, 2022	$	259,573	$	858,587	$	9,599,195	$	(168,821)	$	(6,218,758)	$	4,329,776
Net earnings	—		—		289,618		—		—		289,618
Dividends paid ($0.50 per share)	—		—		(71,853)		—		—		(71,853)
Common stock issued for the exercise of share-based awards	28		(2,088)		—		—		—		(2,060)
Stock-based compensation expense	—		7,218		—		—		—		7,218
Common stock acquired	—		—		—		—		(85,000)		(85,000)
Other comprehensive loss, net of tax	—		—		—		(79,176)		—		(79,176)
Balance at June 30, 2022	$	259,601	$	863,717	$	9,816,960	$	(247,997)	$	(6,303,758)	$	4,388,523

	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive (loss) earnings		Treasury stock		Total stockholders' equity
Balance at March 31, 2021	$	259,338	$	849,585	$	8,769,709	$	(160,730)	$	(6,218,758)	$	3,499,144
Net earnings	—		—		264,508		—		—		264,508
Dividends paid ($0.495 per share)	—		—		(71,354)		—		—		(71,354)
Common stock issued for the exercise of share-based awards	33		(2,648)		—		—		—		(2,615)
Stock-based compensation expense	—		6,872		—		—		—		6,872
Other comprehensive earnings, net of tax	—		—		—		22,671		—		22,671
Other, net	—		78		—		—		—		78
Balance at June 30, 2021	$	259,371	$	853,887	$	8,962,863	$	(138,059)	$	(6,218,758)	$	3,719,304

See Notes to Condensed Consolidated Financial Statements

4

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

(Unaudited)

	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at December 31, 2021	$	259,457	$	857,636	$	9,445,245	$	(154,052)	$	(6,218,758)	$	4,189,528
Net earnings	—		—		515,771		—		—		515,771
Dividends paid ($1.00 per share)	—		—		(144,056)		—		—		(144,056)
Common stock issued for the exercise of share-based awards	144		(12,250)		—		—		—		(12,106)
Stock-based compensation expense	—		18,331		—		—		—		18,331
Common stock acquired	—		—		—		—		(85,000)		(85,000)
Other comprehensive loss, net of tax	—		—		—		(93,945)		—		(93,945)
Balance at June 30, 2022	$	259,601	$	863,717	$	9,816,960	$	(247,997)	$	(6,303,758)	$	4,388,523

	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at December 31, 2020	$	258,982	$	868,882	$	8,608,284	$	(153,254)	$	(6,197,121)	$	3,385,773
Net earnings	—		—		497,277		—		—		497,277
Dividends paid ($0.99 per share)	—		—		(142,698)		—		—		(142,698)
Common stock issued for the exercise of share-based awards	389		(33,457)		—		—		—		(33,068)
Stock-based compensation expense	—		18,393		—		—		—		18,393
Common stock acquired	—		—		—		—		(21,637)		(21,637)
Other comprehensive earnings, net of tax	—		—		—		15,195		—		15,195
Other, net	—		69		—		—		—		69
Balance at June 30, 2021	$	259,371	$	853,887	$	8,962,863	$	(138,059)	$	(6,218,758)	$	3,719,304

See Notes to Condensed Consolidated Financial Statements

5

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2022		2021
Operating Activities:
Net earnings	$	515,771	$	497,277
Adjustments to reconcile net earnings to cash from operating activities:
Depreciation and amortization	154,294		145,325
Stock-based compensation expense	18,331		18,393
Reclassification of foreign currency translation losses to earnings	5,915		—
Other, net	(8,152)		(9,493)
Cash effect of changes in assets and liabilities:
Accounts receivable, net	(204,676)		(192,192)
Inventories	(223,804)		(144,903)
Prepaid expenses and other assets	(17,923)		(23,133)
Accounts payable	147,829		149,588
Accrued compensation and employee benefits	(72,802)		(13,566)
Accrued expenses and other liabilities	(4,937)		14,289
Accrued and deferred taxes, net	(107,390)		(4,328)
Net cash provided by operating activities	202,456		437,257
Investing Activities:
Additions to property, plant and equipment	(100,577)		(73,231)
Acquisitions, net of cash acquired	(8,453)		(81,187)
Proceeds from sale of property, plant and equipment	3,898		6,088
Other	(10,721)		(2,873)
Net cash used in investing activities	(115,853)		(151,203)
Financing Activities:
Repurchase of common stock	(85,000)		(21,637)
Borrowings in commercial paper and notes payable, net	287,952		—
Dividends paid to stockholders	(144,056)		(142,698)
Payments to settle employee tax obligations on exercise of share-based awards	(12,106)		(33,068)
Other	(1,525)		(2,785)
Net cash provided by (used in) financing activities	45,265		(200,188)
Effect of exchange rate changes on cash and cash equivalents	(2,001)		2,418
Net increase in cash and cash equivalents	129,867		88,284
Cash and cash equivalents at beginning of period	385,504		513,075
Cash and cash equivalents at end of period	$	515,371	$	601,359

See Notes to Condensed Consolidated Financial Statements

6

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, 2021, included in the Company's Annual Report on Form 10-K filed with the SEC on February 11, 2022. The year-end Condensed Consolidated Balance Sheet was derived from audited financial statements. 

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 revenue is recognized at a point in time rather than over time as the Company completes its performance obligations. Specifically, revenue is recognized when control transfers to the customer, typically 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 relates to the sale of equipment or services in which the Company transfers control of a good or service over time and the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs, or our performance creates or enhances an asset the customer controls as the asset is created or enhanced, or our performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for its performance to date plus a reasonable margin.

Revenue from contracts with customers is disaggregated by segment and geographic location, as they best depict the nature and amount of the Company’s revenue. See Note 16 — Segment Information for further details for revenue by segment and geographic location.

At June 30, 2022, we estimated that $287 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 78% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through 2023, with the remaining balance to be recognized in 2024 and thereafter.

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

	June 30, 2022		December 31, 2021		December 31, 2020
Contract assets	$	14,789	$	11,440	$	15,020
Contract liabilities - current	253,632		227,549		184,845
Contract liabilities - non-current	23,520		21,513		13,921

The revenue recognized during the six months ended June 30, 2022 and 2021 that was included in contract liabilities at the beginning of the period, inclusive of adjustments, amounted to $157,175 and $139,891, respectively.

7

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

3. Acquisitions

2022 Acquisitions

During the six months ended June 30, 2022, the Company completed one acquisition. On May 2, 2022, the Company acquired 100% of the voting stock of AMN DPI ("AMN"), a designer and manufacturer of polymer pelletizing tools, for $8,453, net of cash acquired. The AMN acquisition extends the Company's reach into polymer processing equipment production within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $2,315 and intangible assets of $5,349, primarily related to customer intangibles. The goodwill recorded as a result of this acquisition reflects the benefits expected to be derived from product line expansions and operational synergies. The goodwill is non-deductible for U.S. income tax purposes for this acquisition.

2021 Acquisitions

During the six months ended June 30, 2021, the Company acquired four businesses in separate transactions for total consideration of $88,457, net of cash acquired and including contingent consideration. These businesses were acquired to complement and expand upon existing operations within the Imaging & Identification, Pumps & Process Solutions, and Clean Energy & Fueling 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. The goodwill is non-deductible for U.S. income tax purposes for these acquisitions.

On June 24, 2021, the Company acquired 100% of the voting stock of Blue Bite LLC ("Blue Bite"), a leading provider of consumer engagement and brand protection software solutions, for $29,035, net of cash acquired and including contingent consideration. The Blue Bite acquisition strengthens the Company's offering of product traceability and authentication solutions within the Imaging & Identification segment. In connection with this acquisition, the Company recorded goodwill of $19,705 and intangible assets of $13,250, primarily related to technology.

On June 23, 2021, the Company acquired 100% of the voting stock of Quantex Arc Limited ("Quantex"), a leading provider of single-use, recyclable pumps, for $23,896, net of cash acquired and including contingent consideration. The Quantex acquisition enhances the offering of single-use pumps for biopharma and other hygienic applications within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $15,596 and intangible assets of $11,034, primarily related to patented technology.

On April 19, 2021, the Company acquired 100% of the voting stock of AvaLAN Wireless Systems, Incorporated ("AvaLAN"), a leading provider of secure wireless communications solutions for the convenience and fuel retail industry, for $34,003, net of cash acquired. The AvaLAN acquisition extends the Company's reach into the systems and software offering within the Clean Energy & Fueling segment. In connection with this acquisition, the Company recorded goodwill of $26,495 and intangible assets of $14,630, primarily related to customer intangibles.

One other immaterial acquisition was completed during the six months ended June 30, 2021 within the Pumps & Process Solutions segment.

RegO

On December 28, 2021, the Company acquired 100% of the voting stock of ECI Holding Company, LLC ("RegO"), a provider of highly-engineered components and services that facilitate the production, storage, and distribution of cryogenic gases, for $626,620, net of cash acquired and inclusive of the impact of measurement period adjustments discussed below. In connection with this acquisition, the Company recorded goodwill of $158,212 deductible for income tax purposes and $121,616 non-deductible for income tax purposes. The Company also recorded intangible assets of $173,000 for customer intangibles, $40,000 for patents, and $21,000 for trademarks. The fair value of customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. The fair value of assets acquired also includes trade receivables of $33,900. The gross amount is $34,606, of which $706 is expected to be uncollectible. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances.

8

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

During the six months ended June 30, 2022, the Company recorded measurement period adjustments primarily related to its preliminary estimates of deferred taxes and changes in net working capital. These adjustments are based on facts and circumstances that existed as of the acquisition date which resulted in an increase in goodwill of $2,852.

The following presents the updated preliminary allocation of purchase price, net of cash acquired of $10,382, to the assets acquired and liabilities assumed under the RegO acquisition, based on their estimated fair values at their acquisition dates:

	Total
Accounts receivable	$	33,900
Inventories	74,484
Other current assets	2,958
Property, plant and equipment	51,157
Goodwill	279,828
Intangible assets	234,000
Other assets and deferred charges	884
Current liabilities	(20,150)
Non-current liabilities	(30,441)
Net assets acquired	$	626,620

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

	Amount allocated		Useful life (in years)
Goodwill - tax deductible	$	158,212	na
Goodwill - non-deductible	121,616		na
Customer intangibles	173,000		15
Patents	40,000		12
Trademarks	21,000		16
	$	513,828

Acme Cryogenics

On December 16, 2021, the Company acquired 100% of the voting stock of Acme Cryo Intermediate Inc. ("Acme Cryogenics"), a provider of highly-engineered components and services that facilitate the production, storage, and distribution of cryogenic gases, for $292,285, net of cash acquired and inclusive of the impact of measurement period adjustments discussed below. In connection with this acquisition, the Company recorded goodwill of $169,685 non-deductible for income tax purposes. The Company also recorded intangible assets of $99,000 for customer intangibles, $21,800 for unpatented technology and $6,500 for trademarks. The fair value of customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. The fair value of assets acquired also includes trade receivables of $14,143. The gross amount is $14,912, of which $769 is expected to be uncollectible. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances. During the six months ended June 30, 2022, the Company recorded measurement period adjustments primarily related to changes in net working capital. These adjustments are based on facts and circumstances that existed as of the acquisition date which resulted in an increase in goodwill of $476.

9

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Total
Current assets, net of cash acquired	$	27,907
Property, plant and equipment	8,640
Goodwill	169,685
Intangible assets	127,300
Other assets and deferred charges	5,057
Current liabilities	(9,085)
Non-current liabilities	(37,219)
Net assets acquired	$	292,285

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

	Amount allocated		Useful life (in years)
Goodwill - non-deductible	$	169,685	na
Customer intangibles	99,000		15
Unpatented technologies	21,800		12
Trademarks	6,500		16
	$	296,985

4. Inventories, net

	June 30, 2022		December 31, 2021
Raw materials	$	762,068	$	671,195
Work in progress	308,706		271,659
Finished goods	442,045		377,800
Subtotal	1,512,819		1,320,654
Less reserves	(131,212)		(129,559)
Total	$	1,381,607	$	1,191,095

5. Property, Plant and Equipment, net

	June 30, 2022		December 31, 2021
Land	$	63,198	$	63,656
Buildings and improvements	586,545		582,314
Machinery, equipment and other	1,844,918		1,816,473
Property, plant and equipment, gross	2,494,661		2,462,443
Accumulated depreciation	(1,530,881)		(1,505,133)
Property, plant and equipment, net	$	963,780	$	957,310

Depreciation expense totaled $36,573 and $36,045 for the three months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, depreciation expense totaled $74,385 and $74,239, respectively.

6. Credit Losses

The Company is exposed to credit losses primarily through sales of products and services. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on the aging of the accounts receivable balances and other historical and forward-looking information on the financial condition of customers. Balances are written off when determined to be uncollectible.

10

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

	2022		2021
Beginning Balance, December 31 of the Prior Year	$	40,126	$	40,474
Provision for expected credit losses, net of recoveries	(57)		2,209
Amounts written off charged against the allowance	(1,041)		(2,460)
Other, including foreign currency translation	(1,640)		311
Ending balance, June 30	$	37,388	$	40,534

7. Goodwill and Other Intangible Assets

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

	Engineered Products		Clean Energy & Fueling		Imaging & Identification		Pumps & Process Solutions		Climate & Sustainability Technologies		Total
Balance at December 31, 2021	$	723,283	$	1,427,691	$	1,106,202	$	792,839	$	508,807	$	4,558,822
Acquisitions	—		—		—		2,315		—		2,315
Measurement period adjustments	51		3,491		(1,544)		—		—		1,998
Foreign currency translation	(9,990)		(30,913)		(26,778)		(12,875)		(1,128)		(81,684)
Balance at June 30, 2022	$	713,344	$	1,400,269	$	1,077,880	$	782,279	$	507,679	$	4,481,451

During the six months ended June 30, 2022, the Company recognized additions of $2,315 to goodwill as a result of an acquisition as discussed in Note 3 — Acquisitions. During the six months ended June 30, 2022, the Company recorded measurement period adjustments that increased goodwill by $1,998, principally related to deferred taxes and working capital adjustments for 2021 acquisitions within the Clean Energy & Fueling and Imaging & Identification segments.

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

	June 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Customer intangibles	$	1,796,305	$	942,681	$	853,624	$	1,829,492	$	909,776	$	919,716
Trademarks	258,892		124,256		134,636		263,367		116,633		146,734
Patents	203,314		141,449		61,865		205,910		140,327		65,583
Unpatented technologies	248,534		128,700		119,834		221,239		123,464		97,775
Distributor relationships	79,873		55,325		24,548		84,204		55,260		28,944
Drawings and manuals	25,757		25,757		—		27,792		27,303		489
Other	21,986		18,448		3,538		22,347		18,775		3,572
Total	2,634,661		1,436,616		1,198,045		2,654,351		1,391,538		1,262,813
Unamortized intangible assets:
Trademarks	96,581		—		96,581		96,709		—		96,709
Total intangible assets, net	$	2,731,242	$	1,436,616	$	1,294,626	$	2,751,060	$	1,391,538	$	1,359,522

For the three months ended June 30, 2022 and 2021, amortization expense was $38,718 and $35,474, respectively. For the six months ended June 30, 2022 and 2021, amortization expense was $79,909 and $71,086, respectively. Amortization expense is primarily comprised of acquisition-related intangible amortization. During the six months ended June 30, 2022, the Company acquired certain intellectual property assets related to electric refuse collection vehicles for approximately $29,750, including contingent consideration of up to $20,000. These assets were classified as unpatented technologies and included in the Engineered Products segment.

11

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

8. Restructuring Activities

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Engineered Products	$	524	$	4,339	$	981	$	8,330
Clean Energy & Fueling	1,423		1,415		1,619		1,464
Imaging & Identification	344		174		1,535		864
Pumps & Process Solutions	1,476		904		2,161		887
Climate & Sustainability Technologies	159		2,283		5,875		3,344
Corporate	383		321		295		982
Total	$	4,309	$	9,436	$	12,466	$	15,871
These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services	$	1,037	$	4,839	$	1,244	$	8,746
Selling, general and administrative expenses	3,272		4,597		11,222		7,125
Total	$	4,309	$	9,436	$	12,466	$	15,871

The restructuring expenses of $4,309 and $12,466 incurred during the three and six months ended June 30, 2022 were primarily the result of restructuring programs initiated in 2021 and 2022 in response to demand conditions and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization.

The $