UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

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 April 19, 2023 was 139,851,298.

Dover Corporation

Form 10-Q

Table of Contents

PART I — FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Earnings for the three months ended March 31, 2023 and 2022	1
	Condensed Consolidated Statements of Comprehensive Earnings for the three months ended March 31, 2023 and 2022	2
	Condensed Consolidated Balance Sheets at March 31, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	5
	Note 1 — Basis of Presentation	6
	Note 2 — Revenue	6
	Note 3 — Inventories, net	7
	Note 4 — Property, Plant and Equipment, net	7
	Note 5 — Credit Losses	7
	Note 6 — Goodwill and Other Intangible Assets	7
	Note 7 — Restructuring Activities	8
	Note 8 — Borrowings	9
	Note 9 — Financial Instruments	10
	Note 10 — Income Taxes	11
	Note 11 — Equity Incentive Program	12
	Note 12 — Commitments and Contingent Liabilities	13
	Note 13 — Other Comprehensive Earnings	14
	Note 14 — Segment Information	14
	Note 15 — Share Repurchases	17
	Note 16 — Earnings per Share	17
	Note 17 — Recent Accounting Pronouncements	18
	Note 18 — Subsequent Events	18
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
SIGNATURES		38

Item 1. Financial Statements

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Revenue	$	2,079,023	$	2,051,901
Cost of goods and services	1,332,004		1,308,707
Gross profit	747,019		743,194
Selling, general and administrative expenses	432,414		443,843
Operating earnings	314,605		299,351
Interest expense	34,214		26,552
Interest income	(2,091)		(775)
Other income, net	(3,808)		(2,129)
Earnings before provision for income taxes	286,290		275,703
Provision for income taxes	57,716		49,550
Net earnings	$	228,574	$	226,153
Net earnings per share:
Basic	$	1.64	$	1.57
Diluted	$	1.63	$	1.56
Weighted average shares outstanding:
Basic	139,757		144,087
Diluted	140,616		145,329

See Notes to Condensed Consolidated Financial Statements

1

DOVER CORPORATION 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Net earnings	$	228,574	$	226,153
Other comprehensive earnings (loss), net of tax
Foreign currency translation adjustments:
Foreign currency translation gain (loss)	16,572		(21,653)
Reclassification of foreign currency translation losses to earnings	—		5,915
Total foreign currency translation adjustments (net of $4,050 and $(8,431) tax benefit (provision), respectively)	16,572		(15,738)
Pension and other post-retirement benefit plans:
Amortization of actuarial (gain) loss included in net periodic pension cost	(534)		360
Amortization of prior service costs included in net periodic pension cost	264		221
Total pension and other post-retirement benefit plans (net of $82 and $(208) tax benefit (provision), respectively)	(270)		581
Changes in fair value of cash flow hedges:
Unrealized net (loss) gain arising during period	(73)		1,964
Net loss (gain) reclassified into earnings	846		(1,576)
Total cash flow hedges (net of $(220) and $(112) tax provision, respectively)	773		388
Other comprehensive earnings (loss), net of tax	17,075		(14,769)
Comprehensive earnings	$	245,649	$	211,384

See Notes to Condensed Consolidated Financial Statements

2

DOVER CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	272,426	$	380,868
Receivables, net	1,460,970		1,516,871
Inventories, net	1,405,416		1,366,608
Prepaid and other current assets	177,038		159,118
Total current assets	3,315,850		3,423,465
Property, plant and equipment, net	1,011,707		1,004,825
Goodwill	4,680,713		4,669,494
Intangible assets, net	1,301,696		1,333,735
Other assets and deferred charges	494,679		465,000
Total assets	$	10,804,645	$	10,896,519
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$	514,567	$	735,772
Accounts payable	1,039,162		1,068,144
Accrued compensation and employee benefits	191,687		269,785
Deferred revenue	285,209		256,933
Accrued insurance	94,573		92,876
Other accrued expenses	320,435		318,337
Federal and other income taxes	62,860		31,427
Total current liabilities	2,508,493		2,773,274
Long-term debt	2,961,362		2,942,513
Deferred income taxes	358,831		375,150
Noncurrent income tax payable	44,313		44,313
Other liabilities	471,085		474,903
Stockholders' equity:
Total stockholders' equity	4,460,561		4,286,366
Total liabilities and stockholders' equity	$	10,804,645	$	10,896,519

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 January 1, 2023	$	259,644	$	867,560	$	10,223,070	$	(266,223)	$	(6,797,685)	$	4,286,366
Net earnings	—		—		228,574		—		—		228,574
Dividends paid ($0.505 per share)	—		—		(70,773)		—		—		(70,773)
Common stock issued for the exercise of share-based awards	150		(13,137)		—		—				(12,987)
Stock-based compensation expense	—		12,282		—		—		—		12,282
Other comprehensive earnings, net of tax	—		—		—		17,075		—		17,075
Other, net	—		—		24		—		—		24
Balance at March 31, 2023	$	259,794	$	866,705	$	10,380,895	$	(249,148)	$	(6,797,685)	$	4,460,561

	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at January 1, 2022	$	259,457	$	857,636	$	9,445,245	$	(154,052)	$	(6,218,758)	$	4,189,528
Net earnings	—		—		226,153		—		—		226,153
Dividends paid ($0.500 per share)	—		—		(72,203)		—		—		(72,203)
Common stock issued for the exercise of share-based awards	116		(10,162)		—		—		—		(10,046)
Stock-based compensation expense	—		11,113		—		—		—		11,113
Other comprehensive loss, net of tax	—		—		—		(14,769)		—		(14,769)
Balance at March 31, 2022	$	259,573	$	858,587	$	9,599,195	$	(168,821)	$	(6,218,758)	$	4,329,776

See Notes to Condensed Consolidated Financial Statements

4

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Operating Activities:
Net earnings	$	228,574	$	226,153
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	77,896		79,003
Stock-based compensation expense	12,282		11,113
Reclassification of foreign currency translation losses to earnings	—		5,915
Other, net	6,188		(5,593)
Cash effect of changes in assets and liabilities:
Accounts receivable, net	64,929		(97,220)
Inventories	(29,213)		(136,722)
Prepaid expenses and other assets	(30,944)		(23,524)
Accounts payable	(30,271)		58,484
Accrued compensation and employee benefits	(98,791)		(98,602)
Accrued expenses and other liabilities	16,553		(1,463)
Accrued and deferred taxes, net	24,081		6,139
Net cash provided by operating activities	241,284		23,683
Investing Activities:
Additions to property, plant and equipment	(48,375)		(50,381)
Proceeds from sale of property, plant and equipment	2,007		3,177
Other	2,812		241
Net cash used in investing activities	(43,556)		(46,963)
Financing Activities:
Change in commercial paper and other short-term borrowings, net	(221,205)		7,778
Dividends paid to stockholders	(70,773)		(72,203)
Payments to settle employee tax obligations on exercise of share-based awards	(12,987)		(10,046)
Other	(1,600)		(733)
Net cash used in financing activities	(306,565)		(75,204)
Effect of exchange rate changes on cash and cash equivalents	395		2,964
Net decrease in cash and cash equivalents	(108,442)		(95,520)
Cash and cash equivalents at beginning of period	380,868		385,504
Cash and cash equivalents at end of period	$	272,426	$	289,984

See Notes to Condensed Consolidated Financial Statements

5

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, 2022, included in the Company's Annual Report on Form 10-K filed with the SEC on February 10, 2023. 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, including software solutions and 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 14 — Segment Information for further details for revenue by segment and geographic location.

At March 31, 2023, we estimated that $285,778 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 79.4% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through 2024, with the remaining balance to be recognized in 2025 and thereafter.

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

	March 31, 2023		December 31, 2022		December 31, 2021
Contract assets	$	19,170	$	11,074	$	11,440
Contract liabilities - current	285,209		256,933		227,549
Contract liabilities - non-current	19,593		19,879		21,513

The revenue recognized during the three months ended March 31, 2023 and 2022 that was included in contract liabilities at the beginning of the period amounted to $131,563 and $104,008, respectively.

6

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

3. Inventories, net

	March 31, 2023		December 31, 2022
Raw materials	$	816,558	$	812,066
Work in progress	254,141		230,865
Finished goods	476,026		458,881
Subtotal	1,546,725		1,501,812
Less reserves	(141,309)		(135,204)
Total	$	1,405,416	$	1,366,608

4. Property, Plant and Equipment, net

	March 31, 2023		December 31, 2022
Land	$	65,331	$	62,495
Buildings and improvements	629,465		620,500
Machinery, equipment and other	1,955,889		1,895,502
Property, plant and equipment, gross	2,650,685		2,578,497
Accumulated depreciation	(1,638,978)		(1,573,672)
Property, plant and equipment, net	$	1,011,707	$	1,004,825

Depreciation expense totaled $37,530 and $37,812 for the three months ended March 31, 2023 and 2022, respectively.

5. 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.

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.

	2023		2022
Balance at January 1	$	39,399	$	40,126
Provision for expected credit losses, net of recoveries	1,422		1,185
Amounts written off charged against the allowance	(727)		(603)
Other, including foreign currency translation	235		(387)
Balance at March 31	$	40,329	$	40,321

6. 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 January 1, 2023	$	712,542	$	1,391,418	$	1,078,259	$	979,535	$	507,740	$	4,669,494
Measurement period adjustments	—		—		—		(2,709)		—		(2,709)
Foreign currency translation	1,997		5,291		5,196		1,215		229		13,928
Balance at March 31, 2023	$	714,539	$	1,396,709	$	1,083,455	$	978,041	$	507,969	$	4,680,713

During the three months ended March 31, 2023, the Company recorded measurement period adjustments that decreased goodwill by $2,709, principally related to working capital adjustments for 2022 acquisitions within the Pumps & Process Solutions segment.

7

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	March 31, 2023						December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Customer intangibles	$	1,888,873	$	1,027,837	$	861,036	$	1,881,402	$	996,947	$	884,455
Trademarks	266,520		138,203		128,317		265,466		132,791		132,675
Patents	219,878		149,117		70,761		219,199		146,337		72,862
Unpatented technologies	258,414		143,160		115,254		257,428		137,750		119,678
Distributor relationships	80,456		59,025		21,431		79,622		57,299		22,323
Drawings and manuals	26,383		26,383		—		26,062		26,062		—
Other	24,358		16,027		8,331		20,818		15,620		5,198
Total	2,764,882		1,559,752		1,205,130		2,749,997		1,512,806		1,237,191
Unamortized intangible assets:
Trademarks	96,566		—		96,566		96,544		—		96,544
Total intangible assets, net	$	2,861,448	$	1,559,752	$	1,301,696	$	2,846,541	$	1,512,806	$	1,333,735

For the three months ended March 31, 2023 and 2022, amortization expense was $40,366 and $41,191, respectively. Amortization expense is primarily comprised of acquisition-related intangible amortization.

7. Restructuring Activities

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

	Three Months Ended March 31,
	2023		2022
Engineered Products	$	539	$	457
Clean Energy & Fueling	10,144		196
Imaging & Identification	339		1,191
Pumps & Process Solutions	1,326		685
Climate & Sustainability Technologies	242		5,716
Corporate	(114)		(88)
Total	$	12,476	$	8,157
These amounts are classified in the condensed consolidated statements of earnings as follows:
Cost of goods and services	$	3,473	$	207
Selling, general and administrative expenses	9,003		7,950
Total	$	12,476	$	8,157

The restructuring expenses of $12,476 incurred during the three months ended March 31, 2023 were primarily related to headcount reductions and exit costs in the Clean Energy & Fueling segment. These programs were initiated in 2022 and 2023 and were undertaken in light of current market conditions. The Company will continue to make proactive adjustments to its cost structure through restructuring and other programs to align with current demand trends.

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

	Severance		Exit		Total
Balance at January 1, 2023	$	12,007	$	2,503	$	14,510
Restructuring charges	11,635		841		12,476
Payments	(6,728)		(2,207)		(8,935)
Other, including foreign currency translation	179		12		191
Balance at March 31, 2023	$	17,093	$	1,149	$	18,242

8

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

8. Borrowings

Borrowings consist of the following:

	March 31, 2023		December 31, 2022
Short-term:
Commercial paper	$	513,900	$	734,936
Other	667		836
Short-term borrowings	$	514,567	$	735,772

During the three months ended March 31, 2023, commercial paper borrowings decreased $221,036. The borrowings outstanding under the commercial paper program had a weighted average annual interest rate of 5.19% and 4.61% as of March 31, 2023 and December 31, 2022, respectively.

			Carrying amount (1)
	Principal		March 31, 2023		December 31, 2022
Long-term
3.15% 10-year notes due November 15, 2025	$	400,000	$	398,232	$	398,063
1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	641,754		631,522
0.750% 8-year notes due November 4, 2027 (euro-denominated)	€	500,000	534,164		525,654
6.65% 30-year debentures due June 1, 2028	$	200,000	199,481		199,456
2.950% 10-year notes due November 4, 2029	$	300,000	297,502		297,408
5.375% 30-year debentures due October 15, 2035	$	300,000	296,871		296,808
6.60% 30-year notes due March 15, 2038	$	250,000	248,307		248,279
5.375% 30-year notes due March 1, 2041	$	350,000	345,051		344,982
Other			—		341
Total long-term debt			$	2,961,362	$	2,942,513

(1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discounts were $12.3 million and $12.7 million as of March 31, 2023 and December 31, 2022, respectively. Total deferred debt issuance costs were $10.3 million and $10.7 million as of March 31, 2023 and December 31, 2022, respectively.

The discounts are being amortized to interest expense using the effective interest method over the life of the issuances. The deferred issuance costs are amortized on a straight-line basis over the life of the debt, as this approximates the effective interest method.

As of March 31, 2023, 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 and for general corporate purposes. At the Company's election, loans under the Credit Agreement will bear interest at a base rate plus an applicable margin. The Credit Agreement requires the Company to pay a facility fee and imposes various restrictions on the Company such as, among other things, a requirement to maintain a minimum interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1. As of March 31, 2023 and December 31, 2022, there were no outstanding borrowings under the Credit Agreement.

On April 6, 2023, the Company entered into a new $1 billion five-year unsecured revolving credit facility, which has substantially similar terms to the existing Credit Agreement, and a $500 million 364-day unsecured revolving credit facility. The new five-year credit facility replaced the existing Credit Agreement. See Note 18 — Subsequent Events for additional details.

The Company was in compliance with all covenants in the Credit Agreement and other long-term debt covenants at March 31, 2023 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of 14.6 to 1.

9

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Letters of Credit and other Guarantees

As of March 31, 2023, the Company had approximately $184.6 million outstanding in letters of credit, surety bonds, and performance and other guarantees which primarily 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, the probability of which is believed to be remote.

9. 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 which occur within the next twelve months that are denominated in non-functional currencies, with currency forward contracts designated as cash flow hedges. At March 31, 2023 and December 31, 2022, the Company had contracts with total notional amounts of $187,875 and $184,565, respectively, to exchange currencies, principally euro, pound sterling, Swedish krona, Canadian dollar, Chinese yuan, 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 $105,736 and $102,509 as of March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022 and the balance sheet lines in which they are recorded:

	Fair Value Asset (Liability)
	March 31, 2023		December 31, 2022		Balance Sheet Caption
Foreign currency forward	$	857	$	944	Prepaid and other current assets
Foreign currency forward	(2,025)		(2,760)		Other accrued expenses

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

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

The Company has designated the €600,000 and €500,000 of euro-denominated notes issued November 9, 2016 and November 4, 2019, respectively, as hedges of a portion of its net investment in euro-denominated operations. Changes in the value of the euro-denominated debt are recognized in foreign currency translation adjustments within other comprehensive earnings (loss) of the condensed consolidated statements of comprehensive earnings to offset changes in the value of the net investment in euro-denominated operations. Changes in the value of the euro-denominated debt resulting from exchange rate differences are offset by changes in the net investment due to the high degree of effectiveness between the hedging instruments and the exposure being hedged.

10

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Three Months Ended March 31,
	2023		2022
(Loss) gain on euro-denominated debt	$	(18,247)	$	37,748
Tax benefit (expense)	4,050		(8,431)
Net (loss) gain on net investment hedges, net of tax	$	(14,197)	$	29,317

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 as follows:

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 March 31, 2023 and December 31, 2022:

	March 31, 2023		December 31, 2022
	Level 2		Level 2
Assets:
Foreign currency cash flow hedges	$	857	$	944
Liabilities:
Foreign currency cash flow hedges	2,025		2,760

The derivative contracts are measured at fair value using models based on observable market inputs such as foreign currency exchange rates and interest rates; therefore, they are classified within Level 2 of the fair value hierarchy.

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

The estimated fair value of long-term debt at March 31, 2023 and December 31, 2022, was $2,892,395 and $2,786,862, 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 short-term borrowings approximate their fair values as of March 31, 2023 and December 31, 2022 due to the short-term nature of these instruments.

10. Income Taxes

The effective tax rates for the three months ended March 31, 2023 and 2022 were 20.2% and 18.0%, respectively. The increase in the effective tax rate for the three months ended March 31, 2023 relative to the prior year comparable period was primarily driven by favorable audit resolutions in 2022.

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

11

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 $5,890.

11. Equity Incentive Program

The Company typically makes its annual grants of equity awards pursuant to actions taken by the Compensation Committee of the Board of Directors at its regularly scheduled first quarter meeting. During the three months ended March 31, 2023, the Company issued stock-settled appreciation rights ("SARs") covering 358,322 shares, performance share awards ("PSAs") of 43,656 and restricted stock units ("RSUs") of 78,029. During the three months ended March 31, 2022, the Company issued SARs covering 327,940 shares, PSAs of 40,087 and RSUs of 71,961.

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 awards 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
	2023		2022
Risk-free interest rate	3.91	%	1.86	%
Dividend yield	1.32	%	1.25	%
Expected life (years)	5.4		5.4
Volatility	30.65	%	29.46	%
Grant price	$153.25		$160.21
Fair value per share at date of grant	$47.27		$42.07

The PSAs granted in 2023 and 2022 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 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 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 PSAs granted in the respective periods were as follows:

	PSAs
	2023		2022
Risk-free interest rate	4.28	%	1.68	%
Dividend yield	1.32	%	1.25	%
Expected life (years)	2.9		2.9
Volatility	27.30	%	31.10	%
Grant price	$153.25		$160.21
Fair value per share at date of grant	$249.48		$196.40

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, which was $153.25 and $160.21 for RSUs granted in 2023 and 2022, respectively.

12

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Three Months Ended March 31,
	2023		2022
Pre-tax stock-based compensation expense	$	12,282	$	11,113
Tax benefit	(1,364)		(1,115)
Total stock-based compensation expense, net of tax	$	10,918	$	9,998

12. Commitments and Contingent Liabilities

Litigation

A few of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites identified under federal and state statutes which provide for the allocation of such costs among "potentially responsible parties." In each instance, the extent of the Company’s liability appears to be relatively insignificant 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, a few of the Company’s subsidiaries are involved in ongoing remedial activities at certain current and former plant sites, in cooperation with regulatory agencies, and appropriate estimated liabilities have been established. At March 31, 2023 and December 31, 2022, these estimated liabilities for environmental and other matters, including private party claims for exposure to hazardous substances that are probable and estimable, were not significant.

The Company and some of its subsidiaries are also parties to a number of other legal proceedings incidental to their businesses. These proceedings primarily involve claims by private parties alleging injury arising out of use of the Company’s products, patent infringement, employment matters and commercial disputes. Management and legal counsel, at least quarterly, review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and currently accrued to-date and consider the availability and extent of insurance coverage. The Company has estimated liabilities for these other legal matters that are probable and estimable, and at March 31, 2023 and December 31, 2022, these estimated liabilities were immaterial. While it is not possible at this time to predict the outcome of these legal actions, in the opinion of management, based on the aforementioned reviews, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on its financial position, results of operations, or cash flows.

Warranty Accruals

Estimated warranty program claims are provided for at the time of sale of the Company's products. Amounts provided for are based on historical costs and adjusted for new claims and are included within other accrued expenses and other liabilities in the condensed consolidated balance sheet. The changes in the carrying amount of product warranties through March 31, 2023 and 2022, were as follows:

	2023		2022
Balance at January 1	$	48,449	$	48,568
Provision for warranties	16,166		16,052
Settlements made	(15,812)		(15,485)
Other adjustments, including acquisitions and currency translation	311		255
Balance at March 31	$	49,114	$	49,390

13

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

13. Other Comprehensive Earnings

Amounts reclassified from accumulated other comprehensive loss to earnings during the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	2023		2022
Foreign currency translation:
Reclassification of foreign currency translation losses to earnings for the substantial liquidation of businesses	$	—	$	5,915
Tax benefit	—		—
Net of tax	$	—	$	5,915
Pension plans:
Amortization of actuarial (gain) loss	$	(641)	$	521
Amortization of prior service costs	289		268
Total before tax	(352)		789
Tax provision (benefit)	82		(208)
Net of tax	$	(270)	$	581
Cash flow hedges:
Net loss (gain) reclassified into earnings	$	1,073	$	(2,029)
Tax (benefit) provision	(227)		453
Net of tax	$	846	$	(1,576)

Foreign currency translation losses were recognized in selling, general and administrative expenses within the condensed consolidated statement of earnings as a result of the substantial liquidation of certain businesses.

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.

14. Segment Information

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

•Engineered Products segment provides a wide range of equipment, components, software, solutions and services to the vehicle aftermarket, waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-markets.

•Clean Energy & Fueling segment provides components, equipment, software, solutions and services enabling safe and reliable storage, transport and dispensing of traditional and clean fuels (including liquefied natural gas, hydrogen, and electric vehicle charging), cryogenic gases, and other hazardous substances along the supply chain, and safe and efficient operation of convenience retail, retail fueling and vehicle wash establishments.

•Imaging & Identification segment supplies precision marking and coding, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical, industrial manufacturing, textile and other end-markets.

•Pumps & Process Solutions segment manufactures specialty pumps and flow meters, highly engineered precision components for rotating and reciprocating machines, fluid connecting solutions and plastics and polymer processing equipment, serving single-use biopharmaceutical production, diversified industrial manufacturing, chemical production, plastics and polymer processing, midstream and downstream oil and gas and other end-markets.

14

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

•Climate & Sustainability Technologies segment is a provider of innovative and energy-efficient equipment, components and parts for the commercial refrigeration, equipment and systems, heating and cooling and beverage can-making equipment markets.

Management uses segment earnings to evaluate segment performance and allocate resources. Segment earnings is defined as earnings before purchase accounting expenses, restructuring and other costs (benefits), loss (gain) on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes.

In the second quarter of 2022, the segment measure of profit and loss used by the Company's Chief Operating Decision Maker ("CODM") was changed to segment earnings from segment earnings (EBIT), defined as earnings before corporate expenses/other, interest expense, interest income and provision for income taxes. This change in segment measure allows the CODM to better assess operating results over time and is consistent with how the CODM evaluates our businesses. Accordingly, we have updated our segment earnings for the three months ended March 31, 2022 to conform to the new presentation.

15

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Three Months Ended March 31,
	2023		2022
Revenue:
Engineered Products	$	497,549	$	487,647
Clean Energy & Fueling	430,729		458,395
Imaging & Identification	283,091		272,255
Pumps & Process Solutions	413,881		435,195
Climate & Sustainability Technologies	455,325		399,078
Intersegment eliminations	(1,552)		(669)
Total consolidated revenue	$	2,079,023	$	2,051,901
Net earnings:
Segment earnings:
Engineered Products	$	84,275	$	71,130
Clean Energy & Fueling	73,605		72,962
Imaging & Identification	68,315		58,598
Pumps & Process Solutions	115,244		146,617
Climate & Sustainability Technologies	73,778		53,609
Total segment earnings	415,217		402,916
Purchase accounting expenses (1)	42,679		53,286
Restructuring and other costs (2)	14,053		10,552
Loss on dispositions (3)	—		194
Corporate expense / other (4)	40,072		37,404
Interest expense	34,214		26,552
Interest income	(2,091)		(775)
Earnings before provision for income taxes	286,290		275,703
Provision for income taxes	57,716		49,550
Net earnings	$	228,574	$	226,153

(1) Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.

(2) Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. Restructuring and other costs consist of the following:

	Three Months Ended March 31,
	2023		2022
Restructuring	$	12,476	$	8,157
Other costs, net	1,577		2,395
Restructuring and other costs	$	14,053	$	10,552

(3) Loss on dispositions includes working capital adjustments related to dispositions.

(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 and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.

16

DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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