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, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the transition period from to

Commission File Number: 1-4018

(Exact name of registrant as specified in its charter)


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

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

(630) 541-1540

(Registrant’s telephone number, including area code)

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


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange ~~Act.~~Act .

Large Accelerated Filer

☑

Accelerated Filer

☐

Emerging Growth Company

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

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

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

The number of shares outstanding of the Registrant’s common stock as of July ~~15, 2020~~13, 2021 was ~~143,970,164.~~143,960,933.

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~~ months ended June 30 3 0 , ~~2020~~2021 and ~~2019~~2020	1
	Condensed Consolidated Statements of Comprehensive Earnings for the three and six months ended June 30 3 0 , ~~2020~~2021 and ~~2019~~2020	2
	Condensed Consolidated Balance Sheets at June 30 3 0 , ~~2020~~2021 and December 31, ~~2019~~2020	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30 3 0 , ~~2020~~2021 and ~~2019~~2020	54
	Condensed Consolidated Statements of Cash Flows for the ~~six~~si x months ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020	6
	~~Notes to Condensed Consolidated Financial Statements~~Note 1 — Basis of Presentation	7
	Note 2 — Revenue	7
	Note 3 — Acquisitions	8
	Note 4 — Disposed Operations	9
	Note 5 — Inventories	10
	Note 6 — Property, Plant and Equipment, net	10
	Note 7 — Credit Losses	10
	Note 8 — Goodwill and Other Intangible Assets	11
	Note 9 — Restructuring Activities	12
	Note 10 — Borrowings	13
	Note 11 — Financial Instruments	13
	Note 12 — Income Taxes	15
	Note 13 — Equity Incentive Program	15
	Note 14 — Commitments and Contingent Liabilities	17
	Note 15 — Employee Benefit Plans	17
	Note 16 — Other Comprehensive Earnings	18
	Note 17 — Segment Information	19
	Note 18 — Share Repurchases	20
	Note 19 — Earnings per Share	21
	Note 20 — Recent Accounting Pronouncements	21

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2422
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4642
Item 4.	Controls and Procedures	4643

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	4643
Item 1A.	Risk Factors	4743
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4743
Item 3.	Defaults Upon Senior Securities	4743
Item 4.	Mine Safety Disclosures	4743
Item 5.	Other Information	4743
Item 6.	Exhibits	4844
SIGNATURES			4945

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 June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenue	Revenue	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	Revenue	$	2,031,676	$	1,499,175	$	3,899,577	$	3,155,114
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	1,259,504		947,577		2,405,857		1,991,273
Gross profit	Gross profit	551,598		672,593		1,163,841		1,296,135		Gross profit	772,172		551,598		1,493,720		1,163,841
Selling, general and administrative expenses	Selling, general and administrative expenses	366,740		396,634		753,681		805,100		Selling, general and administrative expenses	428,042		366,740		837,040		753,681
Loss on assets held for sale		—		—		—		46,946

Operating earnings	Operating earnings	184,858		275,959		410,160		444,089		Operating earnings	344,130		184,858		656,680		410,160
Interest expense	Interest expense	28,711		31,754		55,979		63,562		Interest expense	26,661		28,711		53,484		55,979
Interest income	Interest income	(728)		(945)		(1,911)		(1,835)		Interest income	(942)		(728)		(1,622)		(1,911)

Loss (gain) on sale of a business		781		—		(5,770)		—
Gain on sale of a business										Gain on sale of a business	0		781		0		(5,770)
Other income, net	Other income, net	(735)		(4,589)		(8,467)		(5,695)		Other income, net	(4,933)		(735)		(7,776)		(8,467)
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	323,344		156,829		612,594		370,329
Provision for income taxes	Provision for income taxes	32,063		51,654		69,284		84,267		Provision for income taxes	58,836		32,063		115,317		69,284

Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	264,508	$	124,766	$	497,277	$	301,045

Net earnings per share:	Net earnings per share:									Net earnings per share:
Basic	Basic	$	0.87	$	1.36	$	2.09	$	2.09	Basic	$	1.84	$	0.87	$	3.46	$	2.09
Diluted	Diluted	$	0.86	$	1.35	$	2.07	$	2.07	Diluted	$	1.82	$	0.86	$	3.43	$	2.07
Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	143,955		145,366		144,107		145,227		Basic	143,941		143,955		143,854		144,107
Diluted	Diluted	144,995		147,179		145,359		147,041		Diluted	145,118		144,995		145,040		145,359

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 June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	264,508	$	124,766	$	497,277	$	301,045
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)	21,559		44,569		8,588		(48,985)
Reclassification of foreign currency translation losses to earnings		—		—		—		25,339
Total foreign currency translation adjustments		44,569		(13,978)		(48,985)		35,061

Total foreign currency translation adjustments (net of $4,269, $8,028, $(6,223), $2,889 tax benefit (provision), respectively)										Total foreign currency translation adjustments (net of $4,269, $8,028, $(6,223), $2,889 tax benefit (provision), respectively)	21,559		44,569		8,588		(48,985)
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	2,353		1,835		4,727		3,504
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	224		259		432		544

Total pension and other post-retirement benefit plans		2,094		589		4,048		1,336
Total pension and other post-retirement benefit plans (net of $(774), $(421), $(1,548), $(989) tax provision, respectively)										Total pension and other post-retirement benefit plans (net of $(774), $(421), $(1,548), $(989) tax provision, respectively)	2,577		2,094		5,159		4,048
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	(5)		1,880		4,319		(3,194)
Net (gains) losses reclassified into earnings	Net (gains) losses reclassified into earnings	(594)		(416)		528		(646)		Net (gains) losses reclassified into earnings	(1,460)		(594)		(2,871)		528
Total cash flow hedges		1,286		(3,778)		(2,666)		(1,414)
Total cash flow hedges (net of $447, $(365), $(424), $757 tax benefit (provision), respectively)										Total cash flow hedges (net of $447, $(365), $(424), $757 tax benefit (provision), respectively)	(1,465)		1,286		1,448		(2,666)

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	22,671		47,949		15,195		(47,603)
Comprehensive earnings	Comprehensive earnings	$	172,715	$	180,918	$	253,442	$	338,773	Comprehensive earnings	$	287,179	$	172,715	$	512,472	$	253,442

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			June 30, 2021		December 31, 2020
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	$	601,359	$	513,075

Receivables, net of allowances of $38,825 and $29,381		1,142,583		1,217,190
Inventories		885,972		806,141
Receivables, net of allowances of $40,534 and $40,474						Receivables, net of allowances of $40,534 and $40,474	1,329,051		1,137,223
Inventories, net						Inventories, net	977,831		835,804
Prepaid and other current assets	Prepaid and other current assets	121,858		127,846		Prepaid and other current assets	151,291		133,085

Total current assets	Total current assets	2,799,445		2,548,430		Total current assets	3,059,532		2,619,187
Property, plant and equipment, net	Property, plant and equipment, net	858,274		842,318		Property, plant and equipment, net	895,551		897,326

Goodwill	Goodwill	3,919,851		3,783,347		Goodwill	4,126,691		4,072,542
Intangible assets, net	Intangible assets, net	1,084,834		1,055,014		Intangible assets, net	1,049,109		1,083,772
Other assets and deferred charges	Other assets and deferred charges	451,729		440,368		Other assets and deferred charges	499,117		479,247

Total assets	Total assets	$	9,114,133	$	8,669,477	Total assets	$	9,630,000	$	9,152,074

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity									Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:
Notes payable		$	505,000	$	84,700

Accounts payable	Accounts payable	912,588		983,293		Accounts payable	$	1,006,557	$	853,942
Accrued compensation and employee benefits	Accrued compensation and employee benefits	176,767		226,658		Accrued compensation and employee benefits	235,258		239,750
Deferred revenue						Deferred revenue	189,317		184,845
Accrued insurance	Accrued insurance	108,068		98,432		Accrued insurance	105,895		98,954
Other accrued expenses	Other accrued expenses	375,678		339,060		Other accrued expenses	333,772		343,637
Federal and other income taxes	Federal and other income taxes	35,660		17,748		Federal and other income taxes	30,612		17,670

Total current liabilities	Total current liabilities	2,113,761		1,749,891		Total current liabilities	1,901,411		1,738,798
Long-term debt	Long-term debt	3,000,870		2,985,716		Long-term debt	3,083,246		3,108,829
Deferred income taxes	Deferred income taxes	319,396		322,036		Deferred income taxes	311,496		298,423
Noncurrent income tax payable	Noncurrent income tax payable	47,964		52,000		Noncurrent income tax payable	49,937		49,937
Other liabilities	Other liabilities	542,615		527,174		Other liabilities	564,606		570,314

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

Total stockholders' equity	Total stockholders' equity	3,089,527		3,032,660		Total stockholders' equity	3,719,304		3,385,773
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	9,114,133	$	8,669,477	Total liabilities and stockholders' equity	$	9,630,000	$	9,152,074

See Notes to Condensed Consolidated Financial Statements

Table of Contents

DOVER CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


		Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) earnings		Total stockholders' equity			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, 2020		$	258,745	$	862,747	$	(6,143,758)	$	8,314,525	$	(311,578)	$	2,980,681
Balance at March 31, 2021														Balance at March 31, 2021	$	259,338	$	849,585	$	8,769,709	$	(160,730)	$	(6,218,758)	$	3,499,144
Net earnings	Net earnings	—		—		—		124,766		—		124,766		Net earnings	0		0		264,508		0		0		264,508
Dividends paid ($0.49 per share)		—		—		—		(70,671)		—		(70,671)
Dividends paid ($0.495 per share)														Dividends paid ($0.495 per share)	0		0		(71,354)		0		0		(71,354)
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	33		(2,648)		0		0		0		(2,615)
Stock-based compensation expense	Stock-based compensation expense	—		4,968		—		—		—		4,968		Stock-based compensation expense	0		6,872		0		0		0		6,872

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		22,671		0		22,671
Other, net	Other, net	—		3,032		—		—		—		3,032		Other, net	0		78		0		0		0		78
Balance at June 30, 2020		$	258,768	$	869,526	$	(6,143,758)	$	8,368,620	$	(263,629)	$	3,089,527
Balance at June 30, 2021														Balance at June 30, 2021	$	259,371	$	853,887	$	8,962,863	$	(138,059)	$	(6,218,758)	$	3,719,304


		Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive loss		Total stockholders' equity			Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at March 31, 2019		$	258,214	$	866,365	$	(5,947,562)	$	7,851,382	$	(190,946)	$	2,837,453
Balance at March 31, 2020														Balance at March 31, 2020	$	258,745	$	862,747	$	8,314,525	$	(311,578)	$	(6,143,758)	$	2,980,681

Net earnings	Net earnings	—		—		—		198,085		—		198,085		Net earnings	0		0		124,766		0		0		124,766
Dividends paid ($0.48 per share)		—		—		—		(69,921)		—		(69,921)
Dividends paid ($0.49 per share)														Dividends paid ($0.49 per share)	0		0		(70,671)		0		0		(70,671)
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	23		(1,221)		0		0		0		(1,198)
Stock-based compensation expense	Stock-based compensation expense	—		8,435		—		—		—		8,435		Stock-based compensation expense	0		4,968		0		0		0		4,968

Other comprehensive loss, net of tax		—		—		—		—		(17,167)		(17,167)
Other comprehensive earnings, net of tax														Other comprehensive earnings, net of tax	0		0		0		47,949		0		47,949
Other, net	Other, net	—		(64)		—		51		—		(13)		Other, net	0		3,032		0		0		0		3,032
Balance at June 30, 2019		$	258,315	$	873,034	$	(5,947,562)	$	7,979,597	$	(208,113)	$	2,955,271
Balance at June 30, 2020														Balance at June 30, 2020	$	258,768	$	869,526	$	8,368,620	$	(263,629)	$	(6,143,758)	$	3,089,527

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
Balance at December 31, 2019 $ 258,552 $ 869,719 $ (6,090,842) $ 8,211,257 $ (216,026) $ 3,032,660
Adoption of ASU 2016-13 — — — (2,112) — (2,112)
Net earnings — — — 301,045 — 301,045
Dividends paid ($0.98 per share) — — — (141,570) — (141,570)
Common stock issued for the exercise of share-based awards 216 (11,433) — — — (11,217)
Stock-based compensation expense — 8,220 — — — 8,220
Common stock acquired — — (52,916) — — (52,916)
Other comprehensive loss, net of tax — — — — (47,603) (47,603)
Other, net — 3,020 — — — 3,020
Balance at June 30, 2020 $ 258,768 $ 869,526 $ (6,143,758) $ 8,368,620 $ (263,629) $ 3,089,527


	Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive (loss) earnings		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	0		0		497,277		0		0		497,277
Dividends paid ($0.99 per share)	0		0		(142,698)		0		0		(142,698)
Common stock issued for the exercise of share-based awards	389		(33,457)		0		0		0		(33,068)
Stock-based compensation expense	0		18,393		0		0		0		18,393
Common stock acquired	0		0		0		0		(21,637)		(21,637)
Other comprehensive earnings, net of tax	0		0		0		15,195		0		15,195
Other, net	0		69		0		0		0		69
Balance at June 30, 2021	$	259,371	$	853,887	$	8,962,863	$	(138,059)	$	(6,218,758)	$	3,719,304


		Common stock $1 par value		Additional paid-in capital		Treasury stock		Retained earnings		Accumulated other comprehensive (loss) earnings		Total stockholders' equity			Common stock $1 par value		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total stockholders' equity
Balance at December 31, 2018		$	257,822	$	886,016	$	(5,947,562)	$	7,815,486	$	(243,096)	$	2,768,666
Balance at December 31, 2019														Balance at December 31, 2019	$	258,552	$	869,719	$	8,211,257	$	(216,026)	$	(6,090,842)	$	3,032,660
Adoption of ASU 2016-13														Adoption of ASU 2016-13	0		0		(2,112)		0		0		(2,112)
Net earnings	Net earnings	—		—		—		303,790		—		303,790		Net earnings	0		0		301,045		0		0		301,045
Dividends paid ($0.96 per share)		—		—		—		(139,730)		—		(139,730)
Dividends paid ($0.98 per share)														Dividends paid ($0.98 per share)	0		0		(141,570)		0		0		(141,570)
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	216		(11,433)		0		0		0		(11,217)
Stock-based compensation expense	Stock-based compensation expense	—		16,617		—		—		—		16,617		Stock-based compensation expense	0		8,220		0		0		0		8,220

Other comprehensive earnings, net of tax		—		—		—		—		34,983		34,983
Common stock acquired														Common stock acquired	0		0		0		0		(52,916)		(52,916)
Other comprehensive loss, net of tax														Other comprehensive loss, net of tax	0		0		0		(47,603)		0		(47,603)
Other, net	Other, net	—		(7,897)		—		51		—		(7,846)		Other, net	0		3,020		0		0		0		3,020
Balance at June 30, 2019		$	258,315	$	873,034	$	(5,947,562)	$	7,979,597	$	(208,113)	$	2,955,271
Balance at June 30, 2020														Balance at June 30, 2020	$	258,768	$	869,526	$	8,368,620	$	(263,629)	$	(6,143,758)	$	3,089,527

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,
2020 2019
Operating Activities:
Net earnings $ 301,045 $ 303,790
Adjustments to reconcile net earnings to cash from operating activities:
Loss on assets held for sale — 46,946
Depreciation and amortization 136,355 135,507
Stock-based compensation expense 8,220 16,617
Gain on sale of a business (5,770) —
Other, net (9,021) (5,373)
Cash effect of changes in assets and liabilities:
Accounts receivable, net 73,317 (63,228)
Inventories (80,883) (93,554)
Prepaid expenses and other assets (12,975) (23,359)
Accounts payable (72,009) (7,128)
Accrued compensation and employee benefits (63,621) (50,246)
Accrued expenses and other liabilities 55,736 (20,915)
Accrued and deferred taxes, net 17,278 (5,824)
Net cash provided by operating activities 347,672 233,233
Investing Activities:
Additions to property, plant and equipment (79,171) (91,092)
Acquisitions, net of cash acquired (238,839) (215,304)
Proceeds from sale of property, plant and equipment 2,886 2,633
Proceeds from sale of businesses 16,850 24,218
Other — (7,900)
Net cash used in investing activities (298,274) (287,445)
Financing Activities:
Repurchase of common stock (52,916) —
Change in notes payable 420,300 137,350
Dividends paid to stockholders (141,570) (139,730)
Payments to settle employee tax obligations on exercise of share-based awards (11,217) (21,209)
Other (1,101) (940)
Net cash provided by (used in) financing activities 213,496 (24,529)
Effect of exchange rate changes on cash and cash equivalents (11,115) 3,846
Net increase (decrease) in cash and cash equivalents 251,779 (74,895)
Cash and cash equivalents at beginning of period 397,253 396,221
Cash and cash equivalents at end of period $ 649,032 $ 321,326


	Six Months Ended June 30,
	2021		2020
Operating Activities:
Net earnings	$	497,277	$	301,045

Adjustments to reconcile net earnings to cash from operating activities:


Depreciation and amortization	145,325		136,355
Stock-based compensation expense	18,393		8,220

Gain on sale of a business	0		(5,770)
Other, net	(9,493)		(9,021)
Cash effect of changes in assets and liabilities:
Accounts receivable, net	(192,192)		73,317
Inventories	(144,903)		(80,883)
Prepaid expenses and other assets	(23,133)		(12,975)
Accounts payable	149,588		(93,609)
Accrued compensation and employee benefits	(13,566)		(63,621)
Accrued expenses and other liabilities	14,289		77,336

Accrued and deferred taxes, net	(4,328)		17,278
Net cash provided by operating activities	437,257		347,672

Investing Activities:
Additions to property, plant and equipment	(73,231)		(79,171)
Acquisitions, net of cash acquired	(81,187)		(238,839)
Proceeds from sale of property, plant and equipment	6,088		2,886
Proceeds from sale of businesses	0		16,850
Other	(2,873)		0
Net cash used in investing activities	(151,203)		(298,274)

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

Change in notes payable	0		420,300
Dividends paid to stockholders	(142,698)		(141,570)
Payments to settle employee tax obligations on exercise of share-based awards	(33,068)		(11,217)


Other	(2,785)		(1,101)
Net cash (used in) provided by financing activities	(200,188)		213,496







Effect of exchange rate changes on cash and cash equivalents	2,418		(11,115)

Net increase in cash and cash equivalents	88,284		251,779
Cash and cash equivalents at beginning of period	513,075		397,253
Cash and cash equivalents at end of period	$	601,359	$	649,032

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,~~2020, included in the Company's Annual Report on Form 10-K filed with the SEC on February ~~14, 2020.~~12, 2021. The ~~year end~~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~~equipment or ~~engineered to order equipment that have no alternative use and~~services in which the ~~contract specifies~~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 aan enforceable right to payment for its ~~costs,~~performance to date plus a reasonable margin.

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

At June 30, ~~2020,~~2021, we estimated that ~~$155~~$272 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%~~58% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through ~~2021,~~2022, with the remaining balance to be recognized in ~~2022~~2023 and thereafter.

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


		June 30, 2020		December 31, 2019		January 1, 2019			June 30, 2021		December 31, 2020		December 31, 2019

Contract assets	Contract assets	$	16,423	$	14,894	$	9,330	Contract assets	$	15,079	$	15,020	$	14,894
Contract liabilities - current	Contract liabilities - current	78,258		44,001		36,461		Contract liabilities - current	189,317		184,845		104,901
Contract liabilities - non-current	Contract liabilities - non-current	12,247		9,121		9,382		Contract liabilities - non-current	22,534		13,921		10,921

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

The revenue recognized during the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 that was included in contract liabilities at the beginning of the period, inclusive of adjustments, amounted to ~~$26,113~~$139,891 and ~~$27,701,~~$63,778, 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

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 Fueling 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. 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 Fueling Solutions 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.

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	$	5,128
Property, plant and equipment	1,854
Goodwill	62,487
Intangible assets	38,914
Other assets and deferred charges	415
Current liabilities	(11,604)
Other liabilities	(8,737)
Net assets acquired	$	88,457

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


	Amount allocated		Useful life (in years)

Goodwill - non-deductible	$	62,487	na
Customer intangibles	18,892		12	-	15
Unpatented technologies	9,710		7	-	8
Patents	6,006		9
Trademarks	4,306		15

	$	101,401

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2020 Acquisitions

During the six months ended June 30, 2020, the Company acquired three businesses in separate transactions for total consideration of $238,839, 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 is deductible for U.S. income tax purposes and goodwill in the amount of $112,178 is non-deductible for U.S. income tax purposes for these acquisitions.

On April 30, 2020, the Company acquired 100% of the voting stock of ~~Em-tec~~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 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, 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 and intangible assets of $76,100, primarily related to customer intangibles.

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

~~Total~~

~~Current assets, net of cash acquired~~

~~25,699~~

~~Property, plant and equipment~~

~~3,783~~

~~Goodwill~~

~~145,337~~

~~Intangible assets~~

~~97,244~~

~~Current liabilities~~

~~(18,380)~~

~~Other liabilities~~

~~(14,844)~~

~~Net assets acquired~~

~~238,839~~

~~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)~~

~~2019 Acquisitions~~

During the six months ended June 30, 2019, the Company acquired two businesses in separate transactions for total consideration of $215,304, net of cash acquired. 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 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.

~~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 months ended June 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~~of the ~~three~~2021 and ~~six months ended June 30,~~ 2020 ~~and 2019 were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Revenue:
As reported $ 1,499,175 $ 1,810,706 $ 3,155,114 $ 3,535,463
Pro forma 1,502,018 1,828,174 3,165,053 3,575,903
Net earnings:
As reported $ 124,766 $ 198,085 $ 301,045 $ 303,790
Pro forma 128,377 198,659 308,844 304,881
acquisitions are not material to the Company's Consolidated Statements of Earnings.

4. Disposed Operations

Management evaluates Dover's businesses periodically for their strategic fit within its operations and may from time to time sell or discontinue certain operations for various reasons.

2021

There were no dispositions for the six months ended June 30, 2021.

2020

On March 6, 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company. The Company recognized ~~total~~a net consideration of $15,400, which included a working capital adjustment recognized in the second quarter ~~to be~~and paid in the third quarter of 2020. This sale resulted in a pre-tax gain on sale of $5,770 included within the Condensed Consolidated Statements of Earnings and within the Refrigeration & Food Equipment Segment for the six months ended June 30, 2020. The sale ~~does~~did not represent a strategic shift that ~~will have~~had a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

~~2019~~

5. Inventories, net

On ~~March 29, 2019, the Co~~mpany entered into a definitive agreement to sell Finder Pompe S.r.l ("Finder"), a wholly owned subsidiary, to Gruppo Aturia S.p.A (“Aturia”). As of March 31, 2019, Finder met the criteria to be classified as held for sale. The Company classified Finder's assets and liabilities separately on the consolidated balance sheet as of March 31, 2019.

Based on the total consideration from the sale, net of selling costs, the Company recorded a loss on the assets held for sale of $46,946 in the Condensed Consolidated Statements of Earnings during the three months ended March 31, 2019. ~~The loss was comprised of an impairment on assets held for sale of $21,607 and $25,339 of foreign currency translation losses reclassified out of accumulated other comprehensive losses.~~

On April 2, 2019, Dover completed the sale of Finder to Aturia, which generated total cash proceeds of $24,218. The Finder business was included in the results of the Pumps & Process Solutions segment. The sale does 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.


	June 30, 2021		December 31, 2020
Raw materials	$	569,178	$	497,604
Work in progress	206,293		152,360
Finished goods	332,474		304,760
Subtotal	1,107,945		954,724
Less reserves	(130,114)		(118,920)
Total	$	977,831	$	835,804

~~5. Inventories~~

June 30, 2020 December 31, 2019
Raw materials $ 510,602 $ 467,912
Work in progress 177,100 162,670
Finished goods 312,202 280,051
Subtotal 999,904 910,633
Less reserves (113,932) (104,492)
Total $ 885,972 $ 806,141

6. Property, Plant and Equipment, net

June 30, 2020 December 31, 2019
Land $ 57,857 $ 56,583
Buildings and improvements 541,860 527,192
Machinery, equipment and other 1,687,048 1,648,354
Property, plant and equipment, gross 2,286,765 2,232,129
Accumulated depreciation (1,428,491) (1,389,811)
Property, plant and equipment, net $ 858,274 $ 842,318


	June 30, 2021		December 31, 2020
Land	$	61,598	$	60,287
Buildings and improvements	571,326		570,366
Machinery, equipment and other	1,797,637		1,772,772
Property, plant and equipment, gross	2,430,561		2,403,425
Accumulated depreciation	(1,535,010)		(1,506,099)
Property, plant and equipment, net	$	895,551	$	897,326

Depreciation expense totaled ~~$33,365~~$36,045 and ~~$33,031~~$33,365 for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, depreciation expense was ~~$67,920~~$74,239 and ~~$65,219,~~$67,920, respectively.

7. Credit Losses

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

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

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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 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~~
~~Amounts written off charged against the allowance~~	~~(1,490)~~
~~Other, including dispositions and foreign currency translation~~	~~(317)~~
~~Ending balance, June 30~~	$	~~38,825~~

~~8. Goodwill and Other Intangible Assets~~

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

Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Total
Balance at December 31, 2019 $ 636,571 $ 873,381 $ 977,069 $ 750,627 $ 545,699 $ 3,783,347
Acquisitions 33,159 — 92,606 19,572 — 145,337
Disposition of business — — — — (2,597) (2,597)
Foreign currency translation 390 (10,775) 3,722 237 190 (6,236)
Balance at June 30, 2020 $ 670,120 $ 862,606 $ 1,073,397 $ 770,436 $ 543,292 $ 3,919,851

During the six months ended June 30, 2020, the Company recorded additions of $145,337 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 months ended June 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 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.


	2021		2020
Beginning Balance, December 31 of the Prior Year	$	40,474	$	29,381
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings	0		2,706
Provision for expected credit losses, net of recoveries	2,209		8,545
Amounts written off charged against the allowance	(2,460)		(1,490)
Other, including dispositions and foreign currency translation	311		(317)
Ending balance, June 30	$	40,534	$	38,825

1110

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

8. Goodwill and Other Intangible Assets

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


	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Total
Balance at December 31, 2020	$	682,985	$	940,973	$	1,117,589	$	786,280	$	544,715	$	4,072,542
Acquisitions	0		26,495		19,705		16,287		0		62,487
Purchase price adjustments	0		1,084		(1,926)		0		0		(842)

Foreign currency translation	(1,958)		5,022		(9,007)		(1,190)		(363)		(7,496)
Balance at June 30, 2021	$	681,027	$	973,574	$	1,126,361	$	801,377	$	544,352	$	4,126,691

During the six months ended June 30, 2021, the Company recognized additions of $62,487 to goodwill as a result of acquisitions as discussed in Note 3 — Acquisitions. During the six months ended June 30, 2021, the Company recorded purchase price adjustments that reduced goodwill by $842, principally related to working capital adjustments for 2020 acquisitions within the Fueling Solutions and Imaging & Identification segments.

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

June 30, 2020 December 31, 2019
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Amortized intangible assets:
Customer intangibles $ 1,491,875 $ 764,239 $ 727,636 $ 1,410,636 $ 714,566 $ 696,070
Trademarks 224,109 93,667 130,442 218,064 85,791 132,273
Patents 160,200 136,491 23,709 159,376 133,677 25,699
Unpatented technologies 166,681 104,655 62,026 154,505 99,276 55,229
Distributor relationships 82,196 47,159 35,037 82,779 44,202 38,577
Drawings & manuals 27,327 23,381 3,946 27,500 22,403 5,097
Other 23,508 18,114 5,394 22,355 16,939 5,416
Total 2,175,896 1,187,706 988,190 2,075,215 1,116,854 958,361
Unamortized intangible assets:
Trademarks 96,644 — 96,644 96,653 — 96,653
Total intangible assets, net $ 2,272,540 $ 1,187,706 $ 1,084,834 $ 2,171,868 $ 1,116,854 $ 1,055,014


	June 30, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets:
Customer intangibles	$	1,572,396	$	880,801	$	691,595	$	1,559,771	$	834,798	$	724,973
Trademarks	237,022		111,620		125,402		233,205		103,907		129,298
Patents	168,644		143,022		25,622		163,299		141,182		22,117
Unpatented technologies	189,731		118,689		71,042		180,947		113,404		67,543
Distributor relationships	86,888		54,077		32,811		87,028		51,611		35,417
Drawings and manuals	28,581		26,862		1,719		29,198		26,193		3,005
Other	23,996		19,915		4,081		23,901		19,324		4,577
Total	2,307,258		1,354,986		952,272		2,277,349		1,290,419		986,930
Unamortized intangible assets:
Trademarks	96,837		0		96,837		96,842		0		96,842
Total intangible assets, net	$	2,404,095	$	1,354,986	$	1,049,109	$	2,374,191	$	1,290,419	$	1,083,772

~~Amortization~~For the three months ended June 30, 2021 and 2020, amortization expense was ~~$34,238~~$35,474 and ~~$34,738,~~$34,238, respectively, including acquisition-related intangible amortization of ~~$33,829~~$35,048 and ~~$34,219 for the three months ended June 30, 2020 and 2019,~~$33,829, respectively. For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, amortization expense was ~~$68,435~~$71,086 and ~~$70,288,~~$68,435, respectively, including acquisition-related intangible amortization of ~~$67,646~~$70,221 and ~~$69,374,~~$67,646, respectively.

~~9. Restructuring Activities~~

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

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Engineered Products $ 4,160 $ 1,122 $ 4,518 $ 1,201
Fueling Solutions 911 1,776 2,386 2,514
Imaging & Identification (522) 1,386 (266) 1,677
Pumps & Process Solutions 4,706 501 8,552 882
Refrigeration & Food Equipment 2,213 227 2,773 1,639
Corporate 816 726 1,662 761
Total $ 12,284 $ 5,738 $ 19,625 $ 8,674
These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services $ 7,557 $ 1,183 $ 9,099 $ 2,362
Selling, general and administrative expenses 4,727 4,555 10,526 6,312
Total $ 12,284 $ 5,738 $ 19,625 $ 8,674

~~The restructuring expenses of $12,284 and $19,625 incurred during the three and six months ended June 30, 2020, respectively, were a result of restructuring programs initiated primarily in~~ 2020. Restructuring expense was comprised primarily of new actions 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. 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)

9. Restructuring Activities

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Engineered Products	$	4,339	$	4,160	$	8,330	$	4,518
Fueling Solutions	1,415		911		1,464		2,386
Imaging & Identification	174		(522)		864		(266)
Pumps & Process Solutions	904		4,706		887		8,552
Refrigeration & Food Equipment	2,283		2,213		3,344		2,773
Corporate	321		816		982		1,662
Total	$	9,436	$	12,284	$	15,871	$	19,625

These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
Cost of goods and services	$	4,839	$	7,557	$	8,746	$	9,099
Selling, general and administrative expenses	4,597		4,727		7,125		10,526
Total	$	9,436	$	12,284	$	15,871	$	19,625

The restructuring expenses of $9,436 and $15,871 incurred during the three and six months ended June 30, 2021 were primarily the result of restructuring programs initiated in 2020 and 2021 in response to demand conditions, asset charges related to a product line exit and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization. Additional programs, beyond the scope of the announced programs, may be implemented during 2021 with related restructuring charges.

The $9,436 of restructuring charges incurred during the second quarter of 2021 primarily included the following items:

•The Engineered Products segment recorded $4,339 of restructuring charges related principally to asset charges related to a product line exit.

•The Fueling Solutions segment recorded $1,415 of restructuring charges primarily due to headcount reductions.

•The Imaging & Identification segment recorded a restructuring ~~benefit~~charges of ~~$522~~$174 principally related to ~~updated headcount reduction estimates.~~asset charges of a production plant exit.

•The Pumps & Process Solutions segment recorded ~~$4,706~~$904 of restructuring ~~expense~~charges primarily ~~due~~related to headcount ~~reductions and facility restructuring costs.~~reductions.

•The Refrigeration & Food Equipment segment recorded ~~$2,213~~$2,283 of restructuring expense primarily due to headcount ~~reductions and facility restructuring costs.~~reductions.

•Corporate recorded ~~$816~~$321 of restructuring charges primarily related to ~~headcount reductions and associated~~ exit costs ~~related to~~associated with IT centralization initiatives.

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


		Severance		Exit			Total			Severance		Exit			Total
Balance at December 31, 2019		$	13,751	$	2,639		$	16,390
Balance at December 31, 2020									Balance at December 31, 2020	$	10,547	$	4,366		$	14,913
Restructuring charges	Restructuring charges	13,714		5,911			19,625		Restructuring charges	6,680		9,191			15,871
Payments	Payments	(17,070)		(2,293)			(19,363)		Payments	(7,483)		(3,625)			(11,108)

Other, including foreign currency translation	Other, including foreign currency translation	372		(4,045)		⁽¹⁾	(3,673)		Other, including foreign currency translation	(66)		(6,718)		(1)	(6,784)
Balance at June 30, 2020		$	10,767	$	2,212		$	12,979
Balance at June 30, 2021									Balance at June 30, 2021	$	9,678	$	3,214		$	12,892

⁽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
Short-term
Commercial paper $ 505,000 $ 84,700
Notes payable $ 505,000 $ 84,700

Carrying amount ⁽¹⁾
Principal June 30, 2020 December 31, 2019
Long-term
3.15% 10-year notes due November 15, 2025 $ 400,000 $ 396,379 $ 396,042
1.25% 10-year notes due November 9, 2026 (euro-denominated) € 600,000 665,896 658,089
0.750% 8-year notes due November 4, 2027 (euro denominated) € 500,000 554,458 548,008
6.65% 30-year debentures due June 1, 2028 $ 200,000 199,205 199,155
2.950% 10-year notes due November 4, 2029 $ 300,000 296,460 296,270
5.375% 30-year debentures due October 15, 2035 $ 300,000 296,185 296,060
6.60% 30-year notes due March 15, 2038 $ 250,000 247,996 247,939
5.375% 30-year notes due March 1, 2041 $ 350,000 344,291 344,153
Total long-term debt $ 3,000,870 $ 2,985,716

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

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

asset charges related to a product line exit.

1312

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

10. Borrowings

Borrowings consisted of the following:


			Carrying amount (1)
	Principal		June 30, 2021		December 31, 2020
Long-term
3.15% 10-year notes due November 15, 2025	$	400,000	$	397,053	$	396,716
1.25% 10-year notes due November 9, 2026 (euro-denominated)	€	600,000	709,887		724,310
0.750% 8-year notes due November 4, 2027 (euro denominated)	€	500,000	591,052		603,107
6.65% 30-year debentures due June 1, 2028	$	200,000	199,305		199,255
2.950% 10-year notes due November 4, 2029	$	300,000	296,839		296,650
5.375% 30-year debentures due October 15, 2035	$	300,000	296,434		296,309
6.60% 30-year notes due March 15, 2038	$	250,000	248,109		248,053
5.375% 30-year notes due March 1, 2041	$	350,000	344,567		344,429



Total long-term debt			$	3,083,246	$	3,108,829

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

$16.4 million and $17.6 million as of June 30, 2021 and December 31, 2020, respectively. Total deferred debt issuance costs were $13.5 million and $14.4 million as of June 30, 2021 and December 31, 2020, respectively.

As of June 30, ~~2020,~~2021, the Company maintained a $1.0 billion five-year unsecured revolving credit facility (the "Credit Agreement") with a syndicate of banks which expires on October 4, 2024. ~~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. Proceeds from the borrowing were used to repay all of~~At the Company's ~~outstanding commercial paper and for general corporate purposes. As of June 30, 2020, the Company repaid the $500 million borrowed~~election, loans 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 expire~~s 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 whichwill bear interest at a base rate plus ~~a specified~~an 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.~~uses the Credit Agreement principally as liquidity back-up for its commercial paper program and for general corporate purposes.

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 30, ~~2020~~2021 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of ~~10.7~~13.9 to 1.

As of June 30, ~~2020,~~2021, the Company had approximately ~~$174.7~~$153.2 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 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had contracts with total notional amounts of ~~$157,510~~$184,212 and ~~$179,580,~~$173,674, respectively, to exchange currencies, principally Euro, Pound Sterling, Swedish Krona, Chinese Yuan, Canadian Dollar, and Swiss Franc. The Company believes it is probable that all forecasted cash flow transactions will occur.

In addition, the Company had outstanding contracts with a total notional amount of ~~$91,419~~$90,842 and ~~$79,707~~$73,755 as of June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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.

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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 sets forth the fair values of derivative instruments held by the Company as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 and the balance sheet lines in which they are recorded:


		Fair Value Asset (Liability)								Fair Value Asset (Liability)
		June 30, 2020		December 31, 2019		Balance Sheet Caption		June 30, 2021		December 31, 2020		Balance Sheet Caption
Foreign currency forward	Foreign currency forward	$	1,792	$	2,892	Prepaid and other current assets	Foreign currency forward	$	2,191	$	2,325	Prepaid and other current assets
Foreign currency forward	Foreign currency forward	(2,112)		(476)		Other accrued expenses	Foreign currency forward	(549)		(2,057)		Other accrued expenses

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

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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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
(Loss) gain on euro-denominated debt	$	(18,894)	$	(36,904)	$	27,539	$	(13,280)
Tax benefit (expense)	4,269		8,028		(6,223)		2,889
Net (loss) gain on net investment hedges, net of tax	$	(14,625)	$	(28,876)	$	21,316	$	(10,391)

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.

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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 the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

June 30, 2020

December 31, 2019

June 30, 2021

December 31, 2020

Level 2

Assets:

Foreign currency cash flow hedges

1,792

2,892

Foreign currency cash flow hedges

2,191

2,325

Liabilities:

Foreign currency cash flow hedges

2,112

476

Foreign currency cash flow hedges

549

2,057

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

The estimated fair value of long-term debt ~~net~~ at June 30, ~~2020~~2021 and December 31, ~~2019~~2020, was ~~$3,421,108~~$3,555,797 and ~~$3,322,033,~~$3,635,673, respectively. The estimated fair value of long-term debt is based on quoted market prices for similar instruments and is, therefore, classified as Level 2 within the fair value hierarchy.

The carrying values of cash and cash equivalents, trade receivables, accounts payable and notes payable are reasonable estimates of their fair values as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 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 30, 2021 and 2020 ~~and 2019~~ were ~~20.4%~~18.2% and ~~20.7%~~20.4%, respectively. The decrease in the effective tax rate for the three months ended June 30, ~~2020~~2021 relative to the prior comparable period iswas primarily driven by favorable audit settlements.

The effective tax rates for the six months ended June 30, 2021 and 2020 were 18.8% and ~~2019 were~~ 18.7% ~~and 21.7%~~, respectively. The ~~decrease~~increase in the effective tax rate for the six months ended June 30, ~~2020~~2021 relative to the prior year comparable period iswas primarily driven by ~~the favorable audit settlements and the impact of the exclusion of capital loss on the sale of Finder under local law~~an increase in ~~2019.~~earnings base.

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~~$3.7 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 months ended June 30, ~~2020,~~2021, the Company issued stock-settled appreciation rights ("SARs") covering ~~390,780~~412,531 shares, performance share awards of ~~49,056~~50,371 and restricted stock units ("RSUs") of ~~79,024.~~83,001.

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.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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


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

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

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

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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 months ended June 30, 2020:~~


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


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

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

The 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 June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
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	$	6,872	$	4,968	$	18,393	$	8,220
Tax benefit	Tax benefit	(619)		(498)		(968)		(1,546)		Tax benefit	(559)		(619)		(1,781)		(968)
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	$	6,313	$	4,349	$	16,612	$	7,252

The increase in stock-based compensation expense for the six months ended June 30, 2021 compared to the prior comparable period was primarily due to plan amendments in the current year accelerating the vesting on shares awarded to retirement-eligible employees in the first quarter of the current year, as well as lower performance share attainment rates in the prior year.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

14. Commitments and Contingent Liabilities

Litigation

Certain of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites identified under federal and state statutes that provide for the allocation of such costs among "potentially responsible parties." In each instance, the extent of the Company’s liability appears to be very small in relation to the total projected expenditures and the number of other "potentially responsible parties" involved and is anticipated to be immaterial to the Company. In addition, certain of the Company’s subsidiaries are involved in ongoing remedial activities at certain current and former plant sites, in cooperation with regulatory agencies, and appropriate estimated liabilities have been established. At June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company had estimated liabilities totaling ~~$31,892~~$28,921 and ~~$30,608,~~$30,431, respectively, for environmental and other matters, including private party claims for exposure to hazardous substances that are probable and estimable.

The Company and certain of its subsidiaries are also parties to a number of other legal proceedings incidental to their businesses. These proceedings primarily involve claims by private parties alleging injury arising out of use of the Company’s products, patent infringement, employment matters, and commercial disputes. Management and legal counsel, at least quarterly, review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and currently

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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 30, ~~2020~~2021 and December 31, ~~2019,~~2020, these estimated liabilities were not significant. While it is not possible at this time to predict the outcome of these legal actions, in the opinion of management, based on the aforementioned reviews, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on its financial position, results of operations, or cash flows.

Warranty Accruals

Estimated warranty program claims are provided for at the time of sale of the Company's products. Amounts provided for are based on historical costs and adjusted for new claims and are included within other accrued expenses and other liabilities in the Condensed Consolidated Balance Sheet. The changes in the carrying amount of product warranties through June 30, ~~2020~~2021 and ~~2019,~~2020, were as follows:


		2020		2019			2021		2020
Beginning Balance, December 31 of the Prior Year	Beginning Balance, December 31 of the Prior Year	$	49,116	$	50,073	Beginning Balance, December 31 of the Prior Year	$	51,088	$	49,116
Provision for warranties	Provision for warranties	25,341		29,364		Provision for warranties	34,900		25,341
Settlements made	Settlements made	(28,104)		(31,173)		Settlements made	(34,424)		(28,104)
Other adjustments, including acquisitions and currency translation	Other adjustments, including acquisitions and currency translation	(455)		(632)		Other adjustments, including acquisitions and currency translation	(528)		(455)
Ending balance, June 30	Ending balance, June 30	$	45,898	$	47,632	Ending balance, June 30	$	51,036	$	45,898

15. Employee Benefit Plans

Retirement Plans

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

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

~~Qualified Defined Benefits~~

Three Months Ended June 30, Six Months Ended June 30,
U.S. Plan Non-U.S. Plans U.S. Plan Non-U.S. Plans
2020 2019 2020 2019 2020 2019 2020 2019
Service cost $ 1,706 $ 1,754 $ 1,295 $ 1,291 $ 3,412 $ 3,508 $ 2,588 $ 2,836
Interest cost 4,068 4,756 796 1,207 8,136 9,513 1,621 2,448
Expected return on plan assets (7,869) (8,534) (1,637) (1,608) (15,738) (17,068) (3,314) (3,126)
Amortization:
Prior service cost (credit) 57 76 (120) (138) 114 151 (239) (196)
Recognized actuarial loss 1,884 — 735 708 3,768 — 1,476 1,525
Net periodic (income) expense $ (154) $ (1,948) $ 1,069 $ 1,460 $ (308) $ (3,896) $ 2,132 $ 3,487

1817

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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~~

Qualified Defined Benefits

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Service cost $ 318 $ 486 $ 636 $ 971
Interest cost 442 668 883 1,335
Amortization:
Prior service cost 424 703 848 1,406
Recognized actuarial gain (465) (570) (929) (1,140)
Net periodic expense $ 719 $ 1,287 $ 1,438 $ 2,572


	Three Months Ended June 30,								Six Months Ended June 30,
	U.S. Plan				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
	2021		2020		2021		2020		2021		2020		2021		2020
Service cost	$	1,784	$	1,706	$	1,397	$	1,295	$	3,567	$	3,412	$	2,839	$	2,588
Interest cost	3,401		4,068		695		796		6,803		8,136		1,363		1,621
Expected return on plan assets	(7,245)		(7,869)		(1,820)		(1,637)		(14,490)		(15,738)		(3,619)		(3,314)
Amortization:
Prior service cost (credit)	53		57		(162)		(120)		106		114		(330)		(239)
Recognized actuarial loss	2,503		1,884		989		735		5,006		3,768		1,989		1,476



Net periodic expense (income)	$	496	$	(154)	$	1,099	$	1,069	$	992	$	(308)	$	2,242	$	2,132

~~Post-Retirement Benefit Plans~~

Non-Qualified Supplemental Benefits

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,
2020 2019 2020 2019
Service cost $ 5 $ 5 $ 10 $ 10
Interest cost 61 78 121 156
Amortization:
Prior service cost 4 3 7 7
Recognized actuarial gain (4) (16) (8) (35)
Net periodic expense $ 66 $ 70 $ 130 $ 138

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Service cost	$	390	$	318	$	781	$	636
Interest cost	308		442		616		883
Amortization:
Prior service cost	383		424		766		848
Recognized actuarial gain	(418)		(465)		(836)		(929)

Net periodic expense	$	663	$	719	$	1,327	$	1,438

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,~~$16,052 and ~~$13,247~~$12,493 for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$26,541~~$31,113 and ~~$26,153~~$26,541 for the six months ended June 30, 2021 and 2020, ~~and 2019.~~respectively.

16. Other Comprehensive Earnings

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

Three Months Ended Three Months Ended
June 30, 2020 June 30, 2019
Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Foreign currency translation adjustments $ 36,541 $ 8,028 $ 44,569 $ (14,967) $ 989 $ (13,978)
Pension and other post-retirement benefit plans 2,515 (421) 2,094 766 (177) 589
Changes in fair value of cash flow hedges 1,651 (365) 1,286 (4,780) 1,002 (3,778)
Total other comprehensive (loss) earnings $ 40,707 $ 7,242 $ 47,949 $ (18,981) $ 1,814 $ (17,167)

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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
June 30, 2020 June 30, 2019
Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Foreign currency translation adjustments $ (51,874) $ 2,889 $ (48,985) $ 34,819 $ 242 $ 35,061
Pension and other post-retirement benefit plans 5,037 (989) 4,048 1,718 (382) 1,336
Changes in fair value of cash flow hedges (3,423) 757 (2,666) (1,787) 373 (1,414)
Total other comprehensive (loss) earnings $ (50,260) $ 2,657 $ (47,603) $ 34,750 $ 233 $ 34,983

~~Total comprehensive earnings were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net earnings $ 124,766 $ 198,085 $ 301,045 $ 303,790
Other comprehensive (loss) earnings 47,949 (17,167) (47,603) 34,983
Comprehensive earnings $ 172,715 $ 180,918 $ 253,442 $ 338,773

Amounts reclassified from accumulated other comprehensive loss to earnings during the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020 were as follows:

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Foreign currency translation:
Reclassification of foreign currency translation losses to earnings for assets held for sale $ — $ — $ — $ 25,339
Tax benefit — — — —
Net of tax $ — $ — $ — $ 25,339
Pension and other postretirement benefit plans:
Amortization of actuarial losses $ 2,150 $ 122 $ 4,307 $ 350
Amortization of prior service costs 365 644 730 1,368
Total before tax 2,515 766 5,037 1,718
Tax benefit (421) (177) (989) (382)
Net of tax $ 2,094 $ 589 $ 4,048 $ 1,336
Cash flow hedges:
Net losses (gains) reclassified into earnings $ (752) $ (524) $ 668 $ (815)
Tax (benefit) provision 158 108 (140) 169
Net of tax $ (594) $ (416) $ 528 $ (646)

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020




Pension plans:
Amortization of actuarial losses	$	3,074	$	2,150	$	6,159	$	4,307
Amortization of prior service costs	277		365		548		730

Total before tax	3,351		2,515		6,707		5,037
Tax benefit	(774)		(421)		(1,548)		(989)
Net of tax	$	2,577	$	2,094	$	5,159	$	4,048
Cash flow hedges:
Net (gains) losses reclassified into earnings	$	(1,877)	$	(752)	$	(3,710)	$	668
Tax provision (benefit)	417		158		839		(140)
Net of tax	$	(1,460)	$	(594)	$	(2,871)	$	528

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.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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 industrial pumps, fluid handling components, plastics and polymer processing equipment, single use pumps, flow meters and connectors for biopharma and other hygienic applications, 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.

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DOVER CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenue:	Revenue:									Revenue:
Engineered Products	Engineered Products	$	342,380	$	429,928	$	750,540	$	848,779	Engineered Products	$	442,091	$	342,380	$	870,218	$	750,540
Fueling Solutions	Fueling Solutions	326,495		390,586		686,477		763,636		Fueling Solutions	437,042		326,495		826,720		686,477
Imaging & Identification	Imaging & Identification	227,977		266,588		484,742		534,942		Imaging & Identification	294,076		227,977		578,404		484,742
Pumps & Process Solutions	Pumps & Process Solutions	309,095		338,924		628,631		669,143		Pumps & Process Solutions	428,701		309,095		823,078		628,631
Refrigeration & Food Equipment	Refrigeration & Food Equipment	293,527		385,474		605,440		720,117		Refrigeration & Food Equipment	430,506		293,527		802,583		605,440
Intra-segment eliminations	Intra-segment eliminations	(299)		(794)		(716)		(1,154)		Intra-segment eliminations	(740)		(299)		(1,426)		(716)
Total consolidated revenue	Total consolidated revenue	$	1,499,175	$	1,810,706	$	3,155,114	$	3,535,463	Total consolidated revenue	$	2,031,676	$	1,499,175	$	3,899,577	$	3,155,114
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	$	62,720	$	47,702	$	131,499	$	116,796
Fueling Solutions	Fueling Solutions	47,214		52,637		100,712		89,867		Fueling Solutions	78,755		47,214		145,235		100,712
Imaging & Identification	Imaging & Identification	38,046		54,641		89,528		110,596		Imaging & Identification	60,747		38,046		117,739		89,528
Pumps & Process Solutions ⁽²⁾	Pumps & Process Solutions ⁽²⁾	67,702		76,278		133,781		91,269		Pumps & Process Solutions ⁽²⁾	138,632		67,702		262,277		133,781
Refrigeration & Food Equipment⁽³⁾⁽²⁾	Refrigeration & Food Equipment⁽³⁾⁽²⁾	11,459		44,375		34,988		69,182		Refrigeration & Food Equipment⁽³⁾⁽²⁾	48,971		11,459		87,088		34,988
Total segment earnings (EBIT)	Total segment earnings (EBIT)	212,123		305,060		475,805		505,162		Total segment earnings (EBIT)	389,825		212,123		743,838		475,805
Corporate expense / other ⁽⁴⁾⁽³⁾	Corporate expense / other ⁽⁴⁾⁽³⁾	27,311		24,512		51,408		55,378		Corporate expense / other ⁽⁴⁾⁽³⁾	40,762		27,311		79,382		51,408
Interest expense	Interest expense	28,711		31,754		55,979		63,562		Interest expense	26,661		28,711		53,484		55,979
Interest income	Interest income	(728)		(945)		(1,911)		(1,835)		Interest income	(942)		(728)		(1,622)		(1,911)
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	323,344		156,829		612,594		370,329
Provision for income taxes	Provision for income taxes	32,063		51,654		69,284		84,267		Provision for income taxes	58,836		32,063		115,317		69,284
Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	264,508	$	124,766	$	497,277	$	301,045

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

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

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

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


	Three Months Ended June 30,				Six Months Ended June 30,
Revenue by geography	2021		2020		2021		2020
United States	$	1,091,015	$	852,999	$	2,127,029	$	1,809,639
Europe	459,074		320,076		904,369		681,242
Asia	236,008		164,009		428,115		318,284
Other Americas	171,891		112,995		302,068		242,044
Other	73,688		49,096		137,996		103,905
Total	$	2,031,676	$	1,499,175	$	3,899,577	$	3,155,114

18. Share Repurchases

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

In the first quarter of 2021, the Company repurchased 182,951 shares of common stock at a total cost of $21,637, or $118.27 per share. There were no repurchases during the three months ended June 30, 2021. 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. There were no repurchases during the three months ended June 30, 2020.

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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,
Revenue by geography 2020 2019 2020 2019
United States $ 852,999 $ 960,906 $ 1,809,639 $ 1,880,798
Europe 320,076 405,274 681,242 807,919
Asia 164,009 198,278 318,284 394,628
Other Americas 112,995 178,216 242,044 316,334
Other 49,096 68,032 103,905 135,784
Total $ 1,499,175 $ 1,810,706 $ 3,155,114 $ 3,535,463

~~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 in no repurchases under the February 2018 authorization during the three months ended June 30, 2020. The Company lifted this suspension beginning in the second half of the year. There were no share repurchases during the three and six months ended June 30, 2019.

As of June 30, ~~2020, 7,811,385~~2021, 19,817,049 shares remain authorized for repurchase under the ~~February 2018~~November 2020 share repurchase authorization.

19. Earnings per Share

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020

Net earnings	Net earnings	$	124,766	$	198,085	$	301,045	$	303,790	Net earnings	$	264,508	$	124,766	$	497,277	$	301,045
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	$	1.84	$	0.87	$	3.46	$	2.09

Weighted average shares outstanding	Weighted average shares outstanding	143,955,000		145,366,000		144,107,000		145,227,000		Weighted average shares outstanding	143,941,000		143,955,000		143,854,000		144,107,000
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	$	1.82	$	0.86	$	3.43	$	2.07

Weighted average shares outstanding	Weighted average shares outstanding	144,995,000		147,179,000		145,359,000		147,041,000		Weighted average shares outstanding	145,118,000		144,995,000		145,040,000		145,359,000

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,
2020 2019 2020 2019
Weighted average shares outstanding - Basic 143,955,000 145,366,000 144,107,000 145,227,000
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
Weighted average shares outstanding - Diluted 144,995,000 147,179,000 145,359,000 147,041,000


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Weighted average shares outstanding - Basic	143,941,000	143,955,000	143,854,000	144,107,000
Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs	1,177,000	1,040,000	1,186,000	1,252,000
Weighted average shares outstanding - Diluted	145,118,000	144,995,000	145,040,000	145,359,000

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.

There were no anti-dilutive potential common shares excluded from the calculation above for the three months ended June 30, 2021. 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,~~34,000 and 130,000 ~~and 1,200~~ for the six months ended June 30, 2021 and 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)~~

20. Recent Accounting Pronouncements

Recently ~~Adopted~~Issued Accounting Standards

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

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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 months ended June 30, 2020. The outlook 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 improving sequential revenue and bookings trends in the second quarter, we anticipate that activity will improve in the third quarter. However, we do not expect to return to normal levels or growth for the remainder of the year across most of our impacted businesses.

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 industrial pumps, fluid handling components, plastics and polymer processing equipment, single use pumps, flow meters and connectors for biopharma and other hygienic applications, 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 quarter of ~~2020,~~2021, revenue was ~~$1.5~~$2.0 billion, which ~~decreased $311.5~~increased $532.5 million, or ~~17.2%~~35.5%, as compared to the second quarter of ~~2019.~~2020. This was driven by an organic revenue ~~decline~~growth of ~~16.0%~~29.7%, ~~an unfavorable~~a favorable impact from foreign currency translation of ~~1.2%~~4.5%, and ~~a 0.7% impact due to dispositions. This decline was partially offset by~~ acquisition-related revenue growth of ~~0.7%~~1.3%.

The ~~16.0%~~29.7% organic revenue ~~decline compared to~~growth for the second quarter of ~~2019~~2021 was broad-based across our segments ~~due to~~as market conditions and demand improved from the ~~slowing demand environment~~adverse impact of COVID-19 in ~~many~~the prior year. The Engineered Products segment had organic revenue growth of 25.4% primarily as a result of strength in our ~~end-markets~~vehicle services, industrial automation, industrial winch and hoist, and aerospace and defense businesses, whereas our waste handling business was flat year-over-year on component part disruptions and timing of orders. The Fueling Solutions segment had organic revenue growth of 24.9% driven by ~~the global response to the outbreak~~sustained strength in retail fueling and vehicle wash solutions. The Imaging & Identification segment experienced growth in organic revenue of ~~COVID-19.~~20.2% driven by increased demand in marking and coding and digital textile printing end markets. The Pumps & Process Solutions segment had organic revenue growth of 33.6% as a result of strength in biopharma pumps and connectors, and increased demand for industrial pumps, and plastics and polymer processing solutions. The Refrigeration & Food Equipment segment ~~experienced~~posted organic revenue ~~decline~~growth of ~~20.2% on weaker demand for commercial foodservice equipment and postponement of store remodels and shipments~~43.5% across all end markets, principally driven by the increased activity in food retail, ~~while the~~can making, and heat ~~exchanger~~ ~~business~~exchangers end markets, as well as new product roll-outs and customer wins.

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showed relative resilience. The Engineered Products segment had a decline in organic revenue of 20.1% primarily as a result of significantly weaker demand in our vehicle service, industrial automation and fluid dispensing businesses, while aerospace & defense and waste handling showed relative resilience. The Fueling Solutions segment saw a decline in organic revenue of 14.8% driven by slowing demand in retail fueling markets in Europe and Asia, as well as weaker activity in the transportation and vehicle wash markets, partially offset by strong ~~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. The Pumps & Process Solutions segment had a decline in organic revenue of 8.8% as a result of slowing demand in the oil & gas and general industrial end-markets, partially offset by strong growth in the biopharma and hygienic markets.

From a geographic perspective, in the second quarter, organic revenue for the U.S., our largest market, ~~declined 10%, while organic revenue in Europe and Asia declined 19% and 14%, respectively, year over year.~~increased 25.0%. Organic revenue in Asia and Europe grew 37.6% and 29.8%, respectively. This organic growth was broad-based, with all ~~other geographic markets declined 33%. Four out~~our segments posting increased sales in North America, Europe, Asia and Latin America, as global demand continued to improve after the impact of ~~our five segments~~operational and economic headwinds of COVID-19 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~~ in the second quarter was broad-based across all segments as the region faced significant operational and demand headwinds from the COVID-19 pandemic. The decline in Asia was driven mainly by weak activity 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.~~year.

Bookings were ~~$1.4~~$2.4 billion for the three months ended June 30, ~~2020, a decrease~~2021, an increase of ~~$402.6~~$964.0 million, or 68.2% compared to the prior year comparable period. Included in this result was organic ~~decline~~growth of ~~20.6%~~61.2%, ~~an unfavorable~~a favorable impact from foreign currency translation of ~~1.7%~~5.0%, and ~~a 0.6% impact due to dispositions, partially offset by~~ acquisition-related bookings growth of ~~0.7%~~2.0%. ~~The decline~~Bookings grew organically in ~~organic bookings was broad-based across our~~all five segments primarily as a result of strong demand and order intake in most end markets compared to the adverse global impact ~~on customer demand from~~of COVID-19 in the ~~COVID-19 pandemic. Bookings have improved sequentially in June 2020, which may indicate recovering demand, but remained subdued on a year-over-year basis across most of our businesses.~~ prior year.

Backlog as of June 30, ~~2020~~2021 was ~~$1.5~~$2.6 billion, an increase from ~~$1.4~~$1.5 billion ~~from~~in the prior year. See definition of bookings and backlog within "Segment Results of Operations".

During the three ~~mont~~hsmonths ended June 30, ~~2020,~~2021, we acquired ~~Em-tec GmbH~~four businesses in separate transactions for total consideration of $88.5 million, net of cash acquired and including contingent consideration. We acquired AvaLAN Wireless Systems, Incorporated ("~~Em-tec"~~AvaLAN"), a leading provider of secure wireless communications solutions for ~~a purchase price of $30.4~~the convenience and fuel retail industry, for $34.0 million, net of cash acquired. ~~Em-tec is~~AvaLAN enhances the systems and software offerings within our Fueling Solutions segment. We acquired Quantex Arc Limited ("Quantex"), a leading ~~designer~~provider of single-use, recyclable pumps, for $23.9 million, net of cash acquired and ~~manufacturer~~including contingent consideration. Quantex enhances our offering of ~~flow measurement devices that serve a wide array of medical~~single-use pumps for biopharma and ~~biopharmaceutical~~other hygienic applications ~~and will strengthen~~within the ~~portfolio of ou~~r Pumps & Process Solutions ~~segment, particularly in~~segment. We acquired Blue Bite LLC ("Blue Bite"), a leading provider of consumer engagement and brand protection software solutions, for $29.0 million, net of cash acquired and including contingent consideration. Blue Bite strengthens our offering of product traceability and authentication solutions within the ~~biopharma end-market.~~Imaging & Identification segment. One other immaterial acquisition was completed during the three months ended June 30, 2021 within the Pumps & Process Solutions segment.

Rightsizing charges of $10.8 million included restructuring costs of ~~$12.3~~$9.4 million and other costs of ~~$4.6~~$1.3 million for the three months ended June 30, ~~2020.~~2021. Restructuring expense ~~was comprised~~and other rightsizing costs were primarily ~~of new~~related to actions ~~taken~~initiated in 2020 and 2021 in response to ~~lower~~ demand ~~driven by COVID-19 and continuing broad-based selling, general and administrative expense reduction initiatives~~conditions, asset charges related to a product line exit, 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 were comprised primarily of charges related to the restructuring actions and a $3.6 million write-off of assets in our Refrigeration & Food Equipment segment.

COVID-19 Update

~~Over~~The global COVID-19 outbreak and associated countermeasures implemented by governments around the ~~past few months, the COVID-19 pandemic has disrupted the global economy and adversely impacted our business, including demand for our products across multiple end-markets~~world, as well as increased business uncertainty, had an adverse impact on our financial results during 2020 through global shutdowns and supply chain and ~~operations.~~operational disruptions. We ~~expect~~took a variety of actions during 2020 to help mitigate the ~~unfavorable~~financial impact, ~~will continue~~including executing temporary cost savings measures, reducing our capital spending, initiating restructuring actions and proactively managing our working capital. Activity in many of the end markets we serve sequentially improved as 2020 progressed, and this trend continued in the first half of 2021, although demand in certain businesses such as compressor components, foodservice and textile printing is expected to take longer to recover to pre-pandemic levels with continued improvement expected in the second half of ~~2020 as general~~2021. The recovery in demand has had business impacts, including increased material cost inflation (principally steel), labor availability issues, logistics costs increases and ~~economic uncertainty persists~~in some cases component part shortages. Currently our expectation is that the impact of material cost inflation 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 of activity in our markets remain subdued relative to average historical levels and we expect continued impact inlogistics constraints will continue into the second half of ~~2020, albeit continuing a gradual improving trajectory that began at the end of the second quarter.~~2021.

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Our foremost focus has been on the health and safety of our employees ~~business partners~~throughout the pandemic and ~~customers. Beginning late in~~we will continue to maintain enhanced safety protocols and to encourage our employees to seek vaccination. Our core global manufacturing locations remained substantially operational during the first quarter and continuing into the second quarter, we have operated in accordance with established health and safety protocols across our facilities and have instituted an enhanced health and safety compliance program. More specifically, we modified practices at our manufacturing locations and offices to adhere tohalf of 2021. As guidance from authorities such as the U.S. Centers for Disease Control and Prevention ~~and local health and governmental authorities in~~or the World Health Organization evolves, we will update 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 our operational excellence model with robust processes and practices to promote a clean and sanitary working environment, socially distanced operations where possible and a culture 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~~accordingly, 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% of our major global facilities (by count) remained fully operationaldone 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 fully 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, 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.pandemic.

~~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 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 June 30,					Six Months Ended June 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)	2021			2020			% Change		2021			2020			% Change
Revenue	Revenue	$	1,499,175		$	1,810,706		(17.2)	%	$	3,155,114		$	3,535,463		(10.8)	%	Revenue	$	2,031,676		$	1,499,175		35.5	%	$	3,899,577		$	3,155,114		23.6	%
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	1,259,504			947,577			32.9	%	2,405,857			1,991,273			20.8	%
Gross profit	Gross profit	551,598			672,593			(18.0)	%	1,163,841			1,296,135			(10.2)	%	Gross profit	772,172			551,598			40.0	%	1,493,720			1,163,841			28.3	%
Gross profit margin	Gross profit margin	36.8		%	37.1		%	(0.3)		36.9		%	36.7		%	0.2		Gross profit margin	38.0		%	36.8		%	1.2		38.3		%	36.9		%	1.4

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	428,042			366,740			16.7	%	837,040			753,681			11.1	%
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	21.1		%	24.5		%	(3.4)		21.5		%	23.9		%	(2.4)
Loss on assets held for sale		—			—			nm*		—			46,946			nm*

Operating earnings	Operating earnings	184,858			275,959					410,160			444,089					Operating earnings	344,130			184,858					656,680			410,160
Interest expense	Interest expense	28,711			31,754			(9.6)	%	55,979			63,562			(11.9)	%	Interest expense	26,661			28,711			(7.1)	%	53,484			55,979			(4.5)	%
Interest income	Interest income	(728)			(945)			(23.0)	%	(1,911)			(1,835)			4.1	%	Interest income	(942)			(728)			29.4	%	(1,622)			(1,911)			(15.1)	%
Gain on sale of a business	Gain on sale of a business	781			—			nm*		(5,770)			—			nm*		Gain on sale of a business	—			781			nm*		—			(5,770)			nm*
Other income, net	Other income, net	(735)			(4,589)			nm*		(8,467)			(5,695)			nm*		Other income, net	(4,933)			(735)			nm*		(7,776)			(8,467)			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	323,344			156,829			106.2	%	612,594			370,329			65.4	%
Provision for income taxes	Provision for income taxes	32,063			51,654			(37.9)	%	69,284			84,267			(17.8)	%	Provision for income taxes	58,836			32,063			83.5	%	115,317			69,284			66.4	%
Effective tax rate	Effective tax rate	20.4		%	20.7		%	(0.3)		18.7		%	21.7		%	(3.0)		Effective tax rate	18.2		%	20.4		%	(2.2)		18.8		%	18.7		%	0.1

Net earnings	Net earnings	124,766			198,085			(37.0)	%	301,045			303,790			(0.9)	%	Net earnings	264,508			124,766			112.0	%	497,277			301,045			65.2	%

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	$	1.82		$	0.86		111.6	%	$	3.43		$	2.07		65.7	%

* nm - not meaningful

Revenue

Revenue for the three months ended June 30, ~~2020 decreased $311.5~~2021 increased $532.5 million, or ~~17.2%~~35.5%, from the prior year comparable quarter. Results included organic revenue growth of 29.7% across all of our segments as market conditions and demand improved from the adverse impact of COVID-19 in the prior year. Acquisition-related revenue growth was 1.3%, driven mainly by acquisitions in our Fueling Solutions and Imaging & Identification segments, along with a favorable impact from foreign currency translation of 4.5%. Customer pricing favorably impacted revenue by approximately 2.1% in the second quarter of 2021.

Revenue for the six months ended June 30, 2021 increased $744.5 million, or 23.6%, from the comparable period. ~~Results included an~~The increase primarily reflects organic revenue ~~decline~~growth of ~~16.0%~~18.7%, across all of our segments ~~primarily due to~~as market conditions and demand improved from the adverse impact of COVID-19 ~~on our global operations resulting~~ in ~~lower volume and demand.~~ the prior year. Acquisition-related ~~revenue~~ growth ~~of 0.7%,~~was 1.3% led by our Fueling Solutions and 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~~3.8%, slightly offset by a ~~0.7%~~ 0.2% impact from ~~a disposition~~dispositions within the Refrigeration & Food Equipment segment. Customer pricing favorably impacted revenue by approximately ~~0.8% in the second quarter of 2020.~~

~~Revenue~~1.4% for the six months ended June 30, ~~2020 decreased $380.3 million, or 10.8%, from the comparable period. The decrease primarily reflects organic revenue decline of 9.5% 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 offset by an unfavorable impact from foreign currency translation of 1.4% and a 0.7% impact from dispositions within the~~ ~~Pumps & Process Solutions and Refrigeration & Food Equipment segments.~~ ~~Customer pricing favorably impacted revenue by approximately 0.7% for the six months ended June 30, 2020.~~2021.

Gross Profit

Gross profit for the three months ended June 30, ~~2020 decreased $121.0~~2021 increased $220.6 million, or ~~18.0% from the comparable period~~40.0%, and gross profit margin ~~decreased 30~~increased 120 basis points to ~~36.8%~~38.0%, ~~primarily due to~~from the prior year comparable quarter, driven by organic revenue ~~declines of 16.0%, increased material~~growth, including pricing, and ~~inflation costs, under-absorption of production fixed overhead~~benefits from productivity and ~~higher restructuring costs,~~cost reduction actions, partially offset by ~~favorable business mix, pricing initiatives, benefits from productivity initiatives, restructuring~~increased material, labor and ~~cost containment actions, including adjusting direct and indirect manufacturing costs to current demand levels and short-term actions to reduce labor costs such as furloughs.~~logistics costs.

Gross profit for the six months ended June 30, ~~2020 decreased $132.3~~2021 increased $329.9 million, or ~~10.2%~~28.3%, from the comparable period, primarily due to an organic revenue ~~decline~~growth of ~~9.5%,~~18.7% and benefits from productivity initiatives and rightsizing actions, partially offset by increased material and ~~inflation costs and higher restructuring costs, partially offset~~

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~~by productivity initiatives and restructuring and cost containment actions.~~logistics costs. Gross profit margin increased by 20140 basis points for the six months ended June 30, ~~2020~~2021 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' aggressively to match demand.~~period.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, ~~2020 decreased $29.9~~2021 increased $61.3 million, or ~~7.5%~~16.7%, from the prior year comparable ~~period,~~quarter, primarily due to ~~significant cost reduction actions to offset revenue declines, including a reduction in discretionary spend and~~ adjustments to variable compensation to reflect current ~~conditions,~~performance, higher research and ~~benefits from rightsizing actions.~~development and acquisition related costs, and lower discretionary spend in the prior year. As a percentage of revenue, selling, general and administrative expenses ~~increased 260~~improved 340 basis points to ~~24.5%~~21.1% due to an increase in the ~~decline in~~ revenue base. ~~As we continue to monitor the impact of COVID-19, we expect the third quarter to require continued actions such as further reducing discretionary spend and headcount to match demand.~~

Selling, general and administrative expenses for the six months ended June 30, ~~2020 decreased $51.4~~2021 increased $83.4 million, or ~~6.4%~~11.1%, from the comparable period~~, primarily~~ primarily due to ~~a reduction in~~adjustments to variable compensation to reflect current performance, higher research and development and acquisition related costs, and lower discretionary spend ~~and benefits from rightsizing actions, partially offset by higher restructuring charges and a write-off of assets.~~ in the prior year. Selling, general and administrative expenses as a percentage of revenue ~~increased 110~~improved 240 basis ~~points~~points as compared to the prior year comparable period ~~reflecting~~due to an increase in the ~~decrease in~~ revenue base.

Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to ~~$34.8~~$41.2 million and ~~$35.2~~$34.8 million for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$70.3~~$82.4 million and ~~$69.9~~$70.3 million, for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. These costs as a percent of revenue were ~~2.3%~~2.03% and ~~1.9%~~2.32% for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~2.2%~~2.11% and ~~2.0%~~2.23% for the six months ended June 30, 2021 and 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 approximatel~~y $23.6 million net of estimated selling costs. As of March 31, 2019, Finder met the criteria to be classified as held for sale and based on the total consideration from the sale, net of selling costs, we recorded a loss on the assets held for sale of $46.9 million. Th~~e loss was comprised of an impairment on assets held for sale of $21.6 million and foreign currency translation losses reclassified from accumulated other comprehensive losses to current earnings~~ ~~of $25.3 million. We subsequently sold Finder on April 2, 2019, which generated total cash proceeds of $24.2 million.~~

Gain on sale of a business

On March 6, 2020, we sold the Chino, California branch of The AMS Group ("AMS Chino") within the Refrigeration & Food Equipment segment for total ~~cash proceeds~~consideration 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. A gain of $5.8 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 ended June 30, ~~2020 decreased $3.9~~2021 increased $4.2 million from the prior year comparable period primarily due to ~~foreign exchange losses from the remeasurement of foreign currency denominated balances and decreased earnings from our equity method investments.~~investment income.

Other income, net for the six months ended June 30, ~~2020 increased $2.8~~2021 decreased $0.7 million from the prior year comparable period primarily due to foreign exchange ~~gains~~losses from the remeasurement of foreign currency denominated balances.

Income Taxes

The effective tax rates for the three months ended June 30, 2021 and 2020 were 18.2% and ~~2019 were~~ 20.4% ~~and 20.7%~~, respectively. The decrease in the effective tax rate for the three months ended June 30, ~~2020~~2021 relative to the prior year comparable ~~period~~quarter was primarily driven by favorable audit settlements.

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The effective tax rates for the six months ended June 30, 2021 and 2020 were 18.8% and ~~2019 were~~ 18.7% ~~and 21.7%~~, respectively. The ~~decrease~~slight increase in the effective tax rate for the six months ended June 30, ~~2020~~2021 relative to the prior year comparable period iswas primarily driven by ~~the favorable audit settlements and the impact of the exclusion of capital loss on the sale of Finder under local law~~an increase in ~~2019.~~earnings base. See Note 12 — Income Taxes.

Net earnings

Net earnings for the three months ended June 30, ~~2020 decreased 37.0%~~2021 increased 112.0% to $264.5 million, or $1.82 diluted earnings per share, from $124.8 million, or $0.86 diluted earnings per share, from ~~$198.1 million, or $1.35 diluted earnings per share, from~~ the prior year comparable ~~period.~~quarter. The ~~decrease~~increase in net earnings ~~was~~is mainly attributable to ~~reduced volume due to the impact of COVID-19, increased material~~strong demand and ~~inflation costs and higher restructuring costs. The reduction was partially offset by~~robust recovery from prior year market conditions resulting in strong broad-based ~~cost containment actions~~organic growth, favorable pricing initiatives, and benefits from productivity and restructuring actions. These benefits were partially offset by increased material and labor costs.

Net earnings for the six months ended June 30, ~~2020 decreased 0.9%~~2021 increased 65.2% to ~~$301.0~~$497.3 million, or ~~$2.07~~$3.43 diluted earnings per share, from ~~$303.8~~$301.0 million, or $2.07 diluted earnings per share, from the comparable period. The ~~decrease~~increase in net earnings was ~~primarily due~~

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principally attributable to ~~the impact of COVID-19, increased material~~volume growth, pricing initiatives, productivity actions and ~~inflation costs, and higher restructuring costs. The decrease in net earnings was~~benefits from rightsizing actions. These benefits were partially offset by ~~broad-based cost containment actions, benefits from productivity~~increased material, labor and ~~restructuring actions, and a loss on assets held for sale of $46.9 million in the prior period.~~logistics costs.

Rightsizing Activities, which includes Restructuring and Other Costs

During the three and six months ended June 30, 2021, rightsizing activities included restructuring charges of $9.4 million and $15.9 million, respectively, and other costs (benefits) of $1.3 million and $(0.9) million, respectively. Restructuring expense and other costs were comprised primarily of new actions initiated in 2020 and 2021 in response to demand conditions, asset charges related to a product line exit and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization. Other costs (benefits), net for the six months ended June 30, 2021 was comprised primarily of a gain on sale of assets of $2.0 million and $1.3 million in our Pumps & Process Solutions and Refrigeration & Food Equipment segments, respectively, as a result of restructuring actions, partially offset by $2.4 million of restructuring related costs. These rightsizing charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings. Additional programs beyond the scope of the announced programs may be implemented during 2021 with related restructuring charges.

We recorded the following rightsizing costs for the three and six months ended June 30, 2021:


	Three Months Ended June 30, 2021
(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	$	4,339	$	1,415	$	174	$	904	$	2,283	$	321	$	9,436
Other costs (benefits), net	315		242		4		(5)		256		531		1,343
Rightsizing (Non-GAAP)	$	4,654	$	1,657	$	178	$	899	$	2,539	$	852	$	10,779


	Six Months Ended June 30, 2021
(dollars in thousands)	Engineered Products		Fueling Solutions		Imaging & Identification		Pumps & Process Solutions		Refrigeration & Food Equipment		Corporate		Total
Restructuring (GAAP)	$	8,330	$	1,464	$	864	$	887	$	3,344	$	982	$	15,871
Other costs (benefits), net	343		251		(4)		(1,994)		(843)		1,317		(930)
Rightsizing (Non-GAAP)	$	8,673	$	1,715	$	860	$	(1,107)	$	2,501	$	2,299	$	14,941

During the three and six months ended June 30, 2020, rightsizing activities included restructuring charges of $12.3 million and $19.6 million, respectively, and other costs of $4.6 million and $5.1 million, respectively. 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. Other costs were comprised primarily of other charges related to the restructuring actions and a $3.6 million write-off of assets. 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 months ended June 30, 2020:~~

Three Months Ended June 30, 2020
(dollars in thousands) Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Corporate Total
Restructuring (GAAP) $ 4,160 $ 911 $ (522) $ 4,706 $ 2,213 $ 816 $ 12,284
Other costs, net 9 (43) (5) (15) 3,803 807 4,556
Rightsizing (Non-GAAP) $ 4,169 $ 868 $ (527) $ 4,691 $ 6,016 $ 1,623 $ 16,840

Six Months Ended June 30, 2020
(dollars in thousands) Engineered Products Fueling Solutions Imaging & Identification Pumps & Process Solutions Refrigeration & Food Equipment Corporate Total
Restructuring (GAAP) $ 4,518 $ 2,386 $ (266) $ 8,552 $ 2,773 $ 1,662 $ 19,625
Other costs, net 12 (25) 3 (15) 3,947 1,152 5,074
Rightsizing (Non-GAAP) $ 4,530 $ 2,361 $ (263) $ 8,537 $ 6,720 $ 2,814 $ 24,699

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

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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 months ended June 30, ~~2019~~2020:


		Three Months Ended June 30, 2019																											Three Months Ended June 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)	$	1,122	$	1,776	$	1,386	$	501	$	227	$	726	$	5,738	Restructuring (GAAP)	$	4,160	$	911	$	(522)	$	4,706	$	2,213	$	816	$	12,284
Other costs, net		3		(8)		(118)		402		439		—		718
Other costs (benefits), net																Other costs (benefits), net	9		(43)		(5)		(15)		3,803		807		4,556
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	1,125	$	1,768	$	1,268	$	903	$	666	$	726	$	6,456	Rightsizing (Non-GAAP)	$	4,169	$	868	$	(527)	$	4,691	$	6,016	$	1,623	$	16,840


		Six Months Ended June 30, 2019																											Six Months Ended June 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)	$	1,201	$	2,514	$	1,677	$	882	$	1,639	$	761	$	8,674	Restructuring (GAAP)	$	4,518	$	2,386	$	(266)	$	8,552	$	2,773	$	1,662	$	19,625
Other costs, net		4		6		(20)		435		1,320		—		1,745
Other costs (benefits), net																Other costs (benefits), net	12		(25)		3		(15)		3,947		1,152		5,074
Rightsizing (Non-GAAP)	Rightsizing (Non-GAAP)	$	1,205	$	2,520	$	1,657	$	1,317	$	2,959	$	761	$	10,419	Rightsizing (Non-GAAP)	$	4,530	$	2,361	$	(263)	$	8,537	$	6,720	$	2,814	$	24,699

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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 June 30,					Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2021			2020			% Change		2021			2020			% Change
Revenue	Revenue	$	342,380		$	429,928		(20.4)	%	$	750,540		$	848,779		(11.6)	%	Revenue	$	442,091		$	342,380		29.1	%	$	870,218		$	750,540		15.9	%

Segment earnings (EBIT)	Segment earnings (EBIT)	$	47,702		$	77,129		(38.2)	%	$	116,796		$	144,248		(19.0)	%	Segment earnings (EBIT)	$	62,720		$	47,702		31.5	%	$	131,499		$	116,796		12.6	%
Depreciation and amortization	Depreciation and amortization	9,722			10,452			(7.0)	%	19,844			20,811			(4.6)	%	Depreciation and amortization	11,981			9,722			23.2	%	26,028			19,844			31.2	%
Segment EBITDA	Segment EBITDA	$	57,424		$	87,581		(34.4)	%	$	136,640		$	165,059		(17.2)	%	Segment EBITDA	$	74,701		$	57,424		30.1	%	$	157,527		$	136,640		15.3	%

Segment margin	Segment margin	13.9		%	17.9		%			15.6		%	17.0		%			Segment margin	14.2		%	13.9		%			15.1		%	15.6		%
Segment EBITDA margin	Segment EBITDA margin	16.8		%	20.4		%			18.2		%	19.4		%			Segment EBITDA margin	16.9		%	16.8		%			18.1		%	18.2		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	278,373		$	397,420		(30.0)	%	$	693,345		$	825,117		(16.0)	%	Bookings	$	497,200		$	278,373		78.6	%	$	1,025,510		$	693,345		47.9	%
Backlog	Backlog									$	378,874		$	418,154		(9.4)	%	Backlog									$	613,517		$	378,874		61.9	%

Components of revenue decline:
Organic decline								(20.1)	%							(11.1)	%
Components of revenue growth:																		Components of revenue growth:
Organic growth																		Organic growth							25.4	%							12.9	%
Acquisitions	Acquisitions							0.2	%							0.2	%	Acquisitions							—	%							0.1	%

Foreign currency translation	Foreign currency translation							(0.5)	%							(0.7)	%	Foreign currency translation							3.7	%							2.9	%
								(20.4)	%							(11.6)	%								29.1	%							15.9	%

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

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

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Second Quarter 2021 Compared to the Second Quarter 2020

Engineered Products segment revenue for the second quarter of 2021 increased $99.7 million, or 29.1%, as compared to the second quarter of 2020, comprised of organic growth of 25.4% and a favorable impact from foreign currency translation of 3.7%. Customer pricing favorably impacted revenue by approximately 2.7% in the second quarter.

The organic revenue ~~decline~~growth was ~~primarily driven by the global economic downturn precipitated by the COVID-19 pandemic. This impact was broad-based across~~most notable in our ~~businesses in the Engineered Products segment, with the most significant impacts experienced in~~ vehicle service, industrial automation, and ~~fluid dispensing. Our industrial winch~~aerospace and ~~hoist businesses also experienced decreases in customer demand due to COVID-19 as well as challenging conditions in several end-markets.~~defense businesses. Our waste handling business ~~showed relatively resilient revenue trajectory with a modest decline~~revenues remained flat year-over-year as the business ~~shipped goods against its significant backlog of orders, as well as continued growth~~experienced supply chain constraints that delayed shipments. We expect shipments in ~~adoption of~~ our ~~Connected Collection digital solutions. New order activity in~~ waste handling ~~saw headwinds in~~business demand to improve sequentially throughout the ~~quarter~~second half as ~~waste haulers~~supply chain constraints begin to subside 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 most of~~reflecting strong order backlog exiting the quarter. ~~Our aerospace & defense business also demonstrated resilience, posting approximately flat revenue growth in the quarter on the back of a strong backlog of orders from defense customers.~~

We expect the global COVID-19 pandemic to continue to impact segment results in the third quarter as demand headwinds across our businesses persist and, as a result, we have undertaken initiatives to adjust 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, 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~~increased $15.0 million, or ~~38.2%~~31.5%, compared to the second quarter of ~~2019, which had the highest margin performance of 2019.~~ 2020. The ~~decrease~~increase was primarily driven by ~~the impact of widespread government~~conversion on increased volumes and benefits from productivity and rightsizing actions, ~~to contain the spread of COVID-19 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~~higher material and ~~indirect manufacturing~~logistics costs, ~~to current demand levels, the execution~~comprised primarily of ~~short-term actions to reduce labor~~increased steel and freight 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. which were not fully recovered by pricing actions. Segment operating margin ~~decreased 400~~increased 30 basis points to ~~13.9%~~14.2% from ~~17.9%~~13.9% as compared to the prior year quarter.

Bookings ~~decreased 30.0%~~increased 78.6% for the segment, comprised of an organic ~~decline~~growth of ~~29.8%, an unfavorable~~73.5% and a favorable impact from foreign currency translation of ~~0.5%, partially offset by acquisition-related growth of 0.3%~~5.1%. The organic bookings ~~decline~~growth was broad-based, most notably in our vehicle service, waste handling, industrial automation, and ~~primarily driven by the global impact on customer demand of the COVID-19 pandemic.~~industrial winch and hoist businesses. Segment book-to-bill was ~~0.81.~~1.12. Backlog ~~decreased 9.4%~~increased 61.9% compared to the prior year comparable quarter.

Six Months Ended June 30, ~~2020~~2021 Compared to the Six Months Ended June 30, ~~2019~~2020

Engineered Products revenue for the six months ended June 30, ~~2020 decreased $98.2~~2021 increased $119.7 million, or ~~11.6%~~15.9%, compared to the prior year comparable period. This was comprised of organic revenue ~~decline~~growth of ~~11.1% and an unfavorable~~12.9%, a favorable impact from foreign currency translation of ~~0.7%~~2.9%, ~~partially offset by~~and acquisition-related growth of ~~0.2%~~0.1%. The organic revenue ~~decline~~growth 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~~most notable in ~~the first quarter with government mandated shutdowns in China and Italy impacting~~ our vehicle service, industrial automation, and aerospace and defense businesses. Our waste handling business ~~as well as a voluntary shutdown in~~experienced an organic revenue decline compared to the ~~U.S. of a facility serving the automotive original equipment manufacturer ("OEM") market. Demand headwinds~~prior year, driven by continued ~~into the second quarter.~~ supply chain constraints that delayed shipments. Customer pricing ~~did not have a significant impact on~~favorably impacted revenue by approximately 1.6% for the six months ended June 30, ~~2020.~~2021.

Segment earnings for the six months ended June 30, ~~2020 decreased $27.5~~2021 increased $14.7 million, or ~~19.0%~~12.6%, as compared to the ~~2019~~2020 comparable period. This ~~decrease~~increase was primarily driven by ~~the earnings impact~~conversion on increased volumes and benefits from ~~lower revenues~~ ~~due to the global COVID-19 pandemic~~,productivity and rightsizing actions, partially offset by ~~significant cost reduction initiatives.~~higher material and logistics costs, comprised primarily of increased steel and freight costs, which were not fully recovered by pricing actions. Segment margin decreased from ~~17.0%~~15.6% to ~~15.6%~~15.1% 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 June 30,					Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2021			2020			% Change		2021			2020			% Change
Revenue	Revenue	$	326,495		$	390,586		(16.4)	%	$	686,477		$	763,636		(10.1)	%	Revenue	$	437,042		$	326,495		33.9	%	$	826,720		$	686,477		20.4	%

Segment earnings	Segment earnings	$	47,214		$	52,637		(10.3)	%	$	100,712		$	89,867		12.1	%	Segment earnings	$	78,755		$	47,214		66.8	%	$	145,235		$	100,712		44.2	%
Depreciation and amortization	Depreciation and amortization	17,968			18,945			(5.2)	%	36,307			36,824			(1.4)	%	Depreciation and amortization	19,475			17,968			8.4	%	38,744			36,307			6.7	%
Segment EBITDA	Segment EBITDA	$	65,182		$	71,582		(8.9)	%	$	137,019		$	126,691		8.2	%	Segment EBITDA	$	98,230		$	65,182		50.7	%	$	183,979		$	137,019		34.3	%

Segment margin	Segment margin	14.5		%	13.5		%			14.7		%	11.8		%			Segment margin	18.0		%	14.5		%			17.6		%	14.7		%
Segment EBITDA margin	Segment EBITDA margin	20.0		%	18.3		%			20.0		%	16.6		%			Segment EBITDA margin	22.5		%	20.0		%			22.3		%	20.0		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	311,498		$	394,256		(21.0)	%	$	684,568		$	737,339		(7.2)	%	Bookings	$	453,146		$	311,498		45.5	%	$	875,814		$	684,568		27.9	%
Backlog	Backlog									$	199,305		$	186,202		7.0	%	Backlog									$	256,497		$	199,305		28.7	%

Components of revenue decline:
Organic decline								(14.8)	%							(8.9)	%
Components of revenue growth:																		Components of revenue growth:
Organic growth																		Organic growth							24.9	%							13.4	%
Acquisitions	Acquisitions							—	%							0.4	%	Acquisitions							4.3	%							3.4	%

Foreign currency translation	Foreign currency translation							(1.6)	%							(1.6)	%	Foreign currency translation							4.7	%							3.6	%
								(16.4)	%							(10.1)	%								33.9	%							20.4	%

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

Fueling Solutions segment revenue for the second quarter of ~~2020 decreased $64.1~~2021 increased $110.5 million, or ~~16.4%~~33.9%, as compared to the second quarter of 2020, comprised of an organic ~~decline~~growth of ~~14.8% and an unfavorable~~24.9%, a favorable impact from foreign currency translation of ~~1.6%~~4.7%, and acquisition-related growth of 4.3%. Acquisition-related growth was driven by the acquisition of Innovative Control Systems, Inc. and AvaLAN Wireless Systems Incorporated. Customer pricing favorably impacted revenue by approximately ~~1.2%~~2.5% in the second ~~quarter of 2020.~~quarter.

The organic revenue ~~decline~~growth for the Fueling Solutions segment 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 sitesdriven by solid demand 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 underground infrastructure conversion upgrades. 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 in capital budgets of vertically-integrated oil companies, which operate a significant share of fuel retail infrastructure outside theour North American ~~market. Additionally, our businesses serving the transportation~~retail fueling, European systems and software, and vehicle wash ~~markets were also challenged by~~solutions businesses, reflecting a market ~~headwinds due~~recovery after COVID-19. Demand for Europay, Mastercard, and Visa compliant equipment continued to ~~COVID-19-related operational disruptions, reduction in capital investment due~~contribute to ~~economic uncertainty and lower oil prices. Demand~~order activity in North America, ~~was supported by strong demand and robust orders for EMV-compliant payment equipment which provided some offset~~however, we expect this activity to ~~the decline in global sales. We expect activity in the retail fueling market to remain subdued in~~taper down throughout the second half of ~~2020, particularly outside~~2021 and beyond after the expiration of ~~North America.~~compliance deadline in April 2021.

Fueling Solutions segment earnings ~~decreased $5.4~~increased $31.5 million, or ~~10.3%~~66.8%, over the prior year comparable quarter. The ~~decrease~~increase was ~~predominantly~~primarily driven by ~~the global impact of COVID-19 which depressed volume and demand. This decline was partially offset by favorable geographic and product mix,~~conversion on organic revenue growth, pricing initiatives, productivity actions, ~~including realized restructuring benefits~~ and ~~selling, general~~a favorable impact from acquisitions, partially offset by material and ~~administrative~~labor cost ~~reductions.~~inflation. Segment margin increased ~~100 basis points over~~to 18.0% from 14.5% in the prior year ~~quarter.~~quarter due to similar factors that drove segment earnings.

Overall bookings ~~decreased 21.0%~~increased 45.5% as compared to the prior year comparable quarter, driven by organic ~~decline~~growth of ~~18.2% and an unfavorable~~33.5%, a favorable impact from foreign currency translation of ~~2.8%~~5.5%, and acquisition-related growth of 6.5%. Organic bookings ~~decline is~~growth was primarily driven by ~~the global impact on customer~~strong demand ~~caused by the COVID-19 pandemic, partially offset by high order trends for EMV equipment~~ in North ~~America.~~American retail fueling and vehicle wash solutions, as well as solid demand in EMEA. Segment book to bill was ~~0.95.~~1.04. Backlog increased ~~7.0%~~28.7% as compared to the prior year ~~quarter primarily as a result of first quarter bookings.~~comparable quarter.

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Six Months Ended June 30, ~~2020~~2021 Compared to the Six Months Ended June 30, ~~2019~~2020

Fueling Solutions segment revenue ~~decreased $77.2~~increased $140.2 million, or ~~10.1%~~20.4%, as compared to the six months ended June 30, ~~2019,~~2020, attributable to organic ~~decline~~growth of ~~8.9% and an unfavorable~~13.4%, a favorable impact from foreign currency translation of ~~1.6%~~3.6%, ~~partially offset by~~and acquisition-related growth of ~~0.4%~~3.4%. Organic revenue ~~decline was~~increases were driven by strong activity in our North American retail fueling, European systems & software, and vehicle wash solutions businesses, given the broader market recovery due to ~~slowing~~reduced demand in the ~~retail fueling market in China and other parts~~first half of the world outside of North America, as well as slowing in 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 shutdowns in China and Italy affecting production and demand. Shutdowns continued into May in certain regions.2020 due to COVID-19. Customer pricing favorably impacted revenue by approximately ~~1.4%~~1.8% for the six months ended June 30, ~~2020.~~2021.

Fueling Solutions segment earnings increased ~~$10.8~~$44.5 million, or ~~12.1%~~44.2%, for the six months ended June 30, ~~2020.~~2021. The increase was driven by conversion on organic revenue growth, pricing initiatives, productivity actions, and a favorable ~~business mix, pricing and productivity initiatives and selling, general and administrative cost containment. These benefits were~~impact from acquisitions, partially offset by ~~weakened organic volume.~~material and labor cost inflation. Segment margin ~~improved 290~~increased 230 basis points ~~over~~to 17.6% from 14.7% in the prior year comparable period.

Table of Contents

Imaging & Identification

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


		Three Months Ended June 30,														Six Months Ended June 30,														Three Months Ended June 30,					Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2020			2019			% Change		2020			2019			% Change		(dollars in thousands)	2021			2020			% Change		2021			2020			% Change
Revenue	Revenue	$	227,977		$	266,588		(14.5)	%	$	484,742		$	534,942		(9.4)	%	Revenue	$	294,076		$	227,977		29.0	%	$	578,404		$	484,742		19.3	%

Segment earnings	Segment earnings	$	38,046		$	54,641		(30.4)	%	$	89,528		$	110,596		(19.0)	%	Segment earnings	$	60,747		$	38,046		59.7	%	$	117,739		$	89,528		31.5	%
Depreciation and amortization	Depreciation and amortization	9,224			7,413			24.4	%	17,993			14,848			21.2	%	Depreciation and amortization	9,294			9,224			0.8	%	18,887			17,993			5.0	%
Segment EBITDA	Segment EBITDA	$	47,270		$	62,054		(23.8)	%	$	107,521		$	125,444		(14.3)	%	Segment EBITDA	$	70,041		$	47,270		48.2	%	$	136,626		$	107,521		27.1	%

Segment margin	Segment margin	16.7		%	20.5		%			18.5		%	20.7		%			Segment margin	20.7		%	16.7		%			20.4		%	18.5		%
Segment EBITDA margin	Segment EBITDA margin	20.7		%	23.3		%			22.2		%	23.5		%			Segment EBITDA margin	23.8		%	20.7		%			23.6		%	22.2		%

Other measures:	Other measures:																	Other measures:
Bookings	Bookings	$	221,315		$	264,175		(16.2)	%	$	493,919		$	531,937		(7.1)	%	Bookings	$	299,608		$	221,315		35.4	%	$	593,222		$	493,919		20.1	%
Backlog	Backlog									$	168,904		$	116,810		44.6	%	Backlog									$	206,125		$	168,904		22.0	%

Components of revenue decline:
Organic decline								(14.0)	%							(9.2)	%
Components of revenue growth:																		Components of revenue growth:
Organic growth																		Organic growth							20.2	%							11.4	%
Acquisitions	Acquisitions							3.1	%							3.0	%	Acquisitions							1.3	%							1.9	%

Foreign currency translation	Foreign currency translation							(3.6)	%							(3.2)	%	Foreign currency translation							7.5	%							6.0	%
								(14.5)	%							(9.4)	%								29.0	%							19.3	%

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

Imaging & Identification segment revenue for the second quarter of ~~2020 decreased $38.6~~2021 increased $66.1 million, or ~~14.5%~~29.0%,as compared to the second quarter of 2020, comprised of an organic ~~decline~~growth of ~~14.0% and an unfavorable~~20.2%, a favorable impact from foreign currency translation of ~~3.6%~~7.5%, ~~partially offset by~~and acquisition-related growth of ~~3.1%~~1.3%. Acquisition-related growth was driven by the acquisition of ~~Sys-Tech Solutions, Inc. ("Systech").~~Solaris Laser S.A. in the third quarter of 2020. Customer pricing favorably impacted revenue by approximately 1.1% in the second ~~quarter of 2020.~~quarter.

~~The organic~~Organic revenue ~~decline~~growth was primarily driven by the global economic downturn precipitated by the COVID-19 pandemic. The greatest impact was felt in our digital textile printing business headquartered in Italy where the country remained shut down through the first part of the second quarter. While our digital printing facilities in Italy reopened in May, our operations continued to produce and ship printing equipment and consumables at substantially reduced capacity as global end-market demand for textiles, including fashion and apparel goods, remained significantly depressed world-wide. Demand for consumables in our marking and coding business, which delivered continued strong growth in new equipment and associated services and consumables, particularly ~~inks for food and beverage, cleaning supplies, pharmaceuticals and medical supplies remained resilient~~in Asia, as ~~production~~well as serialization software sales. Our digital textile printing business also experienced early stages of essential goods continued. Also in marking 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 throughdemand recovery compared to the second quarter ~~as global economies began to reopen.~~

~~We expect to see improvements in market demand in our marking and coding business from the second quarter into the second half~~ of 2020, ~~and continue to anticipate a favorable long-term growth trend thereafter, supported by constructive secular trends in~~when demand for ~~product traceability, identification, differentiation and brand protection solutions. In our digital printing business, while we~~printed textiles was severely reduced due to the impact of COVID-19 restrictions on the global apparel industry.While current global retail volumes have improved substantially from this time last year, volumes have not yet returned to pre-pandemic levels. We continue to believe we ~~are~~remain favorably positioned ~~long-term~~ to ~~exploit an accelerated~~gain from a longer-term transition from analog to digital printing by our customers, and believe some business model shifts within the ~~near-term timing and trajectory of a recovery in~~industry driven by the ~~clothing and apparel market remains uncertain.~~COVID-19 pandemic may accelerate our customers’ need to shift from analog to digital printing.

Imaging & Identification segment earnings ~~decreased $16.6~~increased $22.7 million, or ~~30.4%~~59.7%, over the prior year comparable quarter. This ~~decrease~~increase was primarily driven by conversion on increased revenue and the ~~impact of widespread government actions to contain the spread of COVID-19 on consumer spending~~benefits from productivity initiatives and ~~resulting decline in demand for the digital textile printing equipment and consumables. Partially offsetting this decrease were significant~~ cost containment ~~initiatives undertaken~~actions. Segment margin increased to 20.7% from 16.7% in the ~~second quarter. These initiatives include actions to adjust direct and indirect manufacturing cost to current demand levels, the execution of short-term actions to reduce labor costs, the~~

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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 the prior year comparable quarter.

Overall bookings ~~decreased 16.2%~~increased 35.4% as compared to the prior year comparable quarter, reflecting an organic ~~decline~~growth of ~~16.5% and an unfavorable~~26.6%, a favorable impact from foreign currency translation of ~~3.5%~~7.8%, ~~partially offset by~~and acquisition-related growth of ~~3.8%~~1.0%. ~~The organic reduction was the result of limited new orders for equipment and consumables in our digital printing business.~~ Segment book to bill was ~~0.97.~~1.02. Backlog increased ~~44.6%~~22.0% as compared to the prior year quarter driven by the inclusion of backlog from the ~~Systech~~Solaris acquisition and ~~sustained bookings for consumables~~increased order intake in our marking and ~~coding.~~coding business.

Six Months Ended June 30, ~~2020~~2021 Compared to the Six Months Ended June 30, ~~2019~~2020

Imaging & Identification segment revenue ~~decreased $50.2~~increased $93.7 million, or ~~9.4%~~19.3%, as compared to the six months ended June 30, ~~2019,~~2020, attributable to organic ~~decline~~growth of ~~9.2% and an unfavorable~~11.4%, a favorable impact from foreign currency translation of ~~3.2%~~6.0%, ~~partially offset by~~and acquisition-related growth of ~~3.0%~~1.9%. The organic revenue ~~decline~~growth was primarily driven by ~~the impact to consumer spending of the aforementioned~~ ~~global economic downturn precipitated by the COVID-19 pandemic~~. ~~This impact began in the first quarter with government mandated shutdowns of manufacturing operations in February affecting our~~continued strong demand for marking and coding ~~facilities which returned to fully operational by March.~~ ~~In March, restrictions were implemented in Italy, where our digital printing business headquarters~~equipment and ~~main manufacturing facilities reside~~associated services and ~~continued into May.~~ consumables, serialization software sales, as well as a continuing gradual recovery in

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demand for printed textiles. Customer pricing favorably impacted revenue by approximately ~~0.7%~~1.0% for the six months ended June 30, ~~2020.~~2021.

Imaging & Identification segment earnings ~~decreased $21.1~~increased $28.2 million, or ~~19.0%~~31.5%, for the six months ended June 30, ~~2020.~~2021 over the prior year comparable period. The ~~decrease~~increase was primarily driven by conversion on increased revenue and the ~~earnings impact~~benefits from ~~lower revenues~~ ~~due to the global COVID-19 pandemic, partially offset by the significant~~productivity initiatives and cost reduction ~~initiatives.~~actions. Segment margin ~~decreased~~increased to 20.4% from ~~20.7% to~~ 18.5% ~~as compared to~~in the prior year comparable ~~period.~~quarter.

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Pumps & Process Solutions

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

Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Revenue $ 309,095 $ 338,924 (8.8) % $ 628,631 $ 669,143 (6.1) %
Segment earnings⁽¹⁾
$ 67,702 $ 76,278 (11.2) % $ 133,781 $ 91,269 46.6 %
Depreciation and amortization 17,572 16,201 8.5 % 35,908 33,749 6.4 %
Segment EBITDA ⁽¹⁾
$ 85,274 $ 92,479 (7.8) % $ 169,689 $ 125,018 35.7 %
Segment margin ⁽¹⁾
21.9 % 22.5 % 21.3 % 13.6 %
Segment EBITDA margin ⁽¹⁾
27.6 % 27.3 % 27.0 % 18.7 %
Other measures:
Bookings $ 275,872 $ 375,905 (26.6) % $ 645,275 $ 745,706 (13.5) %
Backlog $ 379,090 $ 378,427 0.2 %
Components of revenue decline:
Organic decline (8.8) % (5.0) %
Acquisitions 1.1 % 1.0 %
Dispositions — % (0.9) %
Foreign currency translation (1.1) % (1.2) %
(8.8) % (6.1) %

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


	Three Months Ended June 30,								Six Months Ended June 30,
(dollars in thousands)	2021			2020			% Change		2021			2020			% Change
Revenue	$	428,701		$	309,095		38.7	%	$	823,078		$	628,631		30.9	%

Segment earnings	$	138,632		$	67,702		104.8	%	$	262,277		$	133,781		96.0	%
Depreciation and amortization	16,866			17,572			(4.0)	%	33,792			35,908			(5.9)	%
Segment EBITDA	$	155,498		$	85,274		82.4	%	$	296,069		$	169,689		74.5	%

Segment margin	32.3		%	21.9		%			31.9		%	21.3		%
Segment EBITDA margin	36.3		%	27.6		%			36.0		%	27.0		%

Other measures:
Bookings	$	521,010		$	275,872		88.9	%	$	1,072,375		$	645,275		66.2	%
Backlog									$	634,477		$	379,090		67.4	%

Components of revenue growth:
Organic growth							33.6	%							25.8	%
Acquisitions							0.7	%							1.0	%

Foreign currency translation							4.4	%							4.1	%
							38.7	%							30.9	%

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

Pumps & Process Solutions segment revenue for the second quarter of ~~2020 decreased $29.8~~2021 increased $119.6 million, or ~~8.8%~~38.7%, as compared to the second quarter of 2020, comprised of organic ~~decline~~growth of ~~8.8% and an unfavorable~~33.6%, a favorable impact from foreign currency translation of ~~1.1%~~4.4%, ~~partially offset by~~and acquisition-related growth of ~~1.1%~~0.7%. Acquisition-related growth was primarily driven by the acquisition of Em-tec GmbH. Customer pricing favorably impacted revenue by approximately ~~0.9%~~1.3% in the second ~~quarter of 2020.~~quarter.

The organic revenue ~~decline~~growth was ~~principally~~most significantly driven by strong performance in the biopharma and hygienic markets, where we continue to see strong demand for single use pumps and connectors used in biological pharmaceutical production processes. We expect this positive trajectory to carry into the next quarter and beyond, as our bookings trends and backlog position signal strength into the second half of 2021. Additionally, we continue to see strength in industrial pumps, and plastics and polymer processing solutions as a result of strong fundamental end market dynamics, as well as a recovery from the demand impacts from COVID-19 in the second quarter of 2020. Revenue in bearings and compression components increased modestly, as several end markets are facing prolonged recovery and are expected to show improvement in the second half of the year.

Pumps & Process Solutions segment earnings increased $70.9 million, or 104.8%, over the prior year comparable quarter. The increase was primarily driven by strong conversion on revenue growth, pricing initiatives, and productivity actions, partially offset by material and labor cost inflation. Segment margin increased to 32.3% from 21.9% from the prior year comparable quarter.

Overall bookings increased 88.9% as compared to the prior year comparable quarter, reflecting organic growth of 81.7%, a favorable impact from foreign currency translation of 5.2%, and acquisition-related growth of 2.0%. Organic bookings growth was primarily 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~~significant 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, Mexicopumps and ~~India. These shutdowns disrupted manufacturing and supply chain operations,~~connectors markets, as well as ~~the operations of some of our customers~~strong order intake in industrial pumps and ~~suppliers. Additionally, the fall in the price of oil has led to a reduction in demand from customers in the oil~~plastics & 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 million, or 11.2%, over the prior year quarter. The decrease~~solutions. Segment book to bill was ~~primarily driven by the global impact of COVID-19 on volume,~~1.22. Backlog 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. 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 and selected furloughs will continue into the third quarter and remain in place until we see improvements in near-term demand. Segment margin decreased to 21.9% from 22.5% from the prior year quarter.

~~Overall bookings decreased 26.6% as~~67.4% compared to the prior year ~~quarter, reflecting organic decline of 25.7% and an unfavorable impact from foreign currency translation of 1.3%, partially offset by acquisition-related growth of 0.4%. Organic~~comparable quarter.

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bookings decline is primarily driven by global impact on customer demand of the COVID-19 pandemic, partially offset by growth in the biopharma and hygienic markets. Segment book to bill was 0.89. Backlog increased 0.2% as compared to the prior year quarter.

Six Months Ended June 30, ~~2020~~2021 Compared to the Six Months Ended June 30, ~~2019~~2020

Pumps & Process Solutions segment revenue ~~decreased $40.5~~increased $194.4 million, or ~~6.1%~~30.9%, as compared to the six months ended June 30, ~~2019,~~2020, attributable to organic ~~decline~~growth of ~~5.0%~~25.8%, ~~an unfavorable~~a favorable impact from foreign currency translation of ~~1.2%~~4.1% and a ~~0.9%~~1.0% impact from ~~dispositions, partially offset by acquisition-related growth of 1.0%.~~acquisitions. The organic ~~decline~~increase was ~~primarily~~principally driven by ~~the continued slower demand~~strong performance in the ~~oil~~biopharma and hygienic pumps and connectors markets, along with solid growth in industrial pumps and plastics & ~~gas market as well as government mandated facility shutdowns impacting China, India, Mexico and Italy during the first half of the year.~~polymer processing solutions. Customer pricing favorably impacted revenue by approximately ~~1.0%~~1.1% for the six months ended June 30, ~~2020.~~2021.

Pumps & Process Solutions segment earnings increased ~~$42.5~~$128.5 million, or ~~46.6%~~96.0%, for the six months ended June 30, ~~2020. Segment earnings for~~2021 over the ~~six months ended June 30, 2019 included a loss on assets held for sale for Finder of $46.9 million. Excluding the loss, segment earnings decreased $4.4 million~~prior year comparable period. The increase was predominantly driven by ~~the global impact of COVID-19~~conversion on ~~volume, increased material~~revenue growth, pricing initiatives, and ~~inflation costs, and an unfavorable impact from foreign currency translation. This decrease was~~productivity actions, partially offset by ~~pricing initiatives, productivity actions, restructuring benefits,~~material and ~~selling, general and administrative~~labor cost ~~reductions.~~inflation. Segment margin increased to ~~21.3%~~31.9% from ~~13.6%~~21.3% from the prior year ~~quarter, which included the loss on Finder.~~comparable period.

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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,
(dollars in thousands)	2021			2020			% Change		2021			2020			% Change
Revenue	$	430,506		$	293,527		46.7	%	$	802,583		$	605,440		32.6	%

Segment earnings(1)	$	48,971		$	11,459		327.4	%	$	87,088		$	34,988		148.9	%
Depreciation and amortization	12,077			11,421			5.7	%	24,173			22,969			5.2	%
Segment EBITDA(1)	$	61,048		$	22,880		166.8	%	$	111,261		$	57,957		92.0	%

Segment margin(1)	11.4		%	3.9		%			10.9		%	5.8		%
Segment EBITDA margin(1)	14.2		%	7.8		%			13.9		%	9.6		%

Other measures:
Bookings	$	606,545		$	326,400		85.8	%	$	1,143,871		$	681,557		67.8	%
Backlog									$	854,188		$	390,368		118.8	%

Components of revenue growth:
Organic growth							43.5	%							30.5	%

Dispositions							—	%							(0.8)	%
Foreign currency translation							3.2	%							2.9	%
							46.7	%							32.6	%

Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2020 2019 % Change 2020 2019 % Change
Revenue $ 293,527 $ 385,474 (23.9) % $ 605,440 $ 720,117 (15.9) %
Segment earnings⁽¹⁾
$ 11,459 $ 44,375 (74.2) % $ 34,988 $ 69,182 (49.4) %
Depreciation and amortization 11,421 12,777 (10.6) % 22,969 25,788 (10.9) %
Segment EBITDA⁽¹⁾
$ 22,880 $ 57,152 (60.0) % $ 57,957 $ 94,970 (39.0) %
Segment margin⁽¹⁾
3.9 % 11.5 % 5.8 % 9.6 %
Segment EBITDA margin⁽¹⁾
7.8 % 14.8 % 9.6 % 13.2 %
Other measures:
Bookings $ 326,400 $ 384,365 (15.1) % $ 681,557 $ 761,363 (10.5) %
Backlog $ 390,368 $ 310,454 25.7 %
Components of revenue decline:
Organic decline (20.2) % (12.8) %
Dispositions (3.1) % (2.5) %
Foreign currency translation (0.6) % (0.6) %
(23.9) % (15.9) %

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

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

Refrigeration & Food Equipment segment revenue ~~decreased $91.9~~increased $137.0 million, or ~~23.9%~~46.7%, as compared to the second quarter of ~~2019,~~2020, reflecting an organic revenue ~~decline~~growth of ~~20.2%,~~43.5% and a ~~3.1% impact from the disposition of AMS Chino, and an unfavorable~~favorable impact from foreign currency translation of ~~0.6%~~3.2%. Customer pricing favorably impacted revenue by approximately ~~0.8%~~2.6% in the ~~second quarter of 2020.~~first quarter.

The organic revenue ~~decline~~ growth was principally driven by ~~the impact of COVID-19 on the operations of~~robust growth across our ~~customers~~key end-markets. Retail refrigeration experienced strong growth across all product lines, driven by a broad-based increase in ~~food retail~~customer store renovation 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 early in the second quarter, with customer order rates and production uptime improving sequentially throughout the quarter as certain restrictions were eased. Many key customers in our retail refrigeration business delayed previously planned projects related to new store construction and existing store remodels and deferred their near-term capital investment plans, because of COVID restrictions impacting availability of installers and techniciansremodel programs, as well as ~~a desire to maximize store uptime to meet surging demand as a result of social distancing~~new product roll-outs and ~~restaurant closure mandates. Retail refrigeration business activity improved late~~customer wins. Additionally, regulations requiring more environmentally friendly refrigerants drove strong growth for our natural refrigerant systems in both Europe and the U.S. Can-shaping equipment revenues more than doubled from prior year, driven by continued favorable macro trends in the ~~quarter, with several key retail customers resuming capital investment programs~~global beverage industry as ~~government restrictions related~~producers shift from plastic and glass packaging to ~~COVID-19 were eased.~~aluminum containers for environmental sustainability reasons. Our ~~ending backlog position is favorable to~~heat exchanger business experienced healthy growth as well, fueled by regulation-driven heat pump demand in Europe and strengthening commercial HVAC and industrial markets globally. Commercial foodservice equipment revenues improved sequentially and over comparable prior year and we expect the recent wear 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 quarterperiod, as ~~restaurants were closed in~~ many ~~localities and customer traffic declined significantly, leading restaurants to delay their capital expenditures. While some large~~key restaurant chain customers ~~have recently~~ resumed ~~capital~~store investment programs weonce government mandated COVID-19 restrictions began to ease. We expect ~~more near-term softness in commercial~~ foodservice ~~due~~equipment demand to ~~continued government restrictions on restaurant operations~~continue to recover as a successful rollout of the COVID-19 vaccine will facilitate key school, institutional and ~~many school and university kitchens remaining closed. Additionally, we experienced slower sales in our heat exchanger business, but~~event venue customers to ~~a lesser extent than in our retail refrigeration and commercial foodservice businesses.~~re-open.

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Refrigeration & Food Equipment segment earnings ~~decreased $32.9~~increased $37.5 million, or ~~74.2%~~327.4%, as compared to the second quarter of ~~2019.~~2020. Segment margin ~~decreased~~increased to ~~3.9%~~11.4% from ~~11.5%~~3.9% in the prior year comparable quarter. The earnings ~~decline~~increase was driven by ~~reduced~~conversion on increased volumes, improved operational efficiencies and ~~operational inefficiencies associated with impacts~~benefits from ~~COVID-19, higher~~prior restructuring ~~costs primarily associated with segment-wide reductions in force, under-absorption of production fixed overhead, and a~~ ~~$3.6 millionwrite-off of assets~~,programs, partially offset by ~~broad-based~~increased material costs, most notably metals, and other inflationary 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.~~increases.

Bookings in the second quarter of ~~2020 decreased 15.1%~~2021 increased 85.8% from the prior year comparable quarter, reflecting an organic ~~decline~~growth of ~~11.6%,~~83.1% and a ~~3.1% impact from the disposition of AMS Chino, and an unfavorable~~favorable impact from foreign currency translation of ~~0.4%~~2.7%. ~~Organic decline~~The organic bookings growth was principally driven ~~primarily~~ by ~~COVID-19 demand reductions~~increased project activity for can-shaping equipment, continued broad-based supermarket remodel programs in ~~our~~ retail refrigeration ~~foodservice equipment~~products and strong global demand for brazed plate heat exchanger businesses, partially offset by project awards for aluminum can shaping equipment supported by market trends of beverage companies shifting away from plastic containers in favor of aluminum. Bookings trajectory has improved towards the end of the second quarter.exchangers. Segment book to bill for the second quarter

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of 2021 was ~~1.11.~~1.41. Backlog increased ~~25.7%~~118.8% over the prior year comparable quarter, ~~driven mainly by stronger positions in our retail refrigeration and aluminum can shaping equipment businesses.~~reflective of the improving outlook across all businesses within the segment.

Six Months Ended June 30, ~~2020~~2021 Compared to the Six Months Ended June 30, ~~2019~~2020

Refrigeration & Food Equipment segment revenue ~~decreased $114.7~~increased $197.1 million, or ~~15.9%~~32.6%, compared to the six months ended June 30, ~~2019,~~2020, reflecting an organic revenue ~~decline~~growth of ~~12.8%~~30.5% and a favorable foreign currency translation of 2.9%, partially offset by a ~~2.5%~~0.8% impact from the disposition of AMS ~~Chino and an unfavorable foreign currency translation of 0.6%.~~Chino. The organic revenue ~~decline~~growth for the six months ended June 30, ~~2020~~2021 was driven ~~primarily~~ by strong growth across our key end markets, most notably retail refrigeration, can-shaping equipment and heat exchangers. Commercial foodservice equipment revenues improved sequentially from prior quarter and exceeded prior year, driven by a strong recovery with restaurant chain customers due to the ~~impact~~ease 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.government mandated restrictions. Customer pricing favorably impacted revenue by approximately ~~0.4%~~1.4% for the six months ended June 30, ~~2020.~~2021.

Refrigeration & Food Equipment segment earnings ~~decreased $34.2~~increased $52.1 million, or ~~49.4%~~148.9%, for the six months ended June 30, ~~2020,~~2021, as compared to the prior year comparable period. The increase was primarily due to conversion on increased volumes, improved operational efficiencies and benefits from prior restructuring programs, partially offset by increased material costs, most notably metals, and a prior year gain on the sale of AMS Chino. Segment margin ~~decreased~~increased to ~~5.8%~~10.9% from ~~9.6%~~5.8% in the prior year ~~period due to substantially reduced revenues and operational inefficiencies associated with COVID-19, increased restructuring expenses and a~~ comparable period.

~~$3.6 million~~

~~write-off of assets~~

~~, partially offset by the gain on sale from the disposition of AMS Chino 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~~for reinvestment in existing businesses and ~~fund~~ strategic ~~acquisitions, while maintaining our prudent capital structure on a short and long-term basis.~~acquisitions.

Cash Flow Summary

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


		Six Months Ended June 30,							Six Months Ended June 30,
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2020		2019		Cash Flows (dollars in thousands)	2021		2020
Net Cash Flows Provided By (Used In):	Net Cash Flows Provided By (Used In):					Net Cash Flows Provided By (Used In):
Operating activities	Operating activities	$	347,672	$	233,233	Operating activities	$	437,257	$	347,672
Investing activities	Investing activities	(298,274)		(287,445)		Investing activities	(151,203)		(298,274)
Financing activities	Financing activities	213,496		(24,529)		Financing activities	(200,188)		213,496

Operating Activities

Cash provided by operating activities for the six months ended June 30, ~~2020~~2021 increased approximately ~~$114.4~~$89.6 million compared to the comparable period in ~~2019.~~2020. This increase was primarily driven by ~~improvements in working capital of $84.3 million and permitted deferrals of tax payments partially offset by lower~~higher net earnings, excluding the impact of depreciation, amortization ~~loss on assets held for sale~~ and gain on sale of a ~~business.~~

~~We participated~~business as well as lower compensation payouts in ~~certain government economic stabilization programs~~2021 compared to ~~enhance our liquidity. We deferred~~2020. This increase was partially offset by higher investments in working capital to support business growth. Additionally, 2020 included the impact of permitted deferrals of approximately $40 million of U.S. and state income tax payments from the second to the third quarter of ~~2020.~~ ~~Additionally, under the U.S. CARES Act, we deferred~~2020 and deferrals of approximately ~~$10~~$10 million of payroll taxes in the second quarter of 2020 to ~~be paid equally in~~ the fourth quarters of 2021 and 2022. There were no such deferrals in 2021.

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


Adjusted Working Capital (dollars in thousands)	Adjusted Working Capital (dollars in thousands)	June 30, 2020		December 31, 2019		Adjusted Working Capital (dollars in thousands)	June 30, 2021		December 31, 2020
Accounts receivable	Accounts receivable	$	1,142,583	$	1,217,190	Accounts receivable	$	1,329,051	$	1,137,223
Inventories	Inventories	885,972		806,141		Inventories	977,831		835,804
Less: Accounts payable	Less: Accounts payable	912,588		983,293		Less: Accounts payable	1,006,557		853,942
Adjusted working capital	Adjusted working capital	$	1,115,967	$	1,040,038	Adjusted working capital	$	1,300,325	$	1,119,085

Adjusted working capital increased from December 31, ~~2019~~2020 by ~~$75.9~~$181.2 million, or ~~7.3%~~16.2%, to ~~$1.1~~$1.3 billion at June 30, ~~2020,~~2021, which reflected ~~a decrease of $74.6 million in accounts receivable,~~ an increase of ~~$79.8~~$191.8 million in accounts receivable and $142.0 million in inventory, ~~and a decrease~~partially offset by an increase in accounts payable of ~~$70.7~~$152.6 million. These amounts include the effects of acquisitions, dispositions and foreign currency translation. Accounts receivable increased compared to the prior year as a result of higher revenue. Inventories increased to support business growth and higher backlog which also drove an increase in accounts payable.

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

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Outstanding payments related to SCF programs are recorded within accounts payable in our consolidated balance sheets. As of June 30, 2021 and December 31, 2020, amounts due to financial institutions for suppliers using SCF were approximately $184 million and $139 million, respectively. SCF related payments are classified as a reduction to cash flows from operations. During the six months ended June 30, 2021 and 2020 amounts paid to SCF financial institutions were  approximately $378 million and $296  million, respectively.

Investing Activities

Cash provided ~~by or used in~~from investing activities ~~generally results~~is derived from cash outflows for capital expenditures and acquisitions, offset by proceeds from sales of businesses and property, plant and equipment. For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, we used cash in investing activities of ~~$298.3~~$151.2 million and ~~$287.4~~$298.3 million, respectively, driven mainly by the following factors:

•Acquisitions: During the six months ended June 30, 2021, we acquired AvaLAN and Blue Bite within the Fueling Solutions and Imaging & Identification segments, respectively, and Quantex and one other immaterial acquisition within the Pumps & Process Solutions segment for $81.2 million, net of cash acquired. During the six months ended June 30, 2020, we acquired Systech, Soft-Pak, and Em-tec within the Imaging & Identification, Engineered Products, and Pumps & Process Solutions segments, respectively, for $238.8 million, net of cash acquired. During the six months ended June 30, 2019, we acquired Belanger, Inc. and All-Flo Pump Company, Limited within the Fueling Solutions and Pumps & Process Solutions segments for $215.3 million, net of cash acquired.

•Capital spending: Our capital expenditures decreased ~~$11.9~~$5.9 million during the six months ended June 30, ~~2020~~2021 compared to the six months ended June 30, ~~2019.~~2020. The decrease is primarily due to the completion of large projects in ~~line with our reduced~~the prior year. We continue to expect full year 2021 capital ~~spending plan for the year as a result of COVID-19, without deferring strategic ongoing initiatives.~~expenditures to be approximately $175-$200 million.

•Proceeds from sale of businesses: ~~For~~There were no proceeds from the sale of businesses during the six months ended June 30, 2021. For the six months ended June 30, 2020, we received proceeds of $16.9 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 months ended June 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~~2021 will be funded from available cash and internally generated funds and through the issuance of commercial paper, use of lines of credit or public or private debt ~~or equity~~ markets, as necessary.

Financing Activities

Our cash flow from financing activities generally relates to the use of cash for ~~the repurchase~~purchases of our common stock and ~~payments~~payment of dividends, offset by net borrowing activity. For the six months ended June 30, 2021 and 2020, we used cash totaling $200.2 million and ~~2019,~~generated cash ~~provided by~~totaling $213.5 million, respectively, for financing activities, ~~was $213.5 million and used in financing activities was $24.5 million, respectively,~~ with the activity primarily attributable to the following:

•Repurchase of ~~comm~~oncommon stock: During the six months ended June 30, 2021, we used $21.6 million to repurchase 182,951 shares. During the six months ended June 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 the year. There were no share repurchases during the six months ended June 30, 2019.shares.

•Long-term debt, commercial paper and notes payable: During the six months ended June 30, 2021, we did not borrow or have proceeds from long-term debt, commercial paper or notes payable. During the six months ended June 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.~~same period. During the six months ended June 30, 2020, we also received net proceeds from commercial paper of $420.3 million. ~~During the six months ended June 30, 2019, we received net proceeds from commercial paper of $137.4 million primarily to fund the acquisition of Belanger.~~

•Dividend payments: Dividends paid to shareholders during the six months ended June 30, ~~2020~~2021 totaled ~~$141.6~~$142.7 million as compared to ~~$139.7~~$141.6 million during the same period in ~~2019.~~2020. Our dividends paid per common share increased ~~2.1%~~1.0% to ~~$0.98~~$0.99 during the six months ended June 30, ~~2020~~2021 compared to $~~0.96~~0.98 during the same period in 2019. The number of common shares outstanding decreased during the six months ended June 30, 2020 compared to the same period in 2019 as a result of share repurchases completed in 2020 and the second half of 2019.2020.

•Payments to settle employee tax obligations: Payments to settle tax obligations from the exercise of share-based awards ~~declined $10.0~~increased $21.9 million compared to the prior year period. The ~~decrease~~increase is primarily due to the ~~decrease~~increase in the number of shares exercised ~~partially offset by~~and an increase in the average stock price compared to the prior year period.

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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,
Free Cash Flow (dollars in thousands)
2020 2019
Cash flow provided by operating activities $ 347,672 $ 233,233
Less: Capital expenditures (79,171) (91,092)
Free cash flow $ 268,501 $ 142,141
Free cash flow as a percentage of revenue 8.5 % 4.0 %
Free cash flow as a percentage of net earnings 89.2 % 46.8 %


	Six Months Ended June 30,
Free Cash Flow (dollars in thousands)	2021			2020
Cash flow provided by operating activities	$	437,257		$	347,672
Less: Capital expenditures	(73,231)			(79,171)
Free cash flow	$	364,026		$	268,501

Free cash flow as a percentage of revenue	9.3		%	8.5		%

Free cash flow as a percentage of net earnings	73.2		%	89.2		%

For the six months ended June 30, ~~2020,~~2021, we generated free cash flow of ~~$268.5~~$364.0 million, representing ~~8.5%~~9.3% of revenue and ~~89.2%~~73.2% of net earnings. Free cash flow for the six months ended June 30, ~~2020~~2021 increased ~~$126.4~~$95.5 million compared to the prior year period, ~~primarily~~ due to higher operating cash flow primarily as a result of ~~improvements~~higher earnings and lower compensation payments and capital expenditures, partially offset by higher investments in working capital to support growth, and ~~permitted~~ deferrals of tax payments in 2020 that did not repeat in 2021, as previously ~~noted, and lower capital expenditures.~~

We maintained positive free cash flow in the second quarter by proactively managing our working capital. We will continue this focus in the second half of the year and beyond. We also continued our plan to significantly reduce our capital spend for the year, without deferring strategic ongoing initiatives. We reduced 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.~~noted.

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 30, ~~2020,~~2021, we maintained a $1 billion Credit Agreement with a syndicate of banks with an expiration date of October 4, 2024. The Credit Agreement is used as liquidity back-up for our commercial paper ~~program.~~program and for general corporate purposes.

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 in the second quarter of 2020 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. T~~he 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 30, ~~2020~~2021 and had a coverage ratio of ~~10.7~~13.9 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 30, ~~2020,~~2021, our cash and cash equivalents totaled ~~$649.0~~$601.4 million, of which ~~$274.8~~$481.2 million was held outside the United States. At December 31, ~~2019,~~2020, our cash and cash equivalents totaled ~~$397.3~~$513.1 million, of which ~~$273.1~~$345.9 million was held outside the United States. Cash and cash equivalents are invested in highly liquid investment-grade money market instruments and bank deposits with maturities of three months or less. We invest any cash in excess of near-term requirements in money market

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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)	June 30, 2021			December 31, 2020

Commercial paper		505,000			84,700

Long-term debt	Long-term debt	3,000,870			2,985,716			Long-term debt	$	3,083,246		$	3,108,829
Total debt	Total debt	3,505,870			3,070,416			Total debt	3,083,246			3,108,829
Less: Cash and cash equivalents	Less: Cash and cash equivalents	(649,032)			(397,253)			Less: Cash and cash equivalents	(601,359)			(513,075)
Net debt	Net debt	2,856,838			2,673,163			Net debt	2,481,887			2,595,754
Add: Stockholders' equity	Add: Stockholders' equity	3,089,527			3,032,660			Add: Stockholders' equity	3,719,304			3,385,773
Net capitalization	Net capitalization	$	5,946,365		$	5,705,823		Net capitalization	$	6,201,191		$	5,981,527
Net debt to net capitalization	Net debt to net capitalization	48.0		%	46.8		%	Net debt to net capitalization	40.0		%	43.4		%

Our net debt to net capitalization ratio ~~increased~~decreased to ~~48.0%~~40.0% at June 30, ~~2020~~2021 compared to ~~46.8%~~43.4% at December 31, ~~2019.~~2020. Net debt ~~increased $183.7~~decreased $113.9 million during the period primarily due to an increase in ~~commercial paper partially offset by an increase in~~ cash and cash ~~equivalents.~~equivalents and a decrease in long-term debt as a result of foreign currency translation on Euro denominated notes. Stockholders' equity increased ~~$56.9~~$333.5 million primarily as a result of earnings during the period, partially offset by dividends paid, exercises of share-based awards 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”, "headwind", "tailwind" and other words and terms that use the future tense or have a similar meaning. Forward-looking statements are based on current expectations and are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19 or other future pandemics on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, changes in law, including the effect of U.S. tax ~~reform~~laws and developments with respect to trade policy and tariffs, our ability to identify and complete acquisitions and integrate and realize

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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.~~2020. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

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

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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 &and 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 months ended June 30, ~~2020.~~2021. For a discussion of our exposure to market risk, refer to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," contained in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019.~~2020.

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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 30, ~~2020.~~2021.

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

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

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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,~~November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares ~~of its common stock~~beginning on January 1, 2021 through December 31, ~~2020.~~2023. No share repurchases were made under the ~~February 2018~~November 2020 authorization during the three months ended June 30, ~~2020.~~2021. As of June 30, ~~2020,~~2021, the number of shares still available for repurchase under the ~~February 2018~~November 2020 share repurchase authorization was ~~7,811,385.~~19,817,049.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits


10.1			Dover Corporation 2021 Omnibus Incentive Plan, filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 10, 2021 (SEC File No. 001-04018) is incorporated by reference. *

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

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

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

101			The following materials from Dover Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2020~~2021 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Earnings, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated 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, 2020~~20, 2021	/s/ Brad M. Cerepak
		Brad M. Cerepak
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

Date:	July ~~22, 2020~~20, 2021	/s/ Ryan W. Paulson
		Ryan W. Paulson
		Vice President, Controller
		(Principal Accounting Officer)

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	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


	June 30, 2020		December 31, 2019
Short-term

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


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



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


	Three Months Ended										Three Months Ended
	June 30, 2020										June 30, 2019
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	$	36,541	$	8,028	$	44,569	$	(14,967)	$	989	$	(13,978)
Pension and other post-retirement benefit plans	2,515		(421)		2,094		766		(177)		589
Changes in fair value of cash flow hedges	1,651		(365)		1,286		(4,780)		1,002		(3,778)

Total other comprehensive (loss) earnings	$	40,707	$	7,242	$	47,949	$	(18,981)	$	1,814	$	(17,167)


	Six Months Ended										Six Months Ended
	June 30, 2020										June 30, 2019
	Pre-tax		Tax		Net of tax		Pre-tax		Tax		Net of tax
Foreign currency translation adjustments	$	(51,874)	$	2,889	$	(48,985)	$	34,819	$	242	$	35,061
Pension and other post-retirement benefit plans	5,037		(989)		4,048		1,718		(382)		1,336
Changes in fair value of cash flow hedges	(3,423)		757		(2,666)		(1,787)		373		(1,414)

Total other comprehensive (loss) earnings	$	(50,260)	$	2,657	$	(47,603)	$	34,750	$	233	$	34,983