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 SeptemberJune 30, 20222023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission File Number: 1-4018
Image1.jpg
(Exact name of registrant as specified in its charter)
Delaware53-0257888
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
3005 Highland Parkway 
Downers Grove, Illinois60515
(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 classTrading Symbol(s)Name of each exchange on which registered
Common StockDOVNew York Stock Exchange
1.250% Notes due 2026DOV 26New York Stock Exchange
0.750% Notes due 2027DOV 27New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes   No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act    .
Large Accelerated FilerAccelerated FilerEmerging Growth Company
Non-Accelerated FilerSmaller Reporting Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No  
The number of shares outstanding of the Registrant’s common stock as of October 13, 2022July 18, 2023 was 140,353,950.139,873,825.



Dover Corporation
Form 10-Q
Table of Contents
Page
 
 
 
 
  
 



Table of Contents


Item 1. Financial Statements

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
RevenueRevenue$2,158,291 $2,018,269 $6,368,907 $5,917,846 Revenue$2,100,086 $2,158,715 $4,179,109 $4,210,616 
Cost of goods and servicesCost of goods and services1,385,541 1,263,690 4,071,680 3,669,547 Cost of goods and services1,341,250 1,377,432 2,673,254 2,686,139 
Gross profitGross profit772,750 754,579 2,297,227 2,248,299 Gross profit758,836 781,283 1,505,855 1,524,477 
Selling, general and administrative expensesSelling, general and administrative expenses402,339 412,553 1,270,615 1,249,593 Selling, general and administrative expenses434,340 424,433 866,754 868,276 
Operating earningsOperating earnings370,411 342,026 1,026,612 998,706 Operating earnings324,496 356,850 639,101 656,201 
Interest expenseInterest expense29,789 26,433 83,330 79,917 Interest expense33,804 26,989 68,018 53,541 
Interest incomeInterest income(1,244)(1,466)(2,968)(3,088)Interest income(2,653)(949)(4,744)(1,724)
Other income, netOther income, net(11,167)(10,460)(17,842)(18,236)Other income, net(6,678)(4,546)(10,486)(6,675)
Earnings before provision for income taxesEarnings before provision for income taxes353,033 327,519 964,092 940,113 Earnings before provision for income taxes300,023 335,356 586,313 611,059 
Provision for income taxesProvision for income taxes67,007 63,763 162,295 179,080 Provision for income taxes57,784 45,738 115,500 95,288 
Net earningsNet earnings$286,026 $263,756 $801,797 $761,033 Net earnings$242,239 $289,618 $470,813 $515,771 
Net earnings per share:Net earnings per share:Net earnings per share:
BasicBasic$2.01 $1.83 $5.59 $5.29 Basic$1.73 $2.01 $3.37 $3.58 
DilutedDiluted$2.00 $1.81 $5.55 $5.24 Diluted$1.72 $2.00 $3.35 $3.56 
Weighted average shares outstanding:Weighted average shares outstanding:Weighted average shares outstanding:
BasicBasic142,506 143,976 143,469 143,895 Basic139,862 143,832 139,810 143,959 
DilutedDiluted143,257 145,440 144,413 145,220 Diluted140,578 144,669 140,597 144,998 
 

See Notes to Condensed Consolidated Financial Statements


1

Table of Contents

DOVER CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2022202120222021
Net earnings$286,026 $263,756 $801,797 $761,033 
Other comprehensive loss, net of tax
Foreign currency translation adjustments:
Foreign currency translation losses(117,460)(26,155)(216,665)(17,567)
Reclassification of foreign currency translation losses to earnings— — 5,915 — 
Total foreign currency translation adjustments (net of $(21,020), $(5,446), $(39,990) and $(11,669) tax provision, respectively)(117,460)(26,155)(210,750)(17,567)
Pension and other post-retirement benefit plans:
Amortization of actuarial losses included in net periodic pension cost327 2,353 1,032 7,080 
Amortization of prior service costs included in net periodic pension cost223 214 670 646 
Total pension and other post-retirement benefit plans (net of $(195), $(771), $(605) and $(2,320) tax provision, respectively)550 2,567 1,702 7,726 
Changes in fair value of cash flow hedges:
Unrealized net gains (losses) arising during period1,503 (212)2,317 4,107 
Net gains reclassified into earnings(1,290)(206)(3,911)(3,077)
Total cash flow hedges (net of $(61), $122, $458 and $(302) tax benefit (provision), respectively)213 (418)(1,594)1,030 
Other comprehensive loss, net of tax(116,697)(24,006)(210,642)(8,811)
Comprehensive earnings$169,329 $239,750 $591,155 $752,222 

 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net earnings$242,239 $289,618 $470,813 $515,771 
Other comprehensive earnings (loss), net of tax
Foreign currency translation adjustments:
Foreign currency translation gain (loss)21,335 (77,552)37,907 (99,205)
Reclassification of foreign currency translation losses to earnings— — — 5,915 
Total foreign currency translation adjustments (net of $3,166, $(10,539), $7,216 and $(18,970) tax benefit (provision), respectively)21,335 (77,552)37,907 (93,290)
Pension and other post-retirement benefit plans:
Amortization of actuarial (gain) loss included in net periodic pension cost(528)345 (1,062)705 
Amortization of prior service costs included in net periodic pension cost255 226 519 447 
Total pension and other post-retirement benefit plans (net of $83, $(202), $165 and $(410) tax benefit (provision), respectively)(273)571 (543)1,152 
Changes in fair value of cash flow hedges:
Unrealized net (loss) gain arising during period(268)(1,150)(341)814 
Net loss (gain) reclassified into earnings852 (1,045)1,698 (2,621)
Total cash flow hedges (net of $(167), $631, $(387) and $519 tax (provision) benefit, respectively)584 (2,195)1,357 (1,807)
Other comprehensive earnings (loss), net of tax21,646 (79,176)38,721 (93,945)
Comprehensive earnings$263,885 $210,442 $509,534 $421,826 


See Notes to Condensed Consolidated Financial Statements

2

Table of Contents

DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, 2022December 31, 2021 June 30, 2023December 31, 2022
ASSETSASSETSASSETS
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$306,002 $385,504 Cash and cash equivalents$285,777 $380,868 
Receivables, netReceivables, net1,497,062 1,347,514 Receivables, net1,561,162 1,516,871 
Inventories, netInventories, net1,407,797 1,191,095 Inventories, net1,396,260 1,366,608 
Prepaid and other current assetsPrepaid and other current assets166,184 137,596 Prepaid and other current assets171,478 159,118 
Total current assetsTotal current assets3,377,045 3,061,709 Total current assets3,414,677 3,423,465 
Property, plant and equipment, netProperty, plant and equipment, net958,894 957,310 Property, plant and equipment, net1,016,206 1,004,825 
GoodwillGoodwill4,532,333 4,558,822 Goodwill4,698,604 4,669,494 
Intangible assets, netIntangible assets, net1,313,001 1,359,522 Intangible assets, net1,274,179 1,333,735 
Other assets and deferred chargesOther assets and deferred charges471,068 466,264 Other assets and deferred charges497,920 465,000 
Total assetsTotal assets$10,652,341 $10,403,627 Total assets$10,901,586 $10,896,519 
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:Current liabilities:  Current liabilities:  
Short-term borrowingsShort-term borrowings$788,860 $105,702 Short-term borrowings$446,175 $735,772 
Accounts payableAccounts payable1,143,253 1,073,568 Accounts payable1,028,928 1,068,144 
Accrued compensation and employee benefitsAccrued compensation and employee benefits232,247 302,978 Accrued compensation and employee benefits235,773 269,785 
Deferred revenueDeferred revenue246,181 227,549 Deferred revenue261,202 256,933 
Accrued insuranceAccrued insurance105,095 101,448 Accrued insurance87,464 92,876 
Other accrued expensesOther accrued expenses321,487 347,097 Other accrued expenses319,263 318,337 
Federal and other income taxesFederal and other income taxes51,631 91,999 Federal and other income taxes45,291 31,427 
Total current liabilitiesTotal current liabilities2,888,754 2,250,341 Total current liabilities2,424,096 2,773,274 
Long-term debtLong-term debt2,842,662 3,018,714 Long-term debt2,976,573 2,942,513 
Deferred income taxesDeferred income taxes389,133 364,117 Deferred income taxes340,554 375,150 
Noncurrent income tax payableNoncurrent income tax payable44,313 48,385 Noncurrent income tax payable28,024 44,313 
Other liabilitiesOther liabilities496,053 532,542 Other liabilities470,234 474,903 
Stockholders' equity:Stockholders' equity:  Stockholders' equity:  
Total stockholders' equityTotal stockholders' equity3,991,426 4,189,528 Total stockholders' equity4,662,105 4,286,366 
Total liabilities and stockholders' equityTotal liabilities and stockholders' equity$10,652,341 $10,403,627 Total liabilities and stockholders' equity$10,901,586 $10,896,519 


See Notes to Condensed Consolidated Financial Statements

















3

Table of Contents


DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except per share data)
(Unaudited)
Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at June 30, 2022$259,601 $863,717 $9,816,960 $(247,997)$(6,303,758)$4,388,523 
Balance at April 1, 2023Balance at April 1, 2023$259,794 $866,705 $10,380,895 $(249,148)$(6,797,685)$4,460,561 
Net earningsNet earnings— — 286,026 — — 286,026 Net earnings— — 242,239 — — 242,239 
Dividends paid ($0.505 per share)Dividends paid ($0.505 per share)— — (72,580)— — (72,580)Dividends paid ($0.505 per share)— — (70,701)— — (70,701)
Common stock issued for the exercise of share-based awardsCommon stock issued for the exercise of share-based awards(177)— — — (172)Common stock issued for the exercise of share-based awards24 1,895 — — — 1,919 
Stock-based compensation expenseStock-based compensation expense— 6,326 — — — 6,326 Stock-based compensation expense— 6,441 — — — 6,441 
Common stock acquired, including accelerated share repurchase program— (100,000)— — (400,000)(500,000)
Other comprehensive loss, net of tax— — — (116,697)— (116,697)
Balance at September 30, 2022$259,606 $769,866 $10,030,406 $(364,694)$(6,703,758)$3,991,426 
Other comprehensive earnings, net of taxOther comprehensive earnings, net of tax— — — 21,646 — 21,646 
Balance at June 30, 2023Balance at June 30, 2023$259,818 $875,041 $10,552,433 $(227,502)$(6,797,685)$4,662,105 

Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at June 30, 2021$259,371 $853,887 $8,962,863 $(138,059)$(6,218,758)$3,719,304 
Balance at April 1, 2022Balance at April 1, 2022$259,573 $858,587 $9,599,195 $(168,821)$(6,218,758)$4,329,776 
Net earningsNet earnings— — 263,756 — — 263,756 Net earnings— — 289,618 — — 289,618 
Dividends paid ($0.50 per share)Dividends paid ($0.50 per share)— — (72,107)— — (72,107)Dividends paid ($0.50 per share)— — (71,853)— — (71,853)
Common stock issued for the exercise of share-based awardsCommon stock issued for the exercise of share-based awards25 (1,795)— — — (1,770)Common stock issued for the exercise of share-based awards28 (2,088)— — — (2,060)
Stock-based compensation expenseStock-based compensation expense— 6,660 — — — 6,660 Stock-based compensation expense— 7,218 — — — 7,218 
Common stock acquiredCommon stock acquired— — — — (85,000)(85,000)
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — — (79,176)— (79,176)
Other comprehensive loss, net of tax— — — (24,006)— (24,006)
Other, net— (19)— — — (19)
Balance at September 30, 2021$259,396 $858,733 $9,154,512 $(162,065)$(6,218,758)$3,891,818 
Balance at June 30, 2022Balance at June 30, 2022$259,601 $863,717 $9,816,960 $(247,997)$(6,303,758)$4,388,523 



See Notes to Condensed Consolidated Financial Statements





















4

Table of Contents



DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except per share data)
(Unaudited)
 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at December 31, 2021$259,457 $857,636 $9,445,245 $(154,052)$(6,218,758)$4,189,528 
Net earnings— — 801,797 — — 801,797 
Dividends paid ($1.505 per share)— — (216,636)— — (216,636)
Common stock issued for the exercise of share-based awards149 (12,427)— — — (12,278)
Stock-based compensation expense— 24,657 — — — 24,657 
Common stock acquired, including accelerated share repurchase program— (100,000)— — (485,000)(585,000)
Other comprehensive loss, net of tax— — — (210,642)— (210,642)
Balance at September 30, 2022$259,606 $769,866 $10,030,406 $(364,694)$(6,703,758)$3,991,426 
 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at January 1, 2023$259,644 $867,560 $10,223,070 $(266,223)$(6,797,685)$4,286,366 
Net earnings— — 470,813 — $— 470,813 
Dividends paid ($1.01 per share)— — (141,474)— — (141,474)
Common stock issued for the exercise of share-based awards174 (11,242)— — — (11,068)
Stock-based compensation expense— 18,723 — — — 18,723 
Other comprehensive earnings, net of tax— — — 38,721 — 38,721 
Other, net— — 24 — 24 
Balance at June 30, 2023$259,818 $875,041 $10,552,433 $(227,502)$(6,797,685)$4,662,105 

Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at December 31, 2020$258,982 $868,882 $8,608,284 $(153,254)$(6,197,121)$3,385,773 
Balance at January 1, 2022Balance at January 1, 2022$259,457 $857,636 $9,445,245 $(154,052)$(6,218,758)$4,189,528 
Net earningsNet earnings— — 761,033 — — 761,033 Net earnings— — 515,771 — — 515,771 
Dividends paid ($1.49 per share)— — (214,805)— — (214,805)
Dividends paid ($1.00 per share)Dividends paid ($1.00 per share)— — (144,056)— — (144,056)
Common stock issued for the exercise of share-based awardsCommon stock issued for the exercise of share-based awards414 (35,252)— — — (34,838)Common stock issued for the exercise of share-based awards144 (12,250)— — — (12,106)
Stock-based compensation expenseStock-based compensation expense— 25,053 — — — 25,053 Stock-based compensation expense— 18,331 — — — 18,331 
Common stock acquiredCommon stock acquired— — — — (21,637)(21,637)Common stock acquired— — — — (85,000)(85,000)
Other comprehensive loss, net of taxOther comprehensive loss, net of tax— — — (8,811)— (8,811)Other comprehensive loss, net of tax— — — (93,945)— (93,945)
Other, net— 50 — — — 50 
Balance at September 30, 2021$259,396 $858,733 $9,154,512 $(162,065)$(6,218,758)$3,891,818 
Balance at June 30, 2022Balance at June 30, 2022$259,601 $863,717 $9,816,960 $(247,997)$(6,303,758)$4,388,523 



See Notes to Condensed Consolidated Financial Statements















5

Table of Contents

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September 30, Six Months Ended June 30,
20222021 20232022
Operating Activities:Operating Activities:  Operating Activities:  
Net earningsNet earnings$801,797 $761,033 Net earnings$470,813 $515,771 
Adjustments to reconcile net earnings to cash from operating activities:
Adjustments to reconcile net earnings to cash provided by operating activities:Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization230,808 218,236 Depreciation and amortization156,687 154,294 
Stock-based compensation expenseStock-based compensation expense24,657 25,053 Stock-based compensation expense18,723 18,331 
Reclassification of foreign currency translation losses to earningsReclassification of foreign currency translation losses to earnings5,915 — Reclassification of foreign currency translation losses to earnings— 5,915 
Other, netOther, net(35,814)(11,969)Other, net16,404 (8,152)
Cash effect of changes in assets and liabilities:Cash effect of changes in assets and liabilities:Cash effect of changes in assets and liabilities:
Accounts receivable(227,831)(222,521)
Accounts receivable, netAccounts receivable, net(32,060)(204,676)
InventoriesInventories(286,437)(225,522)Inventories(15,957)(223,804)
Prepaid expenses and other assetsPrepaid expenses and other assets(14,001)(38,290)Prepaid expenses and other assets(18,390)(17,923)
Accounts payableAccounts payable121,513 199,877 Accounts payable(40,216)147,829 
Accrued compensation and employee benefitsAccrued compensation and employee benefits(62,208)32,284 Accrued compensation and employee benefits(52,545)(72,802)
Accrued expenses and other liabilitiesAccrued expenses and other liabilities(19,700)42,084 Accrued expenses and other liabilities(30,635)(4,937)
Accrued and deferred taxes, netAccrued and deferred taxes, net(71,618)8,321 Accrued and deferred taxes, net(36,286)(107,390)
Net cash provided by operating activitiesNet cash provided by operating activities467,081 788,586 Net cash provided by operating activities436,538 202,456 
Investing Activities:Investing Activities:  Investing Activities:  
Additions to property, plant and equipmentAdditions to property, plant and equipment(166,039)(121,157)Additions to property, plant and equipment(88,454)(100,577)
Acquisitions, net of cash acquired(229,296)(171,287)
Acquisitions, net of cash and cash equivalents acquiredAcquisitions, net of cash and cash equivalents acquired— (8,453)
Proceeds from sale of property, plant and equipmentProceeds from sale of property, plant and equipment4,215 6,570 Proceeds from sale of property, plant and equipment3,171 3,898 
OtherOther(10,941)(768)Other(727)(10,721)
Net cash used in investing activitiesNet cash used in investing activities(402,061)(286,642)Net cash used in investing activities(86,010)(115,853)
Financing Activities:Financing Activities:  Financing Activities:  
Repurchase of common stock, including prepayment under accelerated share repurchase program(585,000)(21,637)
Repurchase of common stockRepurchase of common stock— (85,000)
Proceeds from commercial paper and other short-term borrowings, net682,928 — 
Change in commercial paper and other short-term borrowings, netChange in commercial paper and other short-term borrowings, net(289,597)287,952 
Dividends paid to stockholdersDividends paid to stockholders(216,636)(214,805)Dividends paid to stockholders(141,474)(144,056)
Payments to settle employee tax obligations on exercise of share-based awardsPayments to settle employee tax obligations on exercise of share-based awards(12,278)(34,838)Payments to settle employee tax obligations on exercise of share-based awards(11,068)(12,106)
OtherOther(2,593)(3,518)Other(2,350)(1,525)
Net cash used in financing activities(133,579)(274,798)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(444,489)45,265 
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(10,943)(1,077)Effect of exchange rate changes on cash and cash equivalents(1,130)(2,001)
Net (decrease) increase in cash and cash equivalentsNet (decrease) increase in cash and cash equivalents(79,502)226,069 Net (decrease) increase in cash and cash equivalents(95,091)129,867 
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period385,504 513,075 Cash and cash equivalents at beginning of period380,868 385,504 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$306,002 $739,144 Cash and cash equivalents at end of period$285,777 $515,371 


See Notes to Condensed Consolidated Financial Statements
6

Table of Contents
DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

1. Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statementscondensed 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 Statementscondensed consolidated financial statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes for Dover Corporation ("Dover" or the "Company") for the year ended December 31, 2021,2022, included in the Company's Annual Report on Form 10-K filed with the SEC on February 11, 2022.10, 2023. The year-end Condensed Consolidated Balance Sheetcondensed consolidated balance sheet was derived from audited financial statements. 

The accompanying unaudited interim Condensed Consolidated Financial Statementscondensed 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 Statementscondensed 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 Statementscondensed 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

Revenue from Contracts with Customers

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
Revenue from contracts with customers is disaggregated by segment and geographic location, as they best depict the nature and amount of the Company’s revenue. See Note 15 — Segment Information for further details for revenue by segment and geographic location.

Performance Obligations

Approximately 95% of the Company’s revenue is recognized at a point in time, rather than over time, as the Company completes its performance obligations. Specifically, revenue is recognized when control transfers to the customer, typically upon shipment or completion of installation, testing, certification, or other substantive acceptance provisions required under the contract. Less thanApproximately 5% of the Company’s revenue is recognized over time and relates to the sale of equipment or services, including software solutions and services, in which the Company transfers control of a good or service over time and the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs, or ourthe Company's performance creates or enhances an asset the customer controls as the asset is created or enhanced, or ourthe Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for its performance to date plus a reasonable margin.

Revenue fromA majority of the Company's contracts have a single performance obligation which represents, in most cases, the equipment or product being sold to the customer. Some contracts include multiple performance obligations such as a product and the related installation, extended warranty, software and digital solutions, and/or maintenance services. For contracts with customers is disaggregated by segment and geographic location, as they best depictmultiple performance obligations, the nature andCompany allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the Company’s revenue. See Note 16 — Segment Information for further details for revenue by segment and geographic location.promised goods or services underlying each performance obligation.

At SeptemberJune 30, 2022,2023, we estimated that $318 million$235,410 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 expectThe Company expects to recognize
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
approximately 73%73.8% of ourthe Company's unsatisfied (or partially unsatisfied) performance obligations as revenue through 2023,2024, with the remaining balance to be recognized in 20242025 and thereafter.

The Company applied the practical expedient that permits the omission of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

Contract Balances

Contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. Contract liabilities relate to advance consideration received from customers or advance billings for which revenue has not been recognized and are reduced when the associated revenue from the contract is recognized.

The following table provides information about contract assets and contract liabilities from contracts with customers:
September 30, 2022December 31, 2021December 31, 2020 June 30, 2023December 31, 2022December 31, 2021
Contract assetsContract assets14,660 11,440 15,020 Contract assets$15,484 $11,074 $11,440 
Contract liabilities - currentContract liabilities - current246,181 227,549 184,845 Contract liabilities - current261,202 256,933 227,549 
Contract liabilities - non-currentContract liabilities - non-current20,872 21,513 13,921 Contract liabilities - non-current17,305 19,879 21,513 

The revenue recognized during the ninesix months ended SeptemberJune 30, 20222023 and 20212022 that was included in contract liabilities at the beginning of the period inclusive of adjustments, amounted to $178,098$185,028 and $155,255,$157,175, respectively.

3. Acquisitions

2023 Acquisitions

There were no acquisitions during the six monthsended June 30, 2023.

2022 Acquisitions

During the six months ended June 30, 2022, the Company completed one acquisition. On May 2, 2022, the Company acquired 100% of the equity interests of AMN DPI ("AMN"), a designer and manufacturer of polymer pelletizing tools, for $8,100, net of cash acquired. The AMN acquisition extended the Company's reach into polymer processing equipment production within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $1,903 and intangible assets of $5,625, primarily related to customer intangibles.

4. Inventories, net
 June 30, 2023December 31, 2022
Raw materials$800,200 $812,066 
Work in progress260,241 230,865 
Finished goods477,598 458,881 
Subtotal1,538,039 1,501,812 
Less reserves(141,779)(135,204)
Total$1,396,260 $1,366,608 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
3. Acquisitions

2022 Acquisitions

During the nine months ended September 30, 2022, the Company acquiredtwo businesses in separate transactions for total consideration of $229,296, net of cash acquired. Of these transactions, one includes additional consideration contingent on achieving certain financial performance targets. These businesses were acquired to complement and expand upon existing operations within the 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 non-deductible for U.S. income tax purposes for these acquisitions.

Malema

On July 1, 2022, the Company acquired 99.7% of the equity interests in Malema Engineering Corporation and its related foreign entities ("Malema"), a designer and manufacturer of flow measurement and control instruments serving customers in the biopharmaceutical, semiconductor and industrial sectors, for $220,843, net of cash acquired, subject to contingent consideration. Subsequent to September 30, 2022, the Company acquired the remaining 0.3% of equity interests in Malema. The Malema acquisition expands the Company's biopharma single-use production offering within the Pumps & Process Solutions segment. The contingent consideration is based upon meeting certain financial performance targets for each twelve-month period over the next two years from March 31, 2022, with a range of payouts from $0 to $50,000. No value is attributed to the current estimated fair value of contingent earn-out liability, which will be reassessed quarterly during the performance periods. In connection with this acquisition, the Company recorded goodwill of $151,701 and intangible assets of $64,000 for customer intangibles, $16,000 for patents, and $4,000 for trademarks. The fair value for customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. The fair value of assets acquired also includes trade receivables of $2,928. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances.

The following presents the preliminary allocation of purchase price to the assets acquired and liabilities assumed under the Malema acquisition, based on their estimated fair values at acquisition date:
Total
Current assets, net of cash acquired$8,985 
Property, plant and equipment2,733 
Goodwill151,701 
Intangible assets84,000 
Other assets and deferred charges1,159 
Current liabilities(5,676)
Non-current liabilities(22,059)
Net assets acquired$220,843 

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

Amount allocatedUseful life
(in years)
Goodwill - non-deductible$151,701 na
Customer intangibles64,000 15
Patents16,000 10
Trademarks4,000 15
$235,701 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Other acquisitions

On May 2, 2022, the Company acquired 100% of the voting stock of AMN DPI ("AMN"), a designer and manufacturer of polymer pelletizing tools, for $8,453, net of cash acquired. The AMN acquisition extends the Company's reach into polymer processing equipment production within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $2,315 and intangible assets of $5,349, primarily related to customer intangibles.

2021 Acquisitions

During the nine months ended September 30, 2021, the Company acquired six businesses in separate transactions for total consideration of $179,161, net of cash acquired and including contingent consideration. These businesses were acquired to complement and expand upon existing operations within the Engineered Products, Imaging & Identification, Pumps & Process Solutions, and Clean Energy & Fueling segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill of $29,317 is deductible for income tax purposes and $83,142 is non-deductible for income tax purposes for these acquisitions.

On September 15, 2021, the Company acquired 100% of the voting stock of The Espy Corporation ("Espy"), a manufacturer of advanced electronic radio frequency sensor systems, for $60,457, net of cash acquired. The Espy acquisition strengthens the Company's offering of complete signal intelligence systems with integrated software within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $29,317 and intangible assets of $21,100, primarily related to customer intangibles. The Espy acquisition was treated as an asset acquisition for U.S. income tax purposes, classifying the goodwill and intangibles as tax deductible.

On July 23, 2021, the Company acquired 100% of the voting stock of CDS Visual, Inc. ("CDS Visual"), a leading provider of 3D visualization solutions tailored for industrial applications, for $29,147, net of cash acquired. The CDS Visual acquisition extends the Company's reach of customer-facing digital capabilities within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $20,863 and intangible assets of $9,930, primarily related to technology.

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 $30,143, 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 $20,458 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 $23,747, 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 $14,327 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 $34,144, net of cash acquired. The AvaLAN acquisition extends the Company's reach into the systems and software offering within the Clean Energy & Fueling segment. In connection with this acquisition, the Company recorded goodwill of $26,803 and intangible assets of $14,630, primarily related to customer intangibles.

One other immaterial acquisition was completed during the nine monthsended September 30, 2021 within the Pumps & Process Solutions segment.

RegO

On December 28, 2021, the Company acquired 100% of the voting stock of ECI Holding Company, LLC ("RegO"), a provider of highly-engineered components and services that facilitate the production, storage, and distribution of cryogenic gases, for $626,620, net of cash acquired and inclusive of the impact of measurement period adjustments discussed below. In connection with this acquisition, the Company recorded goodwill of $158,894 deductible for income tax purposes and $122,301 non-deductible for income tax purposes. The Company also recorded intangible assets of $173,000 for customer intangibles,
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
$40,000 for patents, and $21,000 for trademarks. The fair value of customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. The fair value of assets acquired also includes trade receivables of $33,900. The gross amount is $34,606, of which $706 is expected to be uncollectible. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances. During the nine months ended September 30, 2022, the Company recorded measurement period adjustments primarily related to its preliminary estimates of deferred taxes and changes in net working capital. These adjustments are based on facts and circumstances that existed as of the acquisition date which resulted in an increase in goodwill of $4,219.

The following presents the updated preliminary allocation of purchase price, net of cash acquired of $10,382, to the assets acquired and liabilities assumed under the RegO acquisition, based on their estimated fair values at their acquisition dates:
Total
Accounts receivable$33,900 
Inventories72,551 
Other current assets2,958 
Property, plant and equipment50,027 
Goodwill281,195 
Intangible assets234,000 
Other assets and deferred charges884 
Current liabilities(20,150)
Non-current liabilities(28,745)
Net assets acquired$626,620 

The amounts assigned to goodwill and major intangible asset classifications were as follows:
Amount allocatedUseful life
(in years)
Goodwill - tax deductible$158,894 na
Goodwill - non-deductible122,301 na
Customer intangibles173,000 15
Patents40,000 12
Trademarks21,000 16
$515,195 

Acme Cryogenics

On December 16, 2021, the Company acquired 100% of the voting stock of Acme Cryo Intermediate Inc. ("Acme Cryogenics"), a provider of highly-engineered components and services that facilitate the production, storage, and distribution of cryogenic gases, for $292,285, net of cash acquired and inclusive of the impact of measurement period adjustments discussed below. In connection with this acquisition, the Company recorded goodwill of $164,870 non-deductible for income tax purposes. The Company also recorded intangible assets of $99,000 for customer intangibles, $21,800 for unpatented technology and $6,500 for trademarks. The fair value of customer intangibles at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. The fair value of assets acquired also includes trade receivables of $14,568. The gross amount is $14,912, of which $344 is expected to be uncollectible. The fair values of the assets acquired and liabilities assumed, and the related tax balances, are based on preliminary estimates and assumptions. These preliminary estimates and assumptions could change during the measurement period as the Company finalizes the valuations of the assets acquired and liabilities assumed, and the related tax balances. During the nine months ended September 30, 2022, the Company recorded measurement period adjustments primarily related to its preliminary estimates of deferred taxes and changes in net working capital. These adjustments are based on facts and circumstances that existed as of the acquisition date which resulted in a decrease in goodwill of $4,339.

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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 presents the updated preliminary allocation of purchase price to the assets acquired and liabilities assumed under the Acme Cryogenics acquisition, based on their estimated fair values at acquisition date:
Total
Current assets, net of cash acquired$28,332 
Property, plant and equipment8,640 
Goodwill164,870 
Intangible assets127,300 
Other assets and deferred charges5,057 
Current liabilities(7,286)
Non-current liabilities(34,628)
Net assets acquired$292,285 

The amounts assigned to goodwill and major intangible asset classifications were as follows:
Amount allocatedUseful life
(in years)
Goodwill - non-deductible$164,870 na
Customer intangibles99,000 15
Unpatented technologies21,800 12
Trademarks6,500 16
$292,170 


4. Inventories, net
 September 30, 2022December 31, 2021
Raw materials$781,168 $671,195 
Work in progress311,819 271,659 
Finished goods446,098 377,800 
Subtotal1,539,085 1,320,654 
Less reserves(131,288)(129,559)
Total$1,407,797 $1,191,095 

5. Property, Plant and Equipment, net
September 30, 2022December 31, 2021 June 30, 2023December 31, 2022
LandLand$60,706 $63,656 Land$65,982 $62,495 
Buildings and improvementsBuildings and improvements571,851 582,314 Buildings and improvements634,994 620,500 
Machinery, equipment and otherMachinery, equipment and other1,848,889 1,816,473 Machinery, equipment and other1,987,086 1,895,502 
Property, plant and equipment, grossProperty, plant and equipment, gross2,481,446 2,462,443 Property, plant and equipment, gross2,688,062 2,578,497 
Accumulated depreciationAccumulated depreciation(1,522,552)(1,505,133)Accumulated depreciation(1,671,856)(1,573,672)
Property, plant and equipment, netProperty, plant and equipment, net$958,894 $957,310 Property, plant and equipment, net$1,016,206 $1,004,825 

Depreciation expense totaled $36,889$39,840 and $36,913$36,573 for the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively. For the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, depreciation expense totaled $111,274$77,370 and $111,152,$74,385, respectively.

6. Credit Losses

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
2022202120232022
Beginning Balance, December 31 of the Prior Year$40,126 $40,474 
Balance at January 1Balance at January 1$39,399 $40,126 
Provision for expected credit losses, net of recoveriesProvision for expected credit losses, net of recoveries2,791 4,744 Provision for expected credit losses, net of recoveries433 (57)
Amounts written off charged against the allowanceAmounts written off charged against the allowance(3,320)(3,991)Amounts written off charged against the allowance(1,371)(1,041)
Other, including foreign currency translationOther, including foreign currency translation(3,202)371 Other, including foreign currency translation(9)(1,640)
Ending balance, September 30$36,395 $41,598 
Balance at June 30Balance at June 30$38,452 $37,388 

7. Goodwill and Other Intangible Assets

The changes in the carrying value of goodwill by reportable operating segments were as follows:
 Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesTotal
Balance at December 31, 2021$723,283 $1,427,691 $1,106,202 $792,839 $508,807 $4,558,822 
Acquisitions— — — 154,016 — 154,016 
Measurement period adjustments(286)44 (1,544)— — (1,786)
Foreign currency translation(21,852)(70,344)(56,274)(27,867)(2,382)(178,719)
Balance at September 30, 2022$701,145 $1,357,391 $1,048,384 $918,988 $506,425 $4,532,333 
 Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesTotal
Balance at January 1, 2023$712,542 $1,391,418 $1,078,259 $979,535 $507,740 $4,669,494 
Measurement period adjustments— — — (3,820)— (3,820)
Foreign currency translation4,442 15,966 9,184 2,913 425 32,930 
Balance at June 30, 2023$716,984 $1,407,384 $1,087,443 $978,628 $508,165 $4,698,604 

During the ninesix months ended SeptemberJune 30, 2022, the Company recognized additions of $154,016 to goodwill as a result of acquisitions as discussed in Note 3 — Acquisitions. During the nine months ended September 30, 2022,2023, the Company recorded measurement period adjustments that decreased goodwill by $1,786,$3,820, principally related to deferred taxes and working capital adjustments for 20212022 acquisitions within the ImagingPumps & Identification and Engineered Products segments.Process Solutions segment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The Company’s definite-lived and indefinite-lived intangible assets by major asset class were as follows:
September 30, 2022December 31, 2021
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Amortized intangible assets:
Customer intangibles$1,819,083 $947,490 $871,593 $1,829,492 $909,776 $919,716 
Trademarks257,029 125,754 131,275 263,367 116,633 146,734 
Patents215,500 141,621 73,879 205,910 140,327 65,583 
Unpatented technologies243,792 129,646 114,146 221,239 123,464 97,775 
Distributor relationships74,812 53,594 21,218 84,204 55,260 28,944 
Drawings and manuals24,447 24,447 — 27,792 27,303 489 
Other22,503 18,017 4,486 22,347 18,775 3,572 
Total2,657,166 1,440,569 1,216,597 2,654,351 1,391,538 1,262,813 
Unamortized intangible assets:
Trademarks96,404 — 96,404 96,709 — 96,709 
Total intangible assets, net(1)
$2,753,570 $1,440,569 $1,313,001 $2,751,060 $1,391,538 $1,359,522 
(1)The change in intangible assets, net for the nine months ended September 30, 2022 includes a decrease of $48.2 million due to foreign currency translation.
June 30, 2023December 31, 2022
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Amortized intangible assets:
Customer intangibles$1,897,641 $1,059,509 $838,132 $1,881,402 $996,947 $884,455 
Trademarks267,800 142,842 124,958 265,466 132,791 132,675 
Patents214,426 145,885 68,541 219,199 146,337 72,862 
Unpatented technologies263,228 148,466 114,762 257,428 137,750 119,678 
Distributor relationships81,672 60,976 20,696 79,622 57,299 22,323 
Other27,564 17,091 10,473 46,880 41,682 5,198 
Total2,752,331 1,574,769 1,177,562 2,749,997 1,512,806 1,237,191 
Unamortized intangible assets:
Trademarks96,617 — 96,617 96,544 — 96,544 
Total intangible assets, net$2,848,948 $1,574,769 $1,274,179 $2,846,541 $1,512,806 $1,333,735 

For the three months ended SeptemberJune 30, 20222023 and 2021,2022, amortization expense was $39,625$38,951 and $35,998,$38,718, respectively. For the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, amortization expense was $119,534$79,317 and $107,084,$79,909, respectively. Amortization expense is primarily comprised of acquisition-related intangible amortization.

During the ninesix months ended SeptemberJune 30, 2022,2023, the Company acquired certain intellectual property assets related to electric refuse collection vehicles for approximately $29,750, including contingent consideration of up to $20,000.through an immaterial asset acquisition. These assets were classified as unpatented technologies and included in the Engineered ProductsImaging & Identification segment.

8. Restructuring Activities

The Company's restructuring charges by segment were as follows:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Engineered ProductsEngineered Products$2,027 $870 $3,008 $9,200 Engineered Products$3,938 $524 $4,477 $981 
Clean Energy & FuelingClean Energy & Fueling3,063 1,620 4,682 3,084 Clean Energy & Fueling5,847 1,423 15,991 1,619 
Imaging & IdentificationImaging & Identification516 168 2,051 1,032 Imaging & Identification865 344 1,204 1,535 
Pumps & Process SolutionsPumps & Process Solutions552 639 2,713 1,526 Pumps & Process Solutions3,303 1,476 4,629 2,161 
Climate & Sustainability TechnologiesClimate & Sustainability Technologies(85)1,293 5,790 4,637 Climate & Sustainability Technologies1,205 159 1,447 5,875 
CorporateCorporate1,242 200 1,537 1,182 Corporate1,241 383 1,127 295 
TotalTotal$7,315 $4,790 $19,781 $20,661 Total$16,399 $4,309 $28,875 $12,466 
These amounts are classified in the Condensed Consolidated Statements of Earnings as follows:
These amounts are classified in the condensed consolidated statements of earnings as follows:These amounts are classified in the condensed consolidated statements of earnings as follows:
Cost of goods and servicesCost of goods and services$2,082 $2,194 $3,326 $10,940 Cost of goods and services$5,682 $1,037 $9,155 $1,244 
Selling, general and administrative expensesSelling, general and administrative expenses5,233 2,596 16,455 9,721 Selling, general and administrative expenses10,717 3,272 19,720 11,222 
TotalTotal$7,315 $4,790 $19,781 $20,661 Total$16,399 $4,309 $28,875 $12,466 

The restructuring expenses of $7,315 $16,399and $19,781$28,875 incurred during the three and ninesix months ended SeptemberJune 30, 20222023 were primarily related to headcount reductions and exit costs in the result ofClean Energy & Fueling, Engineered Products and Pumps & Process Solutions segments. These restructuring programsprograms were initiated in 20212022 and 20222023 and were undertaken in responselight of current market conditions. The Company will continue to make proactive adjustments to its cost structure through restructuring and other programs to align with current demand conditions and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization.trends.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The $7,315 of restructuring charges incurred during the third quarter of 2022 primarily included the following items:
The Engineered Products segment recorded $2,027 of restructuring charges related primarily to headcount reductions.

The Clean Energy & Fueling segment recorded $3,063 of restructuring charges related primarily to headcount reductions and exit costs undertaken in light of market conditions. The segment will continue to make proactive adjustments to its cost structure through restructuring and other programs to align with current demand trends.

The Imaging & Identification segment recorded $516 of restructuring charges related primarily to headcount reductions and exit costs.

The Pumps & Process Solutions segment recorded $552 of restructuring charges related primarily to headcount reductions.

The Climate & Sustainability Technologies segment recorded $(85) of net restructuring reserve adjustments.

Corporate recorded $1,242 of restructuring charges related primarily to exit costs and simplification of organizational structure.

The Company’s severance and exit accrual activities were as follows:
 SeveranceExitTotal
Balance at December 31, 2021$10,730 $3,067 $13,797 
Restructuring charges8,421 11,360 (1)19,781 
Payments(10,637)(4,253)(14,890)
Other, including foreign currency translation(862)(6,945)(1)(7,807)
Balance at September 30, 2022$7,652 $3,229 $10,881 
(1) Other activity includes non-cash foreign currency translation losses recorded as restructuring charges due to the substantial liquidation of businesses in certain Latin America countries.
 SeveranceExitTotal
Balance at January 1, 2023$12,007 $2,503 $14,510 
Restructuring charges22,204 6,671 28,875 
Payments(14,441)(4,747)(19,188)
Other, including foreign currency translation422 (740)(318)
Balance at June 30, 2023$20,192 $3,687 $23,879 

9. Borrowings

Borrowings consistedconsist of the following:
 June 30, 2023December 31, 2022
Short-term:
Commercial paper$445,500 $734,936 
Other675 836 
Short-term borrowings$446,175 $735,772 

 September 30, 2022December 31, 2021
Short-term:
Commercial paper$788,034 $105,000 
Other826 702 
Short-term borrowings$788,860 $105,702 
 
Carrying amount (1)
PrincipalSeptember 30, 2022December 31, 2021
Long-term
3.15% 10-year notes due November 15, 2025$400,000 $397,895 $397,389 
1.25% 10-year notes due November 9, 2026 (euro-denominated)600,000 577,288 674,217 
0.750% 8-year notes due November 4, 2027 (euro-denominated)500,000 480,484 561,293 
6.65% 30-year debentures due June 1, 2028$200,000 199,431 199,356 
2.950% 10-year notes due November 4, 2029$300,000 297,313 297,029 
5.375% 30-year debentures due October 15, 2035$300,000 296,746 296,559 
6.60% 30-year notes due March 15, 2038$250,000 248,251 248,166 
5.375% 30-year notes due March 1, 2041$350,000 344,913 344,705 
Other341 — 
Total long-term debt$2,842,662 $3,018,714 
During the six months ended June 30, 2023, commercial paper borrowings decreased $289,436. The borrowings outstanding under the commercial paper program had a weighted average annual interest rate of 5.33% and 4.61% as of June 30, 2023 and December 31, 2022, respectively.

 
Carrying amount (1)
PrincipalJune 30, 2023December 31, 2022
Long-term
3.15% 10-year notes due November 15, 2025$400,000 $398,400 $398,063 
1.25% 10-year notes due November 9, 2026 (euro-denominated)600,000 649,816 631,522 
0.750% 8-year notes due November 4, 2027 (euro-denominated)500,000 540,865 525,654 
6.65% 30-year debentures due June 1, 2028$200,000 199,506 199,456 
2.950% 10-year notes due November 4, 2029$300,000 297,597 297,408 
5.375% 30-year debentures due October 15, 2035$300,000 296,933 296,808 
6.60% 30-year notes due March 15, 2038$250,000 248,336 248,279 
5.375% 30-year notes due March 1, 2041$350,000 345,120 344,982 
Other— 341 
Total long-term debt$2,976,573 $2,942,513 
(1) Carrying amount is net of unamortized debt discount and deferred debt issuance costs. Total unamortized debt discounts were
$12.8 $11.9 million and $15.1$12.7 million as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively. Total deferred debt issuance costs were $11.2$9.8 million and $12.5$10.7 million as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)

During the nine months ended September 30, 2022, commercial paper borrowings increased $683,034. The borrowings outstanding under the commercial paper program had a weighted average annual interest rate of 3.34% and 0.38% as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022,On April 6, 2023, the Company maintainedentered into new $1.0 billion five-year and $500.0 million 364-day unsecured revolving credit facilities ("Credit Agreements") with a $1.0syndicate of banks. The new five-year credit facility replaced the previous $1 billion five-year unsecured revolving credit facility, (the "Credit Agreement") with a syndicate of banks which expireswas set to expire on October 4, 2024.2024 and was terminated by the Company upon execution of the new five-year credit facility. The lenders' commitments under the five-year and 364-day Credit Agreements will terminate and the loans under the Credit Agreements will mature on April 6, 2028 and April 4, 2024, respectively. The Company usesmay elect to extend the maturity date of any loans under the 364-day credit facility until April 4, 2025, subject to conditions specified therein. The Credit Agreement principallyAgreements are designated as a liquidity back-upback-stop for itsthe Company's commercial paper program, which was upsized from $1.0 billion to $1.5 billion during the quarter, and also are available for general corporate purposes. At the Company's election, loans under the Credit AgreementAgreements will bear interest at a base rate plus an applicable margin. The Credit Agreement requiresAgreements require the Company to pay a facility feefees and imposesimpose various restrictions on the Company such as, among other things, a requirement to maintain a minimum interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1. As of SeptemberJune 30, 20222023 and December 31, 2021,2022, there were no outstanding borrowings under the new Credit Agreement.Agreements or the previous five-year credit facility.

The Company was in compliance with all covenants in the Credit AgreementAgreements and other long-term debt covenants at SeptemberJune 30, 20222023 and had an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of 17.513.7 to 1.

Letters of Credit and other Guarantees

As of SeptemberJune 30, 2022,2023, the Company had approximately $168$183.9 million outstanding in letters of credit, surety bonds, and performance and other guarantees which primarily expire on various dates through 2039.2029. 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.obligations, the probability of which is believed to be remote.

10. Financial Instruments

Derivatives

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations and certain commodity risks. In order to manage these risks, the Company has hedged portions of its forecasted sales and purchases which occur within the next twelve months that are denominated in non-functional currencies, with currency forward contracts designated as cash flow hedges. At SeptemberJune 30, 20222023 and December 31, 2021,2022, the Company had contracts with total notional amounts of $163,384$180,999 and $180,929,$184,565, respectively, to exchange currencies, principally euro, pound sterling, Swedish krona, Canadian dollar, Chinese yuan, and Swiss franc. The Company believes it is probable that all forecasted cash flow transactions will occur.

In addition, the Company had outstanding contracts with a total notional amount of $112,646$106,341 and $108,736$102,509 as of SeptemberJune 30, 20222023 and December 31, 2021,2022, respectively, that are not designated as hedging instruments. These instruments are used to reduce the Company's exposure for operating receivables and payables that are denominated in non-functional currencies. Gains and losses on these contracts are recorded in other income, net in the Condensed Consolidated Statementscondensed consolidated statements of Earnings.earnings.

The following table sets forth the fair values of derivative instruments held by the Company as of SeptemberJune 30, 20222023 and December 31, 20212022 and the balance sheet lines in which they are recorded:
Fair Value Asset (Liability)Fair Value Asset (Liability)
September 30, 2022December 31, 2021Balance Sheet CaptionJune 30, 2023December 31, 2022Balance Sheet Caption
Foreign currency forwardForeign currency forward$3,866 $2,825 Prepaid and other current assetsForeign currency forward$2,255 $944 Prepaid and other current assets
Foreign currency forwardForeign currency forward(5,377)(433)Other accrued expensesForeign currency forward(2,249)(2,760)Other accrued expenses

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
For a cash flow hedge, the change in estimated fair value of a hedging instrument is recorded in accumulated other comprehensive earnings (loss) earnings as a separate component of the Condensed Consolidated Statementscondensed consolidated statements of Stockholders' Equitystockholders' equity and is reclassified into revenues, cost of goods and services, or selling, general and administrative expenses in the Condensed Consolidated Statementscondensed consolidated statements of Earningsearnings during the period in which the hedged transaction is settled. The amount of gains or losses from hedging activity recorded in earnings is not significant, and the amount of unrealized gains and losses from cash flow hedges that are expected to be reclassified to earnings in the next twelve months is not significant; therefore, additional tabular disclosures are not presented. There are no amounts excluded from the assessment of hedge effectiveness, and the Company's derivative instruments that are subject to credit risk contingent features were not significant.

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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 €500,000€600,000 and €600,000€500,000 of euro-denominated notes issued November 4, 20199, 2016 and November 9, 2016,4, 2019, respectively, as hedges of a portion of its net investment in euro-denominated operations. Changes in the value of the euro-denominated debt are recognized in foreign currency translation adjustments within other comprehensive earnings (loss) of the Condensed Consolidated Statementscondensed consolidated statements of Comprehensive Earningscomprehensive earnings to offset changes in the value of the net investment in euro-denominated operations. Changes in the value of the euro-denominated debt resulting from exchange rate differences are offset by changes in the net investment due to the high degree of effectiveness between the hedging instruments and the exposure being hedged.

Amounts recognized in other comprehensive earnings for the gains (losses) on net investment hedges were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Gain on euro-denominated debt$94,731 $24,032 $179,221 $51,571 
Tax expense(21,020)(5,446)(39,990)(11,669)
Net gain on net investment hedges, net of tax$73,711 $18,586 $139,231 $39,902 
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
(Loss) gain on euro-denominated debt$(14,264)$46,742 $(32,511)$84,490 
Tax benefit (expense)3,166 (10,539)7,216 (18,970)
Net (loss) gain on net investment hedges, net of tax$(11,098)$36,203 $(25,295)$65,520 

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.value as follows:

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

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

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

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of SeptemberJune 30, 20222023 and December 31, 2021:2022:
September 30, 2022December 31, 2021June 30, 2023December 31, 2022
Level 2Level 2Level 2Level 2
Assets:Assets:Assets:
Foreign currency cash flow hedgesForeign currency cash flow hedges$3,866 $2,825 Foreign currency cash flow hedges$2,255 $944 
Liabilities:Liabilities:Liabilities:
Foreign currency cash flow hedgesForeign currency cash flow hedges5,377 433 Foreign currency cash flow hedges2,249 2,760 

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The derivative contracts are measured at fair value using models based on observable market inputs such as foreign currency exchange rates and interest rates; therefore, they are classified within Level 2 of the fair value hierarchy.

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

The estimated fair value of long-term debt at SeptemberJune 30, 20222023 and December 31, 20212022, was $2,658,903$2,844,825 and $3,440,501,$2,786,862, respectively. The estimated fair value of long-term debt is based on quoted market prices for similar instruments and is, therefore, classified as Level 2 within the fair value hierarchy.

The carrying values of cash and cash equivalents, trade receivables, accounts payable and short-term borrowings are reasonable estimates ofapproximate their fair values as of SeptemberJune 30, 20222023 and December 31, 20212022 due to the short-term nature of these instruments.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
11. Income Taxes

The effective tax rates for the three months ended SeptemberJune 30, 2023 and 2022 were 19.3%and 2021 were 19.0% and 19.5%13.6%, respectively.respectively. The decreaseincrease in the effective tax rate for the three months ended SeptemberJune 30, 20222023 relative to the prior year comparable period was primarily driven by favorable audit resolutions in 2022, including $22,579 related to the Tax Cuts and recording of previously unrecognized tax attributes.Jobs Act.

The effective tax rates for the ninesix months ended SeptemberJune 30, 2023 and 2022 were 19.7% and 2021 were 16.8% and 19.0%15.6%, respectively. The decreaseincrease in the effective tax rate for the ninesix months ended SeptemberJune 30, 20222023 relative to the prior year comparable period was primarily driven by favorable audit resolutions as well as $22.6 millionin 2022, including $22,579 related to the Tax Cuts and Jobs Act.

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 $4.8 million.$5,548.

12. Equity Incentive Program

The Company typically makes its annual grants of equity awards pursuant to actions taken by the Compensation Committee of the Board of Directors at its regularly scheduled first quarter meeting. During the ninesix months ended SeptemberJune 30, 2022,2023, the Company issued stock-settled appreciation rights ("SARs") covering 335,285359,715 shares, performance share awards ("PSAs") of 40,08743,656 and restricted stock units ("RSUs") of 79,556.82,055. During the six months ended June 30, 2022, the Company issued SARs covering 335,285 shares, PSAs of 40,087 and RSUs of 76,509.

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 SARsawards is based on the U.S. Treasury yield curve in effect at the time of grant.

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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:
SARsSARs
20222021 20232022
Risk-free interest rateRisk-free interest rate1.86 %0.59 %Risk-free interest rate3.91 %1.86 %
Dividend yieldDividend yield1.25 %1.62 %Dividend yield1.32 %1.25 %
Expected life (years)Expected life (years)5.45.5Expected life (years)5.45.4
VolatilityVolatility29.46 %30.49 %Volatility30.65 %29.46 %
Grant priceGrant price$160.21$122.73Grant price$153.25$160.21
Fair value per share at date of grantFair value per share at date of grant$42.07$29.08Fair value per share at date of grant$47.27$42.07

The performance share awardsPSAs granted in 20222023 and 20212022 are market condition awards as attainment is based on Dover's performance relative to its peer group (companies listed under the S&P 500 Industrials sector) for the relevant performance period. The performance period and vesting period for these awards is three years. These awards were valued on the date of grant using the Monte Carlo simulation model (a binomial lattice-based valuation model) and are generally recognized ratably over the vesting period, and the fair value is not subject to change based on future market conditions. The assumptions used in determining the fair value of the performance sharesPSAs granted in the respective periods were as follows:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Performance SharesPSAs
2022202120232022
Risk-free interest rateRisk-free interest rate1.68 %0.19 %Risk-free interest rate4.28 %1.68 %
Dividend yieldDividend yield1.25 %1.62 %Dividend yield1.32 %1.25 %
Expected life (years)Expected life (years)2.92.9Expected life (years)2.92.9
VolatilityVolatility31.10 %31.90 %Volatility27.30 %31.10 %
Grant priceGrant price$160.21$122.73Grant price$153.25$160.21
Fair value per share at date of grantFair value per share at date of grant$196.40$148.29Fair value per share at date of grant$249.48$196.40

The Company also has granted RSUs, and the fair value of these awards was determined using Dover's closing stock price on the date of grant, which was $160.21$153.25 and $122.73$160.21 for RSUs granted in 20222023 and 2021,2022, respectively.

Stock-based compensation is reported within selling, general and administrative expenses in the Condensed Consolidated Statementscondensed consolidated statements of Earnings.earnings. The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Pre-tax stock-based compensation expensePre-tax stock-based compensation expense$6,326 $6,660 $24,657 $25,053 Pre-tax stock-based compensation expense$6,441 $7,218 $18,723 $18,331 
Tax benefitTax benefit(591)(576)(2,437)(2,357)Tax benefit(587)(731)(1,951)(1,846)
Total stock-based compensation expense, net of taxTotal stock-based compensation expense, net of tax$5,735 $6,084 $22,220 $22,696 Total stock-based compensation expense, net of tax$5,854 $6,487 $16,772 $16,485 

13. Commitments and Contingent Liabilities

Litigation

CertainA few of the Company’s subsidiaries are involved in legal proceedings relating to the cleanup of waste disposal sites identified under federal and state statutes thatwhich 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 smallrelatively insignificant in relation to the total projected expenditures and the number of other "potentially responsible parties" involved and is anticipated to be immaterial to the Company. In addition, certaina few of the Company’s subsidiaries are involved in ongoing remedial activities at certain current and former plant sites, in cooperation with regulatory agencies, and appropriate estimated liabilities have been established. At SeptemberJune 30, 20222023 and December 31, 2021,2022, these estimated liabilities for environmental and other matters, including private party claims for exposure to hazardous substances that are probable and estimable, were not material.significant.

The Company and certainsome 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
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and currently accrued to-date and consider the availability and extent of insurance coverage. The Company has estimated liabilities for these other legal matters that are probable and estimable, and at SeptemberJune 30, 20222023 and December 31, 2021,2022, these estimated liabilities were not material.immaterial. While it is not possible at this time to predict the outcome of these legal actions, in the opinion of management, based on the aforementioned reviews, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, could have a material effect on its financial position, results of operations, or cash flows.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
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.condensed consolidated balance sheet. The changes in the carrying amount of product warranties through SeptemberJune 30, 20222023 and 2021,2022, were as follows:
 20222021
Beginning Balance, December 31 of the Prior Year$48,568 $51,088 
Provision for warranties46,096 53,747 
Settlements made(46,135)(50,350)
Other adjustments, including acquisitions and currency translation(2,233)(1,301)
Ending balance, September 30$46,296 $53,184 

14. Employee Benefit Plans

Retirement Plans

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

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

Qualified Defined Benefits
 Three Months Ended September 30,Nine Months Ended September 30,
 U.S. PlanNon-U.S. PlansU.S. PlanNon-U.S. Plans
 20222021202220212022202120222021
Service cost$1,426 $1,784 $1,139 $1,398 $4,278 $5,351 $3,533 $4,238 
Interest cost3,436 3,401 799 674 10,309 10,204 2,529 2,036 
Expected return on plan assets(7,276)(7,245)(1,748)(1,793)(21,828)(21,735)(5,454)(5,412)
Amortization:
Prior service cost (credit)27 53 (131)(163)82 159 (395)(494)
Recognized actuarial loss575 2,503 411 979 1,725 7,509 1,305 2,968 
Net periodic (income) expense$(1,812)$496 $470 $1,095 $(5,434)$1,488 $1,518 $3,336 

Non-Qualified Supplemental Benefits
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Service cost$356 $390 $1,069 $1,171 
Interest cost304 308 912 924 
Amortization:
   Prior service cost372 383 1,117 1,148 
   Recognized actuarial gain(504)(418)(1,512)(1,254)
Net periodic expense$528 $663 $1,586 $1,989 


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
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 $14,044 and $15,001 for the three months ended September 30, 2022 and 2021, respectively, and $46,301 and $46,114 for the nine months ended September 30, 2022 and 2021, respectively.
 20232022
Balance at January 1$48,449 $48,568 
Provision for warranties32,483 31,112 
Settlements made(30,812)(30,955)
Other adjustments, including acquisitions and currency translation438 (721)
Balance at June 30$50,558 $48,004 

15.14. Other Comprehensive Earnings

Amounts reclassified from accumulated other comprehensive lossearnings (loss) to earnings during the three and ninesix months ended SeptemberJune 30, 20222023 and 20212022 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
20222021202220212023202220232022
Foreign currency translation:Foreign currency translation:Foreign currency translation:
Reclassification of foreign currency translation losses to earnings for the substantial liquidation of businessesReclassification of foreign currency translation losses to earnings for the substantial liquidation of businesses$— $— $5,915 $— Reclassification of foreign currency translation losses to earnings for the substantial liquidation of businesses$— $— $— $5,915 
Tax benefitTax benefit— — —  Tax benefit— — —  
Net of taxNet of tax$— $— $5,915 $— Net of tax$— $— $— $5,915 
Pension plans:Pension plans:Pension plans:
Amortization of actuarial losses$474 $3,064 $1,494 $9,223 
Amortization of actuarial (gain) lossAmortization of actuarial (gain) loss$(639)$499 $(1,280)$1,020 
Amortization of prior service costsAmortization of prior service costs271 274 813 823 Amortization of prior service costs283 274 572 542 
Total before taxTotal before tax745 3,338 2,307 10,046 Total before tax(356)773 (708)1,562 
Tax benefit(195)(771)(605)(2,320)
Tax provision (benefit)Tax provision (benefit)83 (202)165 (410)
Net of taxNet of tax$550 $2,567 $1,702 $7,726 Net of tax$(273)$571 $(543)$1,152 
Cash flow hedges:Cash flow hedges:Cash flow hedges:
Net gains reclassified into earnings$(1,661)$(267)$(5,035)$(3,977)
Tax provision371 61 1,124 900 
Net loss (gain) reclassified into earningsNet loss (gain) reclassified into earnings$1,045 $(1,345)$2,118 $(3,374)
Tax (benefit) provisionTax (benefit) provision(193)300 (420)753 
Net of taxNet of tax$(1,290)$(206)$(3,911)$(3,077)Net of tax$852 $(1,045)$1,698 $(2,621)

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

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

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

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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
15. Segment Information

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

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

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Imaging & Identification segment supplies precision marking and coding, packaging intelligence, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical, industrial manufacturing, fashion and appareltextile and other end-markets.

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

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

The Company's Chief Operating Decision Maker ("CODM")Management uses segment earnings to evaluate segment performance and allocate resources. Segment earnings is defined as earnings before purchase accounting expenses, restructuring and other costs (benefits), loss (gain) on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes.

During the nine month period ended September 30, 2022, the segment measure of profit and loss used by the CODM was changed to segment earnings from segment earnings (EBIT), defined as earnings before corporate expenses/other, interest expense, interest income and provision for income taxes. This change in segment measure allows the CODM to better assess operating results over time and is consistent with how the CODM evaluates our businesses. Accordingly, we have updated our segment earnings for the three and nine months ended September 30, 2021 to conform to the new presentation.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
Segment financial information and a reconciliation of segment results to consolidated results were as follows:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Revenue:Revenue:  Revenue:  
Engineered ProductsEngineered Products$516,501 $447,798 $1,518,584 $1,318,016 Engineered Products$473,687 $514,436 $971,236 $1,002,083 
Clean Energy & FuelingClean Energy & Fueling464,022 410,561 1,416,492 1,237,281 Clean Energy & Fueling441,166 494,075 871,895 952,470 
Imaging & IdentificationImaging & Identification282,371 292,535 830,577 870,939 Imaging & Identification271,932 275,951 555,023 548,206 
Pumps & Process SolutionsPumps & Process Solutions433,558 438,240 1,309,880 1,261,318 Pumps & Process Solutions465,626 441,127 879,507 876,322 
Climate & Sustainability TechnologiesClimate & Sustainability Technologies462,671 429,425 1,295,913 1,232,008 Climate & Sustainability Technologies449,001 434,164 904,326 833,242 
Intersegment eliminationsIntersegment eliminations(832)(290)(2,539)(1,716)Intersegment eliminations(1,326)(1,038)(2,878)(1,707)
Total consolidated revenueTotal consolidated revenue$2,158,291 $2,018,269 $6,368,907 $5,917,846 Total consolidated revenue$2,100,086 $2,158,715 $4,179,109 $4,210,616 
Net earnings:Net earnings: Net earnings: 
Segment earnings:Segment earnings:  Segment earnings:  
Engineered ProductsEngineered Products$90,145 $67,376 $242,946 $215,315 Engineered Products$73,076 $81,671 $157,351 $152,801 
Clean Energy & FuelingClean Energy & Fueling90,208 80,101 262,204 253,103 Clean Energy & Fueling83,616 99,034 157,221 171,996 
Imaging & IdentificationImaging & Identification74,477 70,635 194,467 200,818 Imaging & Identification61,336 61,392 129,651 119,990 
Pumps & Process SolutionsPumps & Process Solutions128,573 150,275 413,238 425,929 Pumps & Process Solutions129,337 138,048 244,581 284,665 
Climate & Sustainability TechnologiesClimate & Sustainability Technologies75,190 49,734 192,980 150,114 Climate & Sustainability Technologies76,074 64,181 149,852 117,790 
Total segment earningsTotal segment earnings458,593 418,121 1,305,835 1,245,279 Total segment earnings423,439 444,326 838,656 847,242 
Purchase accounting expenses (1)
Purchase accounting expenses (1)
40,526 35,587 140,831 106,265 
Purchase accounting expenses (1)
40,200 47,019 82,879 100,305 
Restructuring and other costs (benefits) (2)
8,613 (3,201)27,109 11,740 
Restructuring and other costs (2)
Restructuring and other costs (2)
18,143 7,944 32,196 18,496 
Loss on dispositions (3)
Loss on dispositions (3)
— — 194 — 
Loss on dispositions (3)
— — — 194 
Corporate expense / other (4)
Corporate expense / other (4)
27,876 33,249 93,247 110,332 
Corporate expense / other (4)
33,922 27,967 73,994 65,371 
Interest expenseInterest expense29,789 26,433 83,330 79,917 Interest expense33,804 26,989 68,018 53,541 
Interest incomeInterest income(1,244)(1,466)(2,968)(3,088)Interest income(2,653)(949)(4,744)(1,724)
Earnings before provision for income taxesEarnings before provision for income taxes353,033 327,519 964,092 940,113 Earnings before provision for income taxes300,023 335,356 586,313 611,059 
Provision for income taxesProvision for income taxes67,007 63,763 162,295 179,080 Provision for income taxes57,784 45,738 115,500 95,288 
Net earningsNet earnings$286,026 $263,756 $801,797 $761,033 Net earnings$242,239 $289,618 $470,813 $515,771 
(1) Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.
(2) Restructuring and other costs relate to actions taken for employeeheadcount reductions, facility consolidations and site closures, product line exits, and other asset charges. Restructuring and other costs consist of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Restructuring$7,315 $4,790 $19,781 $20,661 
Other costs (benefits), net1,298 (7,991)7,328 (8,921)
Restructuring and other costs (benefits)$8,613 $(3,201)$27,109 $11,740 
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Restructuring$16,399 $4,309 $28,875 $12,466 
Other costs, net1,744 3,635 3,321 6,030 
Restructuring and other costs$18,143 $7,944 $32,196 $18,496 
(3) Loss on dispositions includes working capital adjustments related to dispositions.
(4) Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services and digital overhead costs, deal-relateddeal related expenses and various administrative expenses relating to the corporate headquarters.


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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The following table presents revenue disaggregated by geography based on the location of the Company's customers:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
Revenue by geographyRevenue by geography2022202120222021Revenue by geography2023202220232022
United StatesUnited States$1,252,369 $1,108,513 $3,656,930 $3,235,542 United States$1,161,982 $1,253,061 $2,333,346 $2,404,561 
EuropeEurope426,007 452,066 1,331,835 1,356,435 Europe446,307 458,263 879,148 905,828 
AsiaAsia246,750 222,366 705,252 650,481 Asia230,805 229,116 445,655 458,502 
Other AmericasOther Americas166,045 166,230 467,365 468,298 Other Americas168,573 149,728 340,758 301,320 
OtherOther67,120 69,094 207,525 207,090 Other92,419 68,547 180,202 140,405 
TotalTotal$2,158,291 $2,018,269 $6,368,907 $5,917,846 Total$2,100,086 $2,158,715 $4,179,109 $4,210,616 

17.
16. Share Repurchases

In November 2020, theThe 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.

On August 31, 2022, the Company entered into a $500,000 accelerated share repurchase agreement (the “ASR Agreement”) with Bank of America N.A. (“Bank of America”) to repurchase its shares in an accelerated share repurchase program (the “ASR Program”). The ASR Program is classified as equity, initially recorded at fair value with no subsequent remeasurement. The Company conducted the ASR Program under the November 2020 share repurchase authorization. The Company funded the ASR Program with proceeds from commercial paper.

Under the terms of the ASR Agreement, the Company paid Bank of America $500,000 on September 1, 2022 and on that date received initial deliveries of 3,201,025 shares, representing a substantial majority of the shares expected to be retired over the course of the ASR Agreement. The total number of shares ultimately repurchased under the ASR Agreement will be based on the daily volume-weighted average share price of Dover's common stock during the calculation period of the ASR Program, less a discount. The ASR Program is scheduled to be completed in the fourth quarter of 2022, subject to postponement or acceleration under the terms of the ASR Agreement. The impact of these shares that will be received at the completion of the ASR Program is anti-dilutive and therefore excluded from the calculation of diluted earnings per share. The actual number of shares repurchased will be determined at the completion of the ASR Program.

Under the November 2020 share repurchase authorization, exclusive of the ASR Program, inIn the three and six months ended SeptemberJune 30, 2022 and 2021,2023, there were no share repurchases. In the ninethree and six months ended SeptemberJune 30, 2022, the Company repurchased 641,428 shares of common stock at a total cost of $85,000, or $132.52 per share. In the nine months ended September 30, 2021, the Company repurchased 182,951 shares of common stock at a total cost of $21,637, or $118.27 per share.
share
. As of SeptemberJune 30, 2022, 15,974,5962023, 15,283,326 shares remain authorized for repurchase under the November 2020current share repurchase authorization.
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DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
18.17. 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 September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Net earningsNet earnings$286,026 $263,756 $801,797 $761,033 Net earnings$242,239 $289,618 $470,813 $515,771 
Basic earnings per common share:Basic earnings per common share:  Basic earnings per common share:  
Net earningsNet earnings$2.01 $1.83 $5.59 $5.29 Net earnings$1.73 $2.01 $3.37 $3.58 
Weighted average shares outstandingWeighted average shares outstanding142,506,000 143,976,000 143,469,000 143,895,000 Weighted average shares outstanding139,862,000 143,832,000 139,810,000 143,959,000 
Diluted earnings per common share:Diluted earnings per common share:  Diluted earnings per common share:  
Net earningsNet earnings$2.00 $1.81 $5.55 $5.24 Net earnings$1.72 $2.00 $3.35 $3.56 
Weighted average shares outstandingWeighted average shares outstanding143,257,000 145,440,000 144,413,000 145,220,000 Weighted average shares outstanding140,578,000 144,669,000 140,597,000 144,998,000 

The following table is a reconciliation of the share amounts used in computing earnings per share:
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021 2023202220232022
Weighted average shares outstanding - BasicWeighted average shares outstanding - Basic142,506,000 143,976,000 143,469,000 143,895,000 Weighted average shares outstanding - Basic139,862,000 143,832,000 139,810,000 143,959,000 
Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUsDilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs751,000 1,464,000 944,000 1,325,000 Dilutive effect of assumed exercise of SARs and vesting of performance shares and RSUs716,000 837,000 787,000 1,039,000 
Weighted average shares outstanding - DilutedWeighted average shares outstanding - Diluted143,257,000 145,440,000 144,413,000 145,220,000 Weighted average shares outstanding - Diluted140,578,000 144,669,000 140,597,000 144,998,000 

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

The weighted average number of anti-dilutive potential common shares excluded from the calculation above were approximately 19,00034,000 and 1,0006,000 for the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively, and 28,00061,000 and 57,00032,000 for the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
18. Recent Accounting Pronouncements

Recently Adopted Accounting Standard

In October 2021, the FASB issued ASU 2021-08 Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. The Company early adopted the guidance during the first quarter of 2022. Prior to adoption, the acquirer recognized such contract assets and contract liabilities at fair value on the acquisition date. The adoption did not have a material impact on the Company's Condensed Consolidated Financial Statements.

Recently Issued Accounting Standard

In September 2022, the FASB issued ASU No. 2022-04 Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations. The amendments in this update require a buyer in a supplier finance program to disclose information about the program's nature, activity during the period, changes from period to period, and potential magnitude. The Company adopted the guidance will becomewhen it became effective on January 1, 2023, except for the rollforward requirement, which becomes effective January 1, 2023 and early2024. The adoption is permitted. Management is evaluating the timing anddid not have a material impact of adopting this ASU on the Company's Condensed Consolidated Financial Statements.condensed consolidated financial statements.

The Company facilitates the opportunity for suppliers to participate in a voluntary supply chain financing ("SCF") program with a third-party financial institution. Participating suppliers are paid directly by the SCF financial institution and, in addition, may elect to sell receivables due from the Company to the SCF financial institution for early payment. Thus, participating suppliers have additional potential flexibility in managing their liquidity by accelerating, at their option and cost, collection of receivables due from the Company.

The Company and its suppliers agree on commercial terms, including payment terms, for the goods and services the Company procures, regardless of whether the supplier participates in SCF. For participating suppliers, the Company’s responsibility is limited to making all payments to the SCF financial institution on the terms originally negotiated with the supplier, irrespective of whether the supplier elects to sell receivables to the SCF financial institution. The Company does not determine the terms or conditions of the arrangement between the SCF financial institution and the Company's suppliers. The SCF financial institution pays the supplier on the invoice due date for any invoices that were not previously sold by the supplier. The agreement between the Company and the SCF financial institution does not require the Company to provide assets pledged as security or other forms of guarantees.

Outstanding payments related to the SCF program are recorded within accounts payable in our condensed consolidated balance sheets. As of June 30, 2023 and December 31, 2022, amounts due to the SCF financial institution were approximately $200,112 and $194,362, respectively.

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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"). Please see "Non-GAAP Disclosures" at the end of this Item 2 for further detail on these financial measures. We believe these measures provide investors with important information that is useful in understanding our business results and trends. ExplanationsReconciliations within this MD&A provide more details on the use and derivation of these measures.

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, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions, and Climate & Sustainability Technologies. 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 provides a wide range of equipment, components, software, solutions and services forto the vehicle aftermarket, waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-markets.

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

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

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

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

In the thirdsecond quarter of 2022,2023, revenue was $2.2$2.1 billion, which increased $140.0decreased $58.6 million, or 6.9%2.7%, as compared to the thirdsecond quarter of 2021.2022. This was driven by organic revenue growthdecline of 9.0%3.0% and acquisition-related revenue growth of 4.4%, partially offset by an unfavorable impact from foreign currency translation of 4.8% and disposition-related decline0.6% partially offset by acquisition-related revenue growth of 1.7%0.9%. Pricing initiatives continued in the quarter to offset the impact of higher commodity costs, component parts inflation and higher energy, freight and logistics costs.

The 9.0%3.0% organic revenue growthdecline for the thirdsecond quarter of 20222023 was broad-based across most of our businesses based on solid underlying demand and our ability to produce and ship despite supply chain constraints and input cost inflation. The Engineered Products segment had organic revenue growth of 17.6% primarily as a result of pricing initiatives as well as strength in our waste handling, vehicle service, industrial automation, aerospace and defense, and industrial winch and hoist businesses. Thedriven by Clean Energy & Fueling segmentand Engineered Products segments which had organic revenuea decline of 0.5% principally due to reduced demand in above ground retail fueling equipment, mostly9.3% and 7.7%, respectively. The decline was partially offset by solid demand in below ground retail fueling, fluid transfer solutionsClimate & Sustainability Technologies, Pumps & Process Solutions, and vehicle washImaging & Identification segments which had growth of 4.0%, 0.9%, and 0.3%, respectively. For further information, see "Segment Results of Operations" within this Item 2.
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solutions businesses, along with pricing initiatives. The Imaging & Identification segment experienced organic revenue growth of 4.9% driven by solid activity in our marking and coding business, as underlying demand for our printers, spare parts, services and consumables remains positive, and by improvements in component availability. The Pumps & Process Solutions segment had organic revenue growth of 1.9%, driven by pricing initiatives, along with continued strength in our core non-COVID-19 biopharma platform, industrial pumps, plastics and polymer processing solutions, and bearings and compression components businesses, partially offset by lower shipments for single-use pumps and connectors used in biopharmaceutical production processes for the COVID-19 vaccine. The Climate & Sustainability Technologies segment posted organic revenue growth of 19.3%, reflective of pricing initiatives combined with strong demand in retail refrigeration, can-making, and heat exchangers.

From a geographic perspective, organic revenue for the U.S., our largest market, increased 11.2%decreased 8.6% in the thirdsecond quarter of 2022.2023, driven by lower expected retail fueling revenue and by transient manufacturing and shipment disruptions in our vehicle services group plant in North America caused by an ERP system upgrade. Organic revenue in Asia and Europe grew 13.0% and 8.7%, respectively. Organic revenue in China, which represents approximately half of our business in Asia, grew 8% in the quarter as our businesses recovered from easing of COVID restrictions from the previous quarter.for Other Americas declined by 5.6% organically in the quarter.and Asia increased 13.9% and 1.9%, respectively, while Europe decreased 0.9%.

BookingsBookings were $2.1$1.9 billion for the three months ended SeptemberJune 30, 2022,2023, a decrease of $230.8$177.6 million, or 10.1%8.4% compared to the prior year comparable quarter. Included in this result waswas organic decline of 8.2%,8.3% and an unfavorable impact from foreign currency translation of 3.8%, disposition-related decline of 1.7%0.8%, partially offset by acquisition-related growth of 3.6%0.7%. The organic bookings decline was driven primarily by a decrease in orders in our Clean Energy & Fueling, Pump & Process Solutions and Climate & Sustainability Technologies segments, partially offset by organic growth in our Engineered Products and Imaging & Identification segments.lead time normalization across the portfolio as supply chains improve.

Backlog as of SeptemberJune 30, 20222023 was $3.2$2.8 billion, an increasea decrease from $2.8$3.3 billion in the prior year.year, but remains elevated on a relative historical basis. See definition of bookings and backlog within "Segment Results of Operations".Operations."

During the three months ended September 30, 2022, we acquired 99.7% of the equity interests in Malema Engineering Corporation and its related foreign entities ("Malema"), a designer and manufacturer of flow measurement and control instruments serving customers in the biopharmaceutical, semiconductor and industrial sectors, for $220.8 million, net of cash acquired, subject to contingent consideration. Subsequent to September 30, 2022, the Company acquired the remaining 0.3% of equity interests in Malema. The Malema acquisition expands the Company's biopharma single-use production offering within the Pumps & Process Solutions segment.

Restructuring and other costs of $8.6for the three months ended June 30, 2023 were $18.1 million which included restructuring charges of $7.3$16.4 million and other costs of $1.3 million for the three months ended September 30, 2022.$1.7 million. Restructuring and other costs were primarily duerelated to headcount reductions and facility consolidations resulting from restructuringexit costs in the Clean Energy & Fueling, Engineered Products and Pumps & Process Solutions segments. These programs were initiated in 20212022 and 2022.2023 and were undertaken in light of current market conditions. See Note 8 — Restructuring Activities in the Condensed Consolidated Financial Statementscondensed consolidated financial statements in Item 1 of this Form 10-Q for further details.

COVID-19 Update
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The COVID-19 outbreak and associated counteracting measures implemented by governments and businesses around the world, as well as subsequent accelerated recovery in global business activity, have increased uncertainty in the global business environment and led to supply chain disruptions and shortages in global markets for commodities, logistics and labor, as well as input cost inflation. Currently our expectation is that the impact of cost inflation, including labor, energy, freight and logistics costs, as well as supplier component input availability will continue throughout 2022.

The public health situation, continued global response measures and corresponding impacts on various markets remain fluid and uncertain and may lead to sudden changes in trajectory and outlook. We will continue to proactively respond to the situation and may take further actions that alter our business activity as may be required by governmental authorities, or that we determine are in the best interests of our employees and operations.





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CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands, except per share data)20222021% Change20222021% Change
(dollars in thousands, except per share figures)(dollars in thousands, except per share figures)20232022% / Point Change20232022% / Point Change
RevenueRevenue$2,158,291 $2,018,269 6.9 %$6,368,907 $5,917,846 7.6 %Revenue$2,100,086 $2,158,715 (2.7)%$4,179,109 $4,210,616 (0.7)%
Cost of goods and servicesCost of goods and services1,385,541 1,263,690 9.6 %4,071,680 3,669,547 11.0 %Cost of goods and services1,341,250 1,377,432 (2.6)%2,673,254 2,686,139 (0.5)%
Gross profitGross profit772,750 754,579 2.4 %2,297,227 2,248,299 2.2 %Gross profit758,836 781,283 (2.9)%1,505,855 1,524,477 (1.2)%
Gross profit marginGross profit margin35.8 %37.4 %(1.6)36.1 %38.0 %(1.9)Gross profit margin36.1 %36.2 %(0.1)36.0 %36.2 %(0.2)
Selling, general and administrative expensesSelling, general and administrative expenses402,339 412,553 (2.5)%1,270,615 1,249,593 1.7 %Selling, general and administrative expenses434,340 424,433 2.3 %866,754 868,276 (0.2)%
Selling, general and administrative expenses as a percent of revenueSelling, general and administrative expenses as a percent of revenue18.6 %20.4 %(1.8)20.0 %21.1 %(1.1)Selling, general and administrative expenses as a percent of revenue20.7 %19.7 %1.0 20.7 %20.6 %0.1 
Operating earningsOperating earnings370,411 342,026 8.3 %1,026,612 998,706 2.8 %Operating earnings324,496 356,850 (9.1)%639,101 656,201 (2.6)%
Interest expenseInterest expense29,789 26,433 12.7 %83,330 79,917 4.3 %Interest expense33,804 26,989 25.3 %68,018 53,541 27.0 %
Interest incomeInterest income(1,244)(1,466)(15.1)%(2,968)(3,088)(3.9)%Interest income(2,653)(949)179.6 %(4,744)(1,724)175.2 %
Other income, netOther income, net(11,167)(10,460)nm*(17,842)(18,236)nm*Other income, net(6,678)(4,546)nm*(10,486)(6,675)nm*
Earnings before provision for income taxesEarnings before provision for income taxes353,033 327,519 7.8 %964,092 940,113 2.6 %Earnings before provision for income taxes300,023 335,356 (10.5)%586,313 611,059 (4.0)%
Provision for income taxesProvision for income taxes67,007 63,763 5.1 %162,295 179,080 (9.4)%Provision for income taxes57,784 45,738 26.3 %115,500 95,288 21.2 %
Effective tax rateEffective tax rate19.0 %19.5 %(0.5)16.8 %19.0 %(2.2)Effective tax rate19.3 %13.6 %5.7 19.7 %15.6 %4.1 
Net earningsNet earnings286,026 263,756 8.4 %801,797 761,033 5.4 %Net earnings242,239 289,618 (16.4)%470,813 515,771 (8.7)%
Net earnings per common share - dilutedNet earnings per common share - diluted$2.00 $1.81 10.5 %$5.55 $5.24 5.9 %Net earnings per common share - diluted$1.72 $2.00 (14.0)%$3.35 $3.56 (5.9)%
* nm - not meaningful

Revenue

Revenue for the three months ended SeptemberJune 30, 2022 increased $140.02023 decreased $58.6 million, or 6.9%2.7%, from the prior year comparable quarter. Results included organic revenue growthdecline of 9.0%3.0%, primarily led by our Engineered Products and Climate & Sustainability Technologies segments, and acquisition-related revenue growth of 4.4%, primarily driven by our Clean Energy & Fueling segment. This growth was partially offset byand Engineered Products segments, and an unfavorable impact from foreign currency translation of 4.8% and disposition-related0.6%. This decline was partially offset by acquisition-related revenue growth of 1.7%.0.9%, primarily driven by our Pumps & Process Solutions segment. Customer pricing favorably impacted revenue by approximately 7.6%4.5% in the thirdsecond quarter of 20222023 compared to 3.6%6.6% in the prior year comparable quarter.

Revenue for the ninesix months ended SeptemberJune 30, 2022 increased $451.12023 decreased $31.5 million, or 7.6%0.7%, from the prior year comparable period. The increasedecrease primarily reflects organic revenue growth of 8.6%, primarily led by our Engineered Products and Climate & Sustainability Technologies segments. Acquisition-related growth was 4.3%, primarily led by our Clean Energy & Fueling segment. This growth was partially offset by an unfavorable impact from foreign currency translation of 3.6%1.5% and a 1.7% impact from dispositions within the Climateorganic revenue decline of 0.1%. This decline was partially offset by acquisition-related revenue growth was 0.9%, primarily led by our Pumps & Sustainability TechnologiesProcess Solutions segment. Customer pricing favorably impacted revenue by approximately 6.7%4.8% for the ninesix months ended SeptemberJune 30, 20222023 compared to 2.2%6.3% in the prior year comparable period.

Gross Profit

Gross profit for the three months ended SeptemberJune 30, 2022 increased $18.22023 decreased $22.4 million, or 2.4%2.9%, while gross profit margin decreased 160 basis points to 35.8%, from the prior year comparable quarter. Our pricing initiatives which started in 2021 and into 2022 offset increased material and logistics costs.

Gross profit for the nine months ended September 30, 2022 increased $48.9 million, or 2.2%, while gross profit margin decreased by 19010 basis points to 36.1%, from the prior year comparable quarter. Gross profit margin decreased due to product mix and lower volumes across the Company's businesses, partially offset by pricing initiatives.

Gross profit for the six months ended June 30, 2023 decreased $18.6 million, or 1.2%, while gross profit margin decreased by 20 basis points to 36.0%, from the prior year comparable period. OurGross profit margin decreased due to lower volumes and product mix across the Company's businesses, partially offset by pricing initiatives which started in 2021 and into 2022 offset increased material and logistics costs.initiatives.


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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended SeptemberJune 30, 2022 decreased $10.22023 increased $9.9 million, or 2.5%2.3%, from the prior year comparable quarter, primarily due to the impact of foreign currencyincreased restructuring costs and lower accrued expenses,deferred compensation, partially offset by increasedlower contract labor costs. As a percentage of revenue, selling, general and administrative expenses decreased 180increased 100 basis points as compared to the prior year comparable quarter to 18.6%20.7% due to an increaseincreased selling, general and administrative expenses and a decrease in the revenue base.revenue.

Selling, general and administrative expenses for the ninesix months ended SeptemberJune 30, 2022 increased $21.02023 decreased $1.5 million, or 1.7%0.2%, from the prior year comparable period, primarily due to increasedlower insurance claims and contract labor costs, travel and marketing expenses, and amortization expense from acquisitions.partially offset by increased restructuring costs. Selling, general and administrative expenses as a percentage of revenue decreased 110increased 10 basis points as compared to the prior year comparable period to 20.0%20.7% due to an increasea decrease in the revenue base.

Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to $44.0$39.3 million and $34.4$38.6 million for the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively, and $123.3$77.3 million and $116.8$79.3 million, for the ninesix months ended SeptemberJune 30, 20222023 and 2021,2022, respectively. These costs as a percentpercentage of revenue were 2.0%1.9% and 1.7%1.8% for the three months ended SeptemberJune 30, 20222023 and 2021,2022, respectively, and 1.9% and 2.0%1.9% for the ninesix months ended SeptemberJune 30, 2023 and 2022, and 2021, respectively.

Other income,Income, net

Other income, net includes non-service pension benefit, deferred compensation plan investments gain or loss, earnings or charges from equity method investments, foreign exchange gain or loss, and various other items. Other income, net for the three and ninesix months ended SeptemberJune 30, 20222023 increased $0.7$2.1 million and $0.4$3.8 million, respectively, from the prior year comparable periods due to various immaterial items.

Income Taxes

The effective tax rates for the three months ended SeptemberJune 30, 2023 and 2022 were 19.3% and 2021 were 19.0% and 19.5%13.6%, respectively. The decreaseincrease in the effective tax rate for the three months ended SeptemberJune 30, 20222023 relative to the prior year comparable quarter was primarily driven by favorable audit resolutions in 2022, including $22.6 million related to the Tax Cuts and recording of previously unrecognized tax attributes.Jobs Act.

The effective tax rates for the ninesix months ended SeptemberJune 30, 2023 and 2022 were 19.7% and 2021 were 16.8% and 19.0%15.6%, respectively. The decreaseincrease in the effective tax rate for the ninesix months ended SeptemberJune 30, 20222023 relative to the prior year comparable period was primarily driven by favorable audit resolutions as well asin 2022, including $22.6 million related to the Tax Cuts and Jobs Act.

Net earnings

Net earnings for the three months ended SeptemberJune 30, 2022 increased 8.4%2023 decreased 16.4% to $286.0$242.2 million, or $2.00$1.72 diluted earnings per share, from $263.8$289.6 million, or $1.81$2.00 diluted earnings per share, in the prior year comparable quarter. The increasedecrease in net earnings is mainly attributable to decreased revenue and increased volumes, productivity initiatives, favorable business mix, and customer pricing actions,restructuring costs, partially offset by increased material, energy,customer pricing and logistics costs, increased labor costs, and unfavorable impact from foreign currency translation.productivity actions.

Net earnings for the ninesix months ended SeptemberJune 30, 2022 increased 5.4%2023 decreased 8.7% to $801.8$470.8 million, or $5.55$3.35 diluted earnings per share, from $761.0$515.8 million, or $5.24$3.56 diluted earnings per share, in the prior year comparable period.quarter. The increasedecrease in net earnings is mainly attributable to decreased revenue and increased volumes, favorable business mix, pricing initiatives, productivity actions, and restructuring benefitscosts, partially offset by higher materialcustomer pricing and logistic costs, increased labor costs and an unfavorable impact from foreign currency translation. Additionally, the nine months ended September 30, 2022 was impacted by a $22.6 million reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.


productivity actions.

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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, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions, and Climate & Sustainability Technologies). Each of these segments is comprised of various product and service offerings that serve multiple markets. We evaluate our operating segment performance based on segment earnings as defined in Note 1615 — Segment Information in the Condensed Consolidated Financial Statementscondensed consolidated financial statements in Item 1 of this Form 10-Q. 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 provides a wide range of equipment, components, software, solutions and services forto the vehicle aftermarket, waste handling, industrial automation, aerospace and defense, industrial winch and hoist, and fluid dispensing end-markets.
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)(dollars in thousands)20222021% Change20222021% Change(dollars in thousands)20232022% Change20232022% Change
RevenueRevenue$516,501 $447,798 15.3 %$1,518,584 $1,318,016 15.2 %Revenue$473,687 $514,436 (7.9)%$971,236 $1,002,083 (3.1)%
Segment earningsSegment earnings$90,145 $67,376 33.8 %$242,946 $215,315 12.8 %Segment earnings$73,076 $81,671 (10.5)%$157,351 $152,801 3.0 %
Segment marginSegment margin17.5%15.0%16.0%16.3%Segment margin15.4 %15.9 %16.2%15.2%
Operational metrics:Operational metrics:Operational metrics:
BookingsBookings$512,374 $502,767 1.9 %$1,506,077 $1,528,277 (1.5)%Bookings$489,131 $452,668 8.1 %$1,025,603 $993,703 3.2 %
BacklogBacklog$742,766 $662,834 12.1 %Backlog$771,888 $759,589 1.6 %
Components of revenue growth: 
Organic growth  17.6 %16.9 %
Acquisitions  0.6 %1.0 %
Components of revenue decline:Components of revenue decline: 
Organic declineOrganic decline  (7.7)%(2.3)%
Foreign currency translationForeign currency translation  (2.9)%(2.7)%Foreign currency translation  (0.2)%(0.8)%
  15.3 %15.2 %
Total revenue declineTotal revenue decline  (7.9)%(3.1)%

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ThirdSecond Quarter 20222023 Compared to the ThirdSecond Quarter 20212022

Engineered Products segment revenue for the thirdsecond quarter of 2022 increased $68.72023 decreased $40.7 million, or 15.3%7.9%, as compared to the thirdsecond quarter of 2021,2022, comprised primarily of organic growthdecline of 17.6%, acquisition-related growth of 0.6%, partially offset by7.7% and an unfavorable impact from foreign currency translation of 2.9%0.2%. Customer pricing favorably impacted revenue in the thirdsecond quarter of 20222023 by approximately 10.6%2.1% compared to 6.5%10.3% in the prior year comparable quarter, reflecting actions to recover increasing costs.quarter.
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The organic revenue growthdecline was most notableprimarily driven by transient manufacturing and shipment disruptions in our vehicle services group caused by an ERP system upgrade, partially offset by robust demand in our waste handling business as large national waste haulers and municipal governments invest to upgrade their refuse collection vehicle service, industrial automation,fleets and implement our leading digital technologies to improve waste collection process efficiencies. Our aerospace and defense and industrial winch and hoist businesses. Despite the strongbusinesses experienced modest organic declines primarily related to timing of programs with key defense customers. We expect to return to positive organic growth and near record-high backlog levels forin the segment, shipments continue to be challenged by supply chain and labor availability constraints. We anticipate organic revenue growth to continue intosecond half of the fourth quarteryear, driven by a healthy backlog position and strong order demand trends in several of our key end-markets,end markets, most notably in waste handling and aerospace and defense.defense, as well as sequential recovery of deferred shipments in our vehicle lift business.

Engineered Products segment earnings increased $22.8decreased $8.6 million, or 33.8%10.5%, compared to the thirdsecond quarter of 2021.2022. The increasedecrease was primarily driven by increasedlower volumes, customer pricing actionsdisruptions associated with the ERP implementation in our vehicle services group, and productivity gains, partially offset by higher material, energy, and logistic costs, increased labor costs, as well as an unfavorable impact from foreign currency translation.translation, partially offset by customer pricing actions and improved plant productivity. As a result, segment margin increaseddecreased to 17.5%15.4% from 15.0%15.9% as compared to the prior year comparable quarter.

Bookings increased 1.9%8.1% for the segment, comprised primarily of acquisition-related growth of 3.1%, organic growth of 0.8%,8.4% partially offset by an unfavorable impact from foreign currency translation of 2.0%0.3%. The organic bookings growth was driven by strongrobust demand in our waste handling and aerospace and defense businesses.business, which is expected to continue in the second half of the year as large waste haulers upgrade their vehicle fleets, partially offset by disruptions associated with the ERP system implementation in our vehicle services group. Segment book-to-bill was 0.99. Backlog1.03, and backlog increased 12.1%1.6% compared to the prior year comparable period.

NineSix Months Ended SeptemberJune 30, 20222023 Compared to the NineSix Months Ended SeptemberJune 30, 20212022

Engineered Products revenue for the ninesix months ended SeptemberJune 30, 2022 increased $200.62023 decreased $30.8 million, or 15.2%3.1%, compared to the prior year comparable period. This was comprised of organic revenue growthdecline of 16.9%2.3% and acquisition-related growth of 1.0%, partially offset by an unfavorable impact from foreign currency translation of 2.7%0.8%. The organic revenue growthdecline was most notabledue to transient manufacturing and shipment disruptions in our vehicle services group caused by an ERP system upgrade, partially offset by customer pricing actions and strong growth in our waste handling vehicle service, industrial automation, and industrial winch and hoist businesses.business. Customer pricing favorably impacted revenue in the nine months ended September 30, 2022 by approximately 10.6%3.0% compared to 3.2%10.5% in the prior year comparable period.

Segment earnings for the ninesix months ended SeptemberJune 30, 20222023 increased $27.6$4.6 million, or 12.8%3.0%, as compared to the 20212022 comparable period. The growth was primarily driven by increased volumes, favorable business mix, and customer pricing actions, improved plant productivity and strong discretionary cost management, partially offset by higher material, energy and logistic costs, increased labor costs,lower volumes, as well as an unfavorable impact from foreign currency translation. Segment margin decreasedincreased to 16.0%16.2% from 16.3%15.2% as compared to the prior year comparable period.


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Clean Energy & Fueling

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

Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)(dollars in thousands)20222021% Change20222021% Change(dollars in thousands)20232022% Change20232022% Change
RevenueRevenue$464,022 $410,561 13.0 %$1,416,492 $1,237,281 14.5 %Revenue$441,166 $494,075 (10.7)%$871,895 $952,470 (8.5)%
Segment earningsSegment earnings$90,208 $80,101 12.6 %$262,204 $253,103 3.6 %Segment earnings$83,616 $99,034 (15.6)%$157,221 $171,996 (8.6)%
Segment marginSegment margin19.4%19.5%18.5%20.5%Segment margin19.0 %20.0 %18.0%18.1%
Operational metrics:Operational metrics:Operational metrics:
BookingsBookings$432,259 $467,821 (7.6)%$1,421,611 $1,343,635 5.8 %Bookings$440,137 $487,861 (9.8)%$894,663 $989,352 (9.6)%
BacklogBacklog$368,050 $312,176 17.9 %Backlog$339,322 $411,350 (17.5)%
Components of revenue growth:  
Components of revenue decline:Components of revenue decline:  
Organic declineOrganic decline  (0.5)%(0.5)%Organic decline  (9.3)%(6.1)%
Acquisitions  18.5 %18.4 %
Foreign currency translationForeign currency translation  (5.0)%(3.4)%Foreign currency translation  (1.4)%(2.4)%
  13.0 %14.5 %
Total revenue declineTotal revenue decline  (10.7)%(8.5)%

ThirdSecond Quarter 20222023 Compared to the ThirdSecond Quarter 20212022

Clean Energy & Fueling segment revenue for the thirdsecond quarter of 2022 increased $53.52023 decreased $52.9 million, or 13.0%10.7%, as compared to the thirdsecond quarter of 2021,2022, comprised of acquisition-related growthan organic decline of 18.5%, partially offset by9.3% and an unfavorable impact from foreign currency translation of 5.0%, and an organic decline of 0.5%1.4%. Acquisition-related growth was driven by the acquisitions of RegO, Acme Cryogenics, and Liqal BV. Customer pricing favorably impacted revenue in the thirdsecond quarter of 20222023 by approximately 7.2%4.8% compared to 2.0%5.4% in the prior year comparable quarter.

The organic revenue decline was primarily driven by reduced year-over-year demand in above ground retail fueling driven by customer construction delaysequipment due to the expected roll-off of EMV-related demand and general destocking across our distribution channels as higher interest rates have resulted in North Americahigher carrying costs of inventory for distributors, and overall caution among operators in Europe and Asia as a result of the weakening macroeconomic environment. This was mostlypartially offset by solid demand in our below ground retail fueling, fluid transfer solutions, and vehicle wash solutions business, along with pricing actions aimed at mitigating material and logistics cost inflation. We expect a modest improvement inyear-over-year organic growth rates to become positive in the fourth quarter,second half of the year as the negative year-over-year impact from EMV-related demand remains constructivenormalizes and we see positive growth in our key end-markets, most notably the retail fueling, fluid transfer andsolutions, vehicle wash businesses,solutions and we anticipate improvements related to supply chain and logistics constraints. In light of market conditions, we have made and will continue to make proactive adjustments to our cost structure through restructuring and other programs to align with current demand trends.clean energy solutions businesses.

Clean Energy & Fueling segment earnings increased $10.1decreased $15.4 million, or 12.6%15.6%, over the prior year comparable quarter. The increasedecrease was primarily driven by reduced volumes, partially offset by pricing actions, productivity initiatives cost actions in above ground fueling, and the favorable impactbenefits from acquisitions, which more than offset the unfavorable impact to earnings from foreign currency translation, reduced volumesongoing restructuring actions taken in above groundour retail fueling business. The benefits from these restructuring actions are significant and increased material, logisticswill carry into 2024. See "Restructuring and labor costs.Other Costs (Benefits)" section within this Item 2 for further information. Segment margin decreased to 19.4%19.0% from 19.5%20.0% in the prior year comparable quarter.quarter driven by lower volumes.

Overall bookings decreased 7.6%9.8% as compared to the prior year comparable quarter, driven by an organic decline of 17.6%8.4% and an unfavorable impact from foreign currency translation of 2.7%, partially offset by acquisition-related growth of 12.7%1.4%. The organic bookings decline was primarily driven by improving lead times throughout the segment as well as the decrease inreduced year over year demand in above ground retail fueling.fueling equipment. Segment book-to-bill was 0.93. Backlog increased 17.9%1.00 and backlog decreased 17.5% as compared to the prior year comparable period, driven by the acquisitions completed in 2021.period.

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NineSix Months Ended SeptemberJune 30, 20222023 Compared to the NineSix Months Ended SeptemberJune 30, 20212022

Clean Energy & Fueling segment revenue increased $179.2decreased $80.6 million, or 14.5%8.5%, as compared to the ninesix months ended SeptemberJune 30, 2021,2022, attributable to acquisition-related growthan organic decline of 18.4%, partially offset by6.1% and an unfavorable impact from foreign currency translation of 3.4%, and an organic decline of 0.5%2.4%. Organic revenue was modestly lower in the first ninesix months of the year compared with the prior year's comparable period, as strongdriven by reduced year-over-year demand in ourabove ground retail fueling equipment due to the expected roll-off of EMV-related demand and general destocking across our distribution channels as higher interest rates have resulted in higher carrying costs of inventory for distributors, and was partially offset by solid demand in fluid transfer solutions, along with pricing actions aimed at mitigating material and vehicle wash solutions markets was more than offset by the unfavorable impact from the normalization of EMV related demand in North America.logistics cost inflation. Customer pricing favorably impacted revenue in the nine months ended September 30, 2022 by approximately 5.2% 4.7% compared to 1.8%4.2% in the prior year comparable period.period.

Clean Energy & Fueling segment earnings increased $9.1decreased $14.8 million, or 3.6%8.6%, for the ninesix months ended SeptemberJune 30, 2022.2023. The increasedecrease in earnings was favorably impacteddriven by acquisitions, strategic pricing,reduced organic volumes and cost actions, which more than offset reduced demand in above ground retail fueling, increased material, logistics and labor costs, and an unfavorable impact from foreign currency translation.translation, partially offset by pricing actions, productivity initiatives and the benefits from ongoing restructuring actions in our retail fueling business. Segment margin decreased to 18.5%18.0% from 20.5%18.1% in the prior year comparable period.
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Imaging & Identification

Our Imaging & Identification segment supplies precision marking and coding, packaging intelligence, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical, industrial manufacturing, fashion and appareltextile and other end-markets.
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)(dollars in thousands)20222021% Change20222021% Change(dollars in thousands)20232022% Change20232022% Change
RevenueRevenue$282,371 $292,535 (3.5)%$830,577 $870,939 (4.6)%Revenue$271,932 $275,951 (1.5)%$555,023 $548,206 1.2 %
Segment earningsSegment earnings$74,477 $70,635 5.4 %$194,467 $200,818 (3.2)%Segment earnings$61,336 $61,392 (0.1)%$129,651 $119,990 8.1 %
Segment marginSegment margin26.4%24.1%23.4%23.1%Segment margin22.6 %22.2 %23.4%21.9%
Operational metrics:Operational metrics:Operational metrics:
BookingsBookings$281,789 $293,782 (4.1)%$881,029 $887,004 (0.7)%Bookings$262,092 $292,136 (10.3)%$552,804 $599,240 (7.7)%
BacklogBacklog$241,896 $204,766 18.1 %Backlog$227,646 $255,255 (10.8)%
Components of revenue decline:Components of revenue decline:  Components of revenue decline:  
Organic growthOrganic growth  4.9 %1.0 %Organic growth  0.3 %4.2 %
Acquisitions  — %0.3 %
Foreign currency translationForeign currency translation  (8.4)%(5.9)%Foreign currency translation  (1.8)%(3.0)%
  (3.5)%(4.6)%
Total revenue declineTotal revenue decline  (1.5)%1.2 %

ThirdSecond Quarter 20222023 Compared to the ThirdSecond Quarter 20212022

Imaging & Identification segment revenue for the thirdsecond quarter of 20222023 decreased $10.2$4.0 million, or 3.5%1.5%, as compared to the thirdsecond quarter of 2021,2022, comprised of organic growth of 4.9%, which was more than offset by an unfavorable impact from foreign currency translation of 8.4%1.8%, which was partially offset by organic growth of 0.3%. Customer pricing favorably impacted revenue in the thirdsecond quarter of 20222023 by approximately 4.4%6.0% compared to 0.7%3.2% in the prior year comparable quarter.

The organic revenue growth was primarily driven by solid activitypricing initiatives, partially offset by reduced demand in our textile printing business which has continued to be impacted by high energy prices and macro uncertainty in textile producing regions. Marking and coding demand has remained solid in the Americas and in Europe, whereas slower macroeconomic conditions have reduced investments in new equipment by customers in Asia. We expect organic growth rates to moderate in the second half of the year as demand in marking and coding business, as underlying demand for our printers, spare parts, services and consumables remains positive, and we have seen improvementsslows due to reduced customer investment, principally in component availability and an easing of COVID-related restrictions in China experienced in the first half of 2022. We expect deliveries in our marking and coding business to remain positive in the fourth quarter, as component availability continues to improve and underlying demand for our printers and consumables remains positive.China.

Imaging & Identification segment earnings increased $3.8decreased $0.1 million, or 5.4%0.1%, over the prior year comparable quarter. This increasedecrease was primarily driven by reduced organic volumes in our digital textile printing business, material and labor cost inflation and an unfavorable impact from foreign currency translation, partially offset by pricing initiatives organic revenue growth,and productivity actions, and product mix.actions. Segment margin increased to 26.4%22.6% from 24.1%22.2% in the prior year comparable quarter.

Overall bookings decreased 4.1%10.3% as compared to the prior year comparable quarter, reflecting an organic growthdecline of 3.7%, more than offset by8.5% and an unfavorable impact from foreign currency translation of 7.8%1.8%. OrganicThe organic bookings growthdecline was primarily driven by solid demand for new equipment, spare parts, services and consumablesreduced order intake in our marking and coding and digital textile printing businesses, partially offset by increased bookings in our serialization software business. Segment book-to-bill was 1.00. Backlog increased 18.1%0.96, and backlog decreased 10.8% as compared to the prior year comparable period.

Nine
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Six Months Ended SeptemberJune 30, 20222023 Compared to the NineSix Months Ended SeptemberJune 30, 20212022

Imaging & Identification segment revenue decreased $40.4increased $6.8 million, or 4.6%1.2%, as compared to the ninesix months ended SeptemberJune 30, 2021,2022, attributable to organic growth of 4.2%, partially offset by an unfavorable impact from foreign currency translation of 5.9%, partially offset by organic growth of 1.0%, and acquisition-related growth of 0.3%3.0%. The organic revenue growth was primarily driven by pricing initiatives and solid demandactivity in our marking and coding business, partially offset by reducedweaker demand in our digital textile printing business. Customer pricing favorably impacted revenue in the nine months ended September 30, 2022 by approximately 3.2%6.4% compared to 0.9%2.6% in the prior year comparable period.


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Imaging & Identification segment earnings decreased $6.4increased $9.7 million, or 3.2%8.1%, for the ninesix months ended SeptemberJune 30, 20222023 over the prior year comparable period. The decreaseincrease was primarily driven by unfavorablepricing initiatives and productivity actions, which more than offset negative impacts from material and labor cost inflation and foreign exchange impacts and higher input costs, partially offset by cost reduction initiatives, price increases, organic revenue growth and restructuring benefits.currency translation. Segment margin increased to 23.4% from 23.1%21.9% in the prior year comparable period.


quarter.


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Pumps & Process Solutions

Our Pumps & Process Solutions segment manufactures specialty pumps and flow meters, fluid connecting solutions, plastics and polymer processing equipment, and highly-engineeredhighly engineered precision components for rotating and reciprocating machines, fluid connecting solutions and plastics and polymer processing equipment, serving single-use biopharmaceutical production, diversified industrial manufacturing, chemical production, plastics and polymer processing, midstream and downstream oil and gas, thermal management applications and other end-markets.
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)(dollars in thousands)20222021% Change20222021% Change(dollars in thousands)20232022% Change20232022% Change
RevenueRevenue$433,558 $438,240 (1.1)%$1,309,880 $1,261,318 3.9 %Revenue$465,626 $441,127 5.6 %$879,507 $876,322 0.4 %
Segment earningsSegment earnings$128,573 $150,275 (14.4)%$413,238 $425,929 (3.0)%Segment earnings$129,337 $138,048 (6.3)%$244,581 $284,665 (14.1)%
Segment marginSegment margin29.7%34.3%31.5%33.8%Segment margin27.8 %31.3 %27.8%32.5%
Operational metrics:Operational metrics:Operational metrics:
BookingsBookings$415,253 $490,581 (15.4)%$1,346,736 $1,562,956 (13.8)%Bookings$394,317 $471,693 (16.4)%$858,614 $931,483 (7.8)%
BacklogBacklog$679,955 $682,415 (0.4)%Backlog$676,191 $715,646 (5.5)%
Components of revenue decline: 
Organic growth  1.9 %6.9 %
Components of revenue growth:Components of revenue growth: 
Organic growth/(decline)Organic growth/(decline)  0.9 %(3.1)%
AcquisitionsAcquisitions  2.3 %1.0 %Acquisitions  4.5 %4.4 %
Foreign currency translationForeign currency translation  (5.3)%(4.0)%Foreign currency translation  0.2 %(0.9)%
  (1.1)%3.9 %
Total revenue growthTotal revenue growth  5.6 %0.4 %

ThirdSecond Quarter 20222023 Compared to the ThirdSecond Quarter 20212022

Pumps & Process Solutions segment revenue for the thirdsecond quarter of 2022 decreased $4.72023 increased $24.5 million, or 1.1%5.6%, as compared to the thirdsecond quarter of 2021,2022, driven by acquisition-related growth of 2.3%4.5%, organic growth of 1.9%0.9%, and an unfavorablea favorable impact from foreign currency translation of 5.3%0.2%. Acquisition-related growth was primarily driven by the acquisition of AMN DPI and Malema Engineering Corporation.Corporation in the third quarter of 2022 and Witte Pumps & Technology GmbH in the fourth quarter of 2022. Customer pricing favorably impacted revenue in the thirdsecond quarter of 20222023 by approximately 4.4%5.1% compared to 2.3%3.4% in the prior year comparable quarter.

The organic revenue growth was primarily driven by pricing initiatives, along with continued strength in our core non-COVID-19 biopharma platform, industrial pumps, plastics andthermal connectors, polymer processing solutions, andequipment, bearings and compression components, businesses which all grew revenue drivenand hygienic dosing businesses. This was partially offset by solid end market demand and strong backlogs. Revenue fromreduced shipments of single-use pumps and connectors used in biopharmaceutical production processes declined compared to the third quarter of 2021, as biopharmaceutical manufacturers reduced orders for components used in COVID-19 vaccine production. While underlying demand remains positiveproduction and biopharmaceutical manufacturers repurposing inventory purchased for the COVID-19 vaccine production toward production of non-COVID-19 therapies. We expect continued strength in our core biopharmaceutical platform, we expect sales of products usedthermal connectors, polymer processing equipment, bearings and compression components, and hygienic dosing systems businesses in the productionsecond half of COVID-19 vaccines to continue to decline in 2022 and into early 2023.the year.

Pumps & Process Solutions segment earnings decreased $21.7$8.7 million, or 14.4%6.3%, over the prior year comparable quarter. The decrease was primarily driven by the impact of reduced revenues relating to single usebiopharmaceutical components. This was partially offset by pricing initiatives, conversion on increased revenues in thermal connectors, polymer processing equipment, bearings and compression components, and hygienic dosing systems, as well as productivity actions and restructuring benefits. Segment margin decreased to 27.8% from 31.3% from the prior year comparable quarter mainly due to business mix within the segment.

Overall bookings decreased 16.4% as compared to the prior year comparable quarter driven by an organic decline of 19.4%, and an unfavorable impact from foreign currency translation of 0.1% partially offset by acquisition-related growth of 3.1%. The organic bookings decline was driven by a decrease in orders for biopharmaceutical components and order timing in our polymer processing equipment business, partially offset by continued strong order intake in our bearings and compression components business. Segment book-to-bill was 0.85, and backlog decreased 5.5% compared to the prior year comparable period.

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Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

Pumps & Process Solutions segment revenue increased $3.2 million, or 0.4%, as compared to the six months ended June 30, 2022, attributable to acquisition-related growth of 4.4%, partially offset by organic decline of 3.1% and an unfavorable impact from foreign currency translation of 0.9%. The organic decline was primarily driven by reduced shipments for components used in COVID-19 vaccine production and biopharmaceutical manufacturers repurposing inventory purchased for the COVID-19 vaccine production toward production of non-COVID-19 therapies. This decline was partially offset by pricing initiatives, along with materialcontinued strength in industrial pumps, thermal connectors, plastics and labor cost inflationpolymer processing solutions and bearings and compression components. Customer pricing favorably impacted revenue by approximately 5.0% compared to 3.5% in the prior comparable period.

Pumps & Process Solutions segment earnings decreased $40.1 million, or 14.1%, for the six months ended June 30, 2023 over the prior year comparable period. The decrease was primarily driven by the impact of reduced revenues relating to biopharmaceutical components along with foreign currency translation headwinds. This was partially offset by pricing initiatives, conversion on increased revenues in industrial pumps, plastics and polymer processing solutions and bearings and compression components, productivity actions and restructuring benefits. Segment margin decreased to 29.7%27.8% from 34.3% from the prior year comparable quarter mainly due to revenue mix within the segment.

Overall bookings decreased 15.4% as compared to the prior year comparable quarter, reflecting an organic decline of 12.2%, an unfavorable impact from foreign currency translation of 4.7%, partially offset by acquisition-related growth of 1.5%. The organic bookings decline was driven by a decrease in orders for biopharmaceutical components used in COVID-19 vaccine production, partially offset by continued strong order intake in our plastics and polymer processing solutions and bearings and compression components businesses. Segment book-to-bill was 0.96. Backlog decreased 0.4% compared to the prior year comparable period.



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Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021

Pumps & Process Solutions segment revenue increased $48.6 million, or 3.9%, as compared to the nine months ended September 30, 2021, attributable to organic growth of 6.9% and acquisition-related growth of 1.0%, partially offset by an unfavorable impact from foreign currency translation of 4.0%. The organic growth was primarily driven by continued demand strength and strong backlogs entering the year in our core non-COVID-19 biopharma platform, industrial pumps, plastics and polymer processing solutions, and bearings and compression components businesses. The increase was partially offset by reduced demand for biopharmaceutical components used in COVID-19 vaccine production. Customer pricing favorably impacted revenue in the nine months ended September 30, 2022 by approximately 3.8% compared to 1.5% in the prior comparable period.

Pumps & Process Solutions segment earnings decreased $12.7 million, or 3.0%, for the nine months ended September 30, 2022 over the prior year comparable period, predominantly driven by conversion on higher revenues, pricing initiatives, productivity actions, and restructuring benefits, which were more than offset by an unfavorable impact from material and labor cost inflation, and an unfavorable impact from foreign exchange. Segment margin decreased to 31.5% from 33.8%32.5% from the prior year comparable period.
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Climate & Sustainability Technologies
Our Climate & Sustainability Technologies segment is a provider of innovative and energy-efficient equipment, components and systems that serveparts for the commercial refrigeration, heating and cooling and beverage can-making equipment markets.
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)(dollars in thousands)20222021% Change20222021% Change(dollars in thousands)20232022% Change20232022% Change
RevenueRevenue$462,671 $429,425 7.7 %$1,295,913 $1,232,008 5.2 %Revenue$449,001 $434,164 3.4 %$904,326 $833,242 8.5 %
Segment earningsSegment earnings$75,190 $49,734 51.2 %$192,980 $150,114 28.6 %Segment earnings$76,074 $64,181 18.5 %$149,852 $117,790 27.2 %
Segment marginSegment margin16.3%11.6%14.9%12.2%Segment margin16.9 %14.8 %16.6%14.1%
Operational metrics:Operational metrics:Operational metrics:
BookingsBookings$422,820 $540,280 (21.7)%$1,271,246 $1,684,151 (24.5)%Bookings345,363 $403,574 (14.4)%645,377 $848,426 (23.9)%
BacklogBacklog$1,139,737 $964,233 18.2 %Backlog$797,307 $1,186,180 (32.8)%
Components of revenue growth:Components of revenue growth:Components of revenue growth:
Organic growthOrganic growth19.3 %16.0 %Organic growth4.0 %9.9 %
Dispositions(7.9)%(8.0)%
Foreign currency translationForeign currency translation(3.7)%(2.8)%Foreign currency translation(0.6)%(1.3)%
7.7 %5.2 %
Total revenue growthTotal revenue growth3.4 %8.6 %

ThirdSecond Quarter 20222023 Compared to the ThirdSecond Quarter 20212022

Climate & Sustainability Technologies segment revenue increased $33.2$14.8 million, or 7.7%3.4%, as compared to the thirdsecond quarter of 2021,2022, reflecting organic revenue growth of 19.3%4.0%, partially offset by 7.9% from our disposition of Unified Brands in fourth quarter of 2021, and an unfavorable impact from foreign currency translation of 3.7%0.6%. Customer pricing favorably impacted revenue in the thirdsecond quarter of 20222023 by approximately 10.3%5.3% compared to 5.7%9.5% in the prior year comparable quarter, reflecting actions to recover higher costs.quarter.

The organic revenue growth was driven primarily by customer pricepricing actions implementedas well as strong growth in heat exchangers and natural refrigerant systems, partially offset by modest volume reductions in beverage can-making equipment. Our heat exchanger business continues to recover increased material,experience strong growth as regulation-driven efforts to shift from fossil fuel to electric energy in Europe drive robust demand for heat pump applications, as well as strong global commercial HVAC and logistics costs combined with strong demand across all of our key end-markets.industrial markets. Retail refrigeration revenuesrevenue also increased substantially from the prior year, driven by customer pricing actions, large system refurbishment programs with a key supermarket customer and continued robust end-market demand.growing demand for natural refrigerant systems, partially offset by soft demand in the interest rate sensitive convenience store market. Beverage can-making business revenues experienced strongdeclined from the prior year, primarily related to timing of projects and moderating demand with large beverage can-makers, who are absorbing recent large capacity expansions. We expect modest growth in the second half of the year, driven by continued favorable macro trendsstrong demand for heat exchangers and refrigeration systems, partially offset by reductions in beverage can-making equipment projects as demand moderates from the robust levels experienced in the global beverage industry as producers shift from plastic and glass packaging to aluminum cans for environmental sustainability and merchandising benefits offered by modern aluminum cans. Our heat exchanger business experienced healthy growth across all regions, fueled by regulation-driven heat pump demand in Europe, robust demand in Asia and strengthening commercial HVAC and industrial markets globally. We anticipate organic revenue growth to continue into the fourth quarter driven by a healthy backlog position and strong order demand trends across many of our key end-markets.prior year.

Climate & Sustainability Technologies segment earnings increased $25.5$11.9 million, or 51.2%18.5%, as compared to the thirdsecond quarter of 2021.2022. The segment earnings increase was driven by customer pricing actions, increased volumes and benefits from productivity initiatives, partially offset by higher material and labor costs. Segment margin increased to 16.3%16.9% from 11.6%14.8% in the prior year comparable quarter. The earnings increase was driven by increased volumes, favorable business mix, customer pricing actions, and productivity efficiencies, partially offset by increased material and logistics costs, most notably metals and freight, and increased energy and labor costs, along with the disposition of Unified Brands in the fourth quarter of 2021.

Bookings in the thirdsecond quarter of 20222023 decreased 21.7%14.4% from the prior year comparable quarter, reflecting organic decline of 11.3%, a disposition-related decline of 7.3%,13.7% and an unfavorable impact from foreign currency translation of 3.1%0.7%. The organic bookings decline was principally driven by improving lead times a challenging comparable quarter in the prior year in retail refrigeration and timing of large projects and moderating demand with key customers in beverage can-making equipment, projects.partially offset by continued robust demand for heat exchangers. Segment book-to-bill for the thirdsecond quarter of 20222023 was 0.91.0.77. Backlog increased 18.2%decreased 32.8% over the prior year comparable period, reflective of the continued strongbut remains at healthy levels reflecting constructive demand outlook across all businessesseveral key end markets within the segment.





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NineSix Months Ended SeptemberJune 30, 20222023 Compared to the NineSix Months Ended SeptemberJune 30, 20212022

Climate & Sustainability Technologies segment revenue increased $63.9$71.1 million,, or 5.2%8.5%, compared to the ninesix months ended SeptemberJune 30, 2021,2022, reflecting an organic revenue growth of 16.0%9.9%, partially offset by 8.0% decline from the disposition of Unified Brands and an unfavorable foreign currency translation of 2.8%1.3%. The organic revenue growth for the ninesix months ended SeptemberJune 30, 20222023 was driven by robuststrong demand across allmany of our key end-markets. Retail refrigeration revenues increased from the prior year, driven by robusthealthy remodel and system refurbishment programs with key supermarket customers and continued growing demand for our environmentally friendly natural refrigerant systems in Europe.Europe and North America. Our beverage equipment business experienced strong revenue growth, driven by continued favorable macro trends in the global beverage industry as producers shift from plastic and glass packaging to aluminum cans for environmental sustainability and merchandising benefits offered by modern aluminum cans. Our heat exchanger business experienced healthy growth across all regions, fueled by regulation-driven heat pump demand in Europe robust demand in Asia and strengthening commercial HVAC and industrial markets globally. Customer pricing favorably impacted revenue in the nine months ended September 30, 2022 by approximately 9.7%5.6% compared to 3.0%9.4% in the prior comparable period.

Climate & Sustainability Technologies segment earnings increased $42.9$32.1 million, or 28.6%27.2%, for the ninesix months ended SeptemberJune 30, 2022,2023, as compared to the prior year comparable period. Segment margin increased to 14.9%16.6% from 12.2%14.1% in the prior year. year comparable period. The earnings increase was driven by increased volumes, productivity, favorable business mix and customer pricing actions, partially offset by increased material and logistics costs, most notably metals and freight, plant productivity shortfalls resulting from supply chain disruption and increased energy and labor costs, and the disposition of Unified Brands in the fourth quarter of 2021.


















freight.

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Reconciliation of Segment Earnings to Net Earnings
Three Months Ended September 30,Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
(dollars in thousands)(dollars in thousands)2023202220232022
Net earnings:Net earnings:Net earnings:
Segment earnings:Segment earnings:Segment earnings:
Engineered ProductsEngineered Products$90,145 $67,376 $242,946 $215,315 Engineered Products$73,076 $81,671 $157,351 $152,801 
Clean Energy & FuelingClean Energy & Fueling90,208 80,101 262,204 253,103 Clean Energy & Fueling83,616 99,034 157,221 171,996 
Imaging & IdentificationImaging & Identification74,477 70,635 194,467 200,818 Imaging & Identification61,336 61,392 129,651 119,990 
Pumps & Process SolutionsPumps & Process Solutions128,573 150,275 413,238 425,929 Pumps & Process Solutions129,337 138,048 244,581 284,665 
Climate & Sustainability TechnologiesClimate & Sustainability Technologies75,190 49,734 192,980 150,114 Climate & Sustainability Technologies76,074 64,181 149,852 117,790 
Total segment earningsTotal segment earnings458,593 418,121 1,305,835 1,245,279 Total segment earnings423,439 444,326 838,656 847,242 
Purchase accounting expenses (1)
Purchase accounting expenses (1)
40,526 35,587 140,831 106,265 
Purchase accounting expenses (1)
40,200 47,019 82,879 100,305 
Restructuring and other costs (benefits) (2)
8,613 (3,201)27,109 11,740 
Restructuring and other costs (2)
Restructuring and other costs (2)
18,143 7,944 32,196 18,496 
Loss on dispositions (3)
Loss on dispositions (3)
— — 194 — 
Loss on dispositions (3)
— — — 194 
Corporate expense / other (4)
Corporate expense / other (4)
27,876 33,249 93,247 110,332 
Corporate expense / other (4)
33,922 27,967 73,994 65,371 
Interest expenseInterest expense29,789 26,433 83,330 79,917 Interest expense33,804 26,989 68,018 53,541 
Interest incomeInterest income(1,244)(1,466)(2,968)(3,088)Interest income(2,653)(949)(4,744)(1,724)
Earnings before provision for income taxesEarnings before provision for income taxes353,033 327,519 964,092 940,113 Earnings before provision for income taxes300,023 335,356 586,313 611,059 
Provision for income taxesProvision for income taxes67,007 63,763 162,295 179,080 Provision for income taxes57,784 45,738 115,500 95,288 
Net earningsNet earnings$286,026 $263,756 $801,797 $761,033 Net earnings$242,239 $289,618 $470,813 $515,771 
(1) Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.
(2) Restructuring and other costs relate to actions taken for employee reductions, facility consolidations and site closures, product line exits, and other asset charges.
(3) Loss on dispositions includes working capital adjustments related to dispositions.
(4) Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services and digital overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.

Restructuring and Other Costs (Benefits)

Restructuring and other costs (benefits) are not presented in our segment earnings because these costs are excluded from the segment operating performance measure reviewed by management. Restructuring and other costs of $8.6 million and $27.1 million for the three and ninesix months ended SeptemberJune 30, 2023 included restructuring charges of $16.4 million and $28.9 million, respectively and other costs, net of $1.7 million and $3.3 million, respectively. Restructuring charges for the three and six months ended June 30, 2023 were primarily related to headcount reductions and exit costs in the Clean Energy & Fueling, Engineered Products and Pumps & Process Solutions segments. These restructuring programs were initiated in 2022 and 2023 and were undertaken in light of current market conditions. Other costs, net of $2.0 million within the Clean Energy & Fueling segment for the six months ended June 30, 2023 were primarily due to headcount reductions and facility consolidations resulting from restructuring programs initiated in 2021 and 2022. Additionally, restructuring and other costs for the nine months ended September 30, 2022 includes non-cash foreign currency translation losses and asset write-downs due to the substantial liquidation and exit from certain Latin America countries in our Climate & Sustainability Technologies segment.product line rationalization. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statementcondensed consolidated statement of Earnings.earnings. Additional programs beyond the scope of the announced programs may be implemented during 20222023 with related restructuring charges.

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We recorded the following restructuring and other costs (benefits) for the three and ninesix months ended SeptemberJune 30, 2022:2023:
Three Months Ended September 30, 2022
(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
Restructuring$2,027 $3,063 $516 $552 $(85)$1,242 $7,315 
Other costs (benefits), net536 36 347 16 373 (10)1,298 
Restructuring and other costs$2,563 $3,099 $863 $568 $288 $1,232 $8,613 
Nine Months Ended September 30, 2022Three Months Ended June 30, 2023
(dollars in thousands)(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
RestructuringRestructuring$3,008 $4,682 $2,051 $2,713 $5,790 $1,537 $19,781 Restructuring$3,938 $5,847 $865 $3,303 $1,205 $1,241 $16,399 
Other costs, netOther costs, net2,965 35 1,496 18 2,597 217 7,328 Other costs, net891 143 44 531 126 1,744 
Restructuring and other costsRestructuring and other costs$5,973 $4,717 $3,547 $2,731 $8,387 $1,754 $27,109 Restructuring and other costs$3,947 $6,738 $1,008 $3,347 $1,736 $1,367 $18,143 

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Six Months Ended June 30, 2023
(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
Restructuring$4,477 $15,991 $1,204 $4,629 $1,447 $1,127 $28,875 
Other costs (benefits), net34 1,959 496 (3)703 132 3,321 
Restructuring and other costs$4,511 $17,950 $1,700 $4,626 $2,150 $1,259 $32,196 

During the three and nine months ended September 30, 2021, restructuringRestructuring and other activities included restructuring chargescosts of $4.8$7.9 million and $20.7 million, respectively, and other benefits, net, of $8.0 million and $8.9 million, respectively. Restructuring expense for the nine months ended September 30, 2021 was comprised primarily of $8.6 million in new actions initiated in 2020 and 2021 in response to demand conditions and broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization, and asset charges of $12.1 million, including $9.1 million related to a product line exit. Other benefits, net for the three months ended SeptemberJune 30, 2022 were primarily due to headcount reductions and facility consolidations resulting from restructuring programs initiated in 2021 wasand 2022, and asset write-downs. For the six months ended June 30, 2022, substantial liquidation and exit from certain Latin America countries in our Climate & Sustainability Technologies segment contributed to restructuring expenses of $12.5 million and other costs (benefits), net of $6.0 million, comprised primarily of a $9.1 million payment received for previously incurred restructuring costs related to a product line exit ($7.3 million is classified within costs of goodsforeign currency translation losses and services and $1.8 million within selling, general and administrative expenses), partially offset by $1.0 million of restructuring related costs. Other benefits, net for the nine months ended September 30, 2021 was comprised primarily of a $9.1 million payment received for previously incurred restructuring costs related to a product line exit, $3.3 million of gains on sales of assets as a result of restructuring actions, partially offset by $3.4 million of restructuring related costs principally pertaining to footprint consolidation and IT centralization costs.asset write-downs. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the Condensed Consolidated Statementcondensed consolidated statement of Earnings.earnings.

We recorded the following restructuring and other costs (benefits) for the three and ninesix months ended SeptemberJune 30, 20212022:
Three Months Ended September 30, 2021Three Months Ended June 30, 2022
(dollars in thousands)(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
RestructuringRestructuring$870 $1,620 $168 $639 $1,293 $200 $4,790 Restructuring$524 $1,423 $344 $1,476 $159 $383 $4,309 
Other (benefits) costs, net(9,202)(36)1,123 (152)227 49 (7,991)
Restructuring and other (benefits) costs$(8,332)$1,584 $1,291 $487 $1,520 $249 $(3,201)
Other costs, netOther costs, net2,377 963 107 182 3,635 
Restructuring and other costsRestructuring and other costs$2,901 $1,428 $1,307 $1,477 $266 $565 $7,944 

Nine Months Ended September 30, 2021
(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
Restructuring$9,200 $3,084 $1,032 $1,526 $4,637 $1,182 $20,661 
Other (benefits) costs, net(8,859)215 1,119 (2,146)(616)1,366 (8,921)
Restructuring and other costs (benefits)$341 $3,299 $2,151 $(620)$4,021 $2,548 $11,740 

Six Months Ended June 30, 2022
(dollars in thousands)Engineered ProductsClean Energy & FuelingImaging & IdentificationPumps & Process SolutionsClimate & Sustainability TechnologiesCorporateTotal
Restructuring$981 $1,619 $1,535 $2,161 $5,875 $295 $12,466 
Other costs (benefits), net2,429 (1)1,149 2,224 227 6,030 
Restructuring and other costs$3,410 $1,618 $2,684 $2,163 $8,099 $522 $18,496 

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Purchase Accounting Expenses

Purchase accounting expenses primarily relate to amortization of acquiredintangible assets and charges related to fair value step-ups for acquired inventory sold during the period. These expenses are not presented in our segment earnings because they are excluded from the segment operating performance measure reviewed by management. These expenses reconcile to segment earnings as follows:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
(dollars in thousands)(dollars in thousands)2023202220232022
Purchase accounting expensesPurchase accounting expensesPurchase accounting expenses
Engineered ProductsEngineered Products$5,101 $3,991 $15,509 $11,758 Engineered Products$4,991 $5,593 $10,795 $10,408 
Clean Energy & Fueling 1
Clean Energy & Fueling 1
19,416 12,924 77,641 38,976 
Clean Energy & Fueling 1
19,540 26,895 39,107 58,225 
Imaging & IdentificationImaging & Identification5,429 5,925 16,730 17,509 Imaging & Identification5,945 5,609 11,551 11,301 
Pumps & Process SolutionsPumps & Process Solutions5,762 7,374 16,450 21,858 Pumps & Process Solutions4,900 4,097 11,777 10,688 
Climate & Sustainability TechnologiesClimate & Sustainability Technologies4,818 5,373 14,501 16,164 Climate & Sustainability Technologies4,824 4,825 9,649 9,683 
TotalTotal$40,526 $35,587 $140,831 $106,265 Total$40,200 $47,019 $82,879 $100,305 
1 The increase of $6,492 and $38,665 in purchase accounting expenses for the three and nine months ended September 30, 2022, respectively, from the prior year comparable period in our Clean Energy & Fueling segment is due to the acquisition of RegO and Acme Cryogenics in Q4 2021, inclusive of $0 and $18,995, respectively, in charges related to fair value step-ups for inventory.
1 Purchase accounting expenses in our Clean Energy and Fueling segment decreased by $7,355 and $19,118 for the three and six months ended June 30, 2023 from the prior year comparable periods, which include $6,898 and $18,995 of charges, respectively, related to fair value step-ups for inventory from the acquisition of RegO and Acme Cryogenics in Q4 2021.
1 Purchase accounting expenses in our Clean Energy and Fueling segment decreased by $7,355 and $19,118 for the three and six months ended June 30, 2023 from the prior year comparable periods, which include $6,898 and $18,995 of charges, respectively, related to fair value step-ups for inventory from the acquisition of RegO and Acme Cryogenics in Q4 2021.



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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, repurchasesrepurchase 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 for reinvestment in existing businesses and strategic acquisitions.

Cash Flow Summary

The following table is derived from our Condensed Consolidated Statementscondensed consolidated statements of Cash Flows:cash flows:
Nine Months Ended September 30,Six Months Ended June 30,
Cash Flows (dollars in thousands)
20222021
Net Cash Flows Provided By (Used In):  
Cash Flows from Operations (in thousands)
Cash Flows from Operations (in thousands)
20232022
Net cash flows provided by (used in):Net cash flows provided by (used in):  
Operating activitiesOperating activities$467,081 $788,586 Operating activities$436,538 $202,456 
Investing activitiesInvesting activities(402,061)(286,642)Investing activities(86,010)(115,853)
Financing activitiesFinancing activities(133,579)(274,798)Financing activities(444,489)45,265 

Operating Activities

Cash provided byflow from operating activities for the ninesix months ended SeptemberJune 30, 2022 decreased approximately $321.52023 increased by $234.1 million compared to the comparable period in 2021.June 30, 2022. This decreaseincrease was primarily driven by higher investmentsimprovements in the cash flows related to working capital to support business growth, including investments in inventoryto support increasing backlog and mitigate potential inventory shortages given the continuing supply chain disruptions and constraints, as well as higher compensation payouts.capital. Additionally, estimated tax payments increased from 2021 towere higher in 2022 which includesdriven primarily by a $43.5 million income tax payment in 2022 related to the gain on saledisposition of Unified Brands in Q4 2021.Brands.

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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 liquidity by showing changes caused by operational results. The following table provides a calculation of adjusted working capital:
Adjusted Working Capital (dollars in thousands)
September 30, 2022December 31, 2021
Accounts receivable$1,497,062 $1,347,514 
Inventories1,407,797 1,191,095 
Less: Accounts payable1,143,253 1,073,568 
Adjusted working capital$1,761,606 $1,465,041 

Adjusted Working Capital (in thousands)
June 30, 2023December 31, 2022
Accounts receivable$1,561,162 $1,516,871 
Inventories1,396,260 1,366,608 
Less: Accounts payable1,028,928 1,068,144 
Adjusted working capital$1,928,494 $1,815,335 

Adjusted working capital increased from December 31, 2021 by $296.6$113.2 million, or 20.2%6.2%, to $1.8 billion at Septemberin the six months ended June 30, 2022,2023, which reflected an increase of $149.5$44.3 million in accounts receivable, an increase of $29.7 million in inventory and a decrease in accounts payable of $39.2 million. Inventories increased to support normal seasonality trends in advance of higher expected shipment volumes in the second half of the year. The change in accounts receivable and $216.7 million in inventory, partially offset by an increase in accounts payable reflect the timing of $69.7 million. These amounts include the effects of acquisitionspayments and foreign currency translation. Accounts receivable increased compared to the prior year as a result of higher revenue. Inventories increased to support business and backlog growth, and to also mitigate potential inventory shortages due to supply chain disruptions and constraints. These factors also led to an increase in accounts payable.collections.

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 September 30, 2022 and December 31, 2021, amounts due to financial institutions for suppliers using SCF were approximately $190 million and $211 million, respectively. SCF-related payments are classified as a reduction to cash flows from operations. During the nine months ended September 30, 2022 and 2021, amounts paid to SCF financial institutions were approximately $689 million and $596 million, respectively.

Investing Activities

Cash used inflow from investing activities is generally derived from cash outflows for capital expenditures and acquisitions, offset by proceeds from sales of business, property, plant and equipment. ForDuring the ninesix months ended SeptemberJune 30, 2022 and 2021, we used cash2023, the majority of the activity in investing activities was comprised of $402.1 million and $286.6 million, respectively, primarily driven by the the following factors:

Acquisitions: During the nine months ended September 30, 2022, we deployed approximately $229.3 million, net, to acquire AMN and Malema within the Pumps & Process Solutions segment. In comparison, during the nine months ended September 30, 2021, we acquired Espy and CDS Visual within the Engineered Products segment, AvaLAN and Blue Bite within the Clean Energy & Fueling and Imaging & Identification segments, respectively, and Quantex and one other immaterial acquisition within the Pumps & Process Solutions segment for an aggregate of $171.3 million, net.

Capital spending:capital spending. Our capital expenditures increased $44.9decreased $12.1 million during the ninesix months ended SeptemberJune 30, 20222023 compared to the ninesix months ended SeptemberJune 30, 2021. We expect full year 2022 capital expenditures to be approximately $200-$220 million.2022.

We anticipate that capital expenditures and any acquisitions we make through the remainder of 20222023 will be funded from available cash and internally generated funds and, if necessary, through the issuance of commercial paper, use of lines ofborrowings from revolving credit facilities or by accessing the public debt or private debt markets, as necessary.equity markets.

Financing Activities

Our cash flow from financing activities generally relates to the use of cash for repurchases of our common stock and payment of dividends, offset by net borrowing activity. For the nine months ended September 30, 2022 and 2021, we used cash totaling $133.6 million and $274.8 million, respectively, forThe majority of financing activities, with the activity primarily attributablewas attributed to the following:

Repurchase of common stock, including prepayment under an accelerated share repurchase program:stock: During the ninesix months ended SeptemberJune 30, 2023, we repurchased no shares. During the six months ended June 30, 2022, we used $85.0 million to repurchase 641,428 shares and $500.0 million to repurchase a variable number of shares through an accelerated share repurchase transaction. During the nine months ended September 30, 2021, we used $21.6 million to repurchase 182,951 shares.

Commercial paper and other:other short-term borrowings, net: During the ninesix months ended SeptemberJune 30, 2023, we used $289.6 million to pay off commercial paper borrowings. During the six months ended June 30, 2022, we received net proceeds of $682.9$288.0 million from commercial paper and other short-term borrowings, primarily used to fund our accelerated share repurchase transaction and acquisition of Malema. During the nine months ended September 30, 2021, we did not borrow or have proceeds from commercial paper or other short-term borrowings.

Dividend payments: Dividends paidTotal dividend payments to common shareholders were $141.5 million during the ninesix months ended SeptemberJune 30, 2022 totaled $216.6 million2023, as compared to $214.8$144.1 million during the same period in 2021.2022. Our dividends paid per common share increased 1.0% to $1.505$1.01 during the ninesix months ended SeptemberJune 30, 20222023 compared to $1.49$1.00 during the same period in 2021.2022. The number of common shares outstanding decreased in the comparative periods due to share repurchase activity throughout 2022.

Payments to settle employee tax obligations: Payments to settle tax obligations from the exercise of share-based awards declined $22.6$1.0 million compared to the prior year period, primarily due to the decrease in the number of shares exercised.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 Statementscondensed consolidated statements of Cash Flows,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 liquidity because it provides management and investors a measurement of cash generated from operations that ismay be 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:
Nine Months Ended September 30, Six Months Ended June 30,
Free Cash Flow (dollars in thousands)
Free Cash Flow (dollars in thousands)
20222021
Free Cash Flow (dollars in thousands)
20232022
Cash flow provided by operating activitiesCash flow provided by operating activities$467,081 $788,586 Cash flow provided by operating activities$436,538 $202,456 
Less: Capital expendituresLess: Capital expenditures(166,039)(121,157)Less: Capital expenditures(88,454)(100,577)
Free cash flowFree cash flow$301,042 $667,429 Free cash flow$348,084 $101,879 
Cash flow from operating activities as a percentage of revenueCash flow from operating activities as a percentage of revenue7.3 %13.3 %Cash flow from operating activities as a percentage of revenue10.4 %4.8 %
Cash flow from operating activities as a percentage of net earningsCash flow from operating activities as a percentage of net earnings58.3 %103.6 %Cash flow from operating activities as a percentage of net earnings92.7 %39.3 %
Free cash flow as a percentage of revenueFree cash flow as a percentage of revenue4.7 %11.3 %Free cash flow as a percentage of revenue8.3 %2.4 %
Free cash flow as a percentage of net earningsFree cash flow as a percentage of net earnings37.5 %87.7 %Free cash flow as a percentage of net earnings73.9 %19.8 %
 
For the ninesix months ended SeptemberJune 30, 2022, we generated cash flow from operating activities of $467.1 million, representing 7.3% of revenue and 58.3% of net earnings, and2023, we generated free cash flow of $301.0$348.1 million, representing 4.7%8.3% of revenue and 37.5%73.9% of net earnings. Free cash flow for the ninesix months ended SeptemberJune 30, 2022 decreased $366.42023 increased $246.2 million, compared to the prior year periodJune 30, 2022, due to lowerhigher operating cash flow, primarily as a result of increasesimprovements in working capital compensation payouts, estimated tax payments, and investments in capital expenditures compared to the prior year. The nine months ended September 30, 2022 include a $43.5 million income tax payment related to the gain on sale of Unified Brands in the fourth quarter of 2021.

Capitalization

We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common stock. As of SeptemberJune 30, 2022,2023, we maintained a $1.0 billion five-year and $500.0 million 364-day unsecured revolving credit facility (the "Credit Agreement"facilities ("Credit Agreements") with a syndicate of banks which expires on Octoberexpire April 6, 2028 and April 4, 2024. 2024, respectively. We may elect to extend the maturity date of any loans under the 364-day credit facility until April 4, 2025, subject to conditions specified therein. The Credit Agreement is usedAgreements are designated as a liquidity back-upback-stop for ourthe Company's commercial paper program, which was upsized from $1.0 billion to $1.5 billion during the quarter, and also are available for general corporate purposes.

UnderAt the Company's election, loans under the Credit Agreement, we are requiredAgreements will bear interest at a base rate plus an applicable margin. The Credit Agreements require the Company to pay a facility fee and impose various restrictions on the Company such as, among other things, a requirement to maintain an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1.0. We wereThe Company was in compliance with this covenantall covenants in the Credit Agreements and our other long-term debt covenants at SeptemberJune 30, 20222023 and had an interest coverage ratio of 17.5consolidated EBITDA to consolidated net interest expense of 13.7 to 1. We are not aware of any potential impairment to our liquidity and expect to remain in compliance with all of our debt covenants. Additionally, our earliest long-term debt maturity is in 2025.

We also have a current shelf registration statement filed with the Securities and Exchange CommissionSEC 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 SeptemberJune 30, 2022,2023, our cash and cash equivalents totaled $306.0$285.8 million, of which $250.8 approximately $259.5 million waswas held outside the United States. At December 31, 2021,2022, our cash and cash equivalents totaled $385.5$380.9 million, of which $257.5which approximately $261.4 million waswas held outside the United States.States. Cash and cash equivalents are held primarily in bank deposits with highly rated banks. We regularly hold cash in excess of near-term requirements are invested in highly liquid investment-gradebank deposits or invest the funds in government money market instruments or short-term investments, or bank deposits, which consist of investment-gradeinvestment grade time deposits with original maturity dates at the time of purchase of no greater than three months.

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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 reconciliationcalculation of net debt to net capitalization tofrom the most directly comparable GAAP measures:
Net Debt to Net Capitalization Ratio (dollars in thousands)
September 30, 2022December 31, 2021
Commercial paper$788,034 $105,000 
Other826 702 
Short-term borrowings$788,860 $105,702 
Long-term debt$2,842,662 $3,018,714 
Total debt3,631,522 3,124,416 
Less: Cash and cash equivalents(306,002)(385,504)
Net debt3,325,520 2,738,912 
Add: Stockholders' equity3,991,426 4,189,528 
Net capitalization$7,316,946 $6,928,440 
Net debt to net capitalization45.4 %39.5 %

Net Debt to Net Capitalization Ratio
(dollars in thousands)
June 30, 2023December 31, 2022
Commercial paper$445,500 $734,936 
Other675 836 
Total short-term borrowings$446,175 $735,772 
Long-term debt2,976,573 2,942,513 
Total debt3,422,748 3,678,285 
Less: Cash and cash equivalents(285,777)(380,868)
Net debt3,136,971 3,297,417 
Add: Stockholders' equity4,662,105 4,286,366 
Net capitalization$7,799,076 $7,583,783 
Net debt to net capitalization40.2 %43.5 %

Our net debt to net capitalization ratio increaseddecreased to 45.4%40.2% at SeptemberJune 30, 20222023 compared to 39.5%43.5% at December 31, 2021.2022. Net debt increased $586.6decreased $160.4 million during the periodperiod primarily due to an increasea decrease in commercial paper borrowings, used to fund our accelerated share repurchase transactionpartially offset by lower cash and acquisition of Malema. Stockholders' equity decreased $198.1 million primarilycash equivalents. Stockholders' equity increased for the period as a result of share repurchases, dividends paidcurrent earnings of $470.8 million and unfavorableother comprehensive earnings of $38.7 million, primarily due to the favorable impact of foreign currency on accumulated other comprehensive loss,fluctuations, partially offset by net earnings during the period.$141.5 million of dividends paid.

Operating cash flow existing capacity of our Credit Agreement, and access to capital markets are expected to satisfy our various cash flow requirements, including acquisitions, capital expenditures, purchase obligations, and lease obligations, andobligations. Acquisition spending and/or share repurchases.repurchases could potentially increase our debt.

We believe that existing sources of liquidity are adequate to meet anticipated funding needs at current risk-based interest rates for the foreseeable future.

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statementscondensed 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 are consistently applied. We review valuations based on estimates for reasonableness on a consistent basis.

Recent Accounting Standards

See Note 1918 — Recent Accounting Pronouncements in the Condensed Consolidated Financial Statementscondensed consolidated financial statements in Item 1 of this Form 10-Q. The adoption of recent accounting standards as included in Note 1918 — Recent Accounting Pronouncements in the Condensed Consolidated Financial Statementscondensed 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 NotesNote Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, especially MD&A, contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995.1995, as amended. 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", "continue", "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, and assumptions, and other factors, some of which are beyondincluding those described in our Annual Report on Form 10-K for the Company’s control.year ended December 31, 2022. Factors that could cause actual results to differ materially from current expectations include, among other things,things: general economic conditions and conditions in the particular markets in which we operate; supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics; the impacts of COVID-19 or other future pandemics on the global economy and on our customers, suppliers, employees, business and cash flows, supply chain constraints and labor shortages that could result in production stoppages, inflation in material input costs and freight logistics, other general economic conditions and conditions in the particular markets in which we operate,flows; changes in customer demand and capital spending,spending; competitive factors and pricing pressures,pressures; our ability to develop and launch new products in a cost-
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effective manner,cost-effective manner; changes in law, including the effect of tax laws and developments with respect to trade policy and tariffs,tariffs; our ability to identify and complete acquisitions and integrate and realize synergies from newly acquired businesses,businesses; the impact of interest rate and currency exchange rate fluctuations,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,acquisitions; our ability to derive expected benefits from restructuring,restructurings, productivity initiatives and other cost reduction actions, changes in material costs or the supply of input materials,actions; the impact of legal compliance risks and litigation, including with respect to product quality and safety, cybersecurity and privacy,privacy; and 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, 2021.2022. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.otherwise, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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

Non-GAAP Disclosures

In an effort to provide investors with additional information regarding our results as determined by GAAP, we also disclose non-GAAP information, which we believe provides useful information to investors. Free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of net earnings, net debt, net capitalization, net debt to net capitalization ratio, adjusted working capital, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for cash flows from operating activities, debt or equity, working capital or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
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 provides a meaningful measure of liquidity by showing changes caused by operational results. 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.

Reconciliations ofand comparisons to non-GAAP measures can be found above in this Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in our exposure to market risk during the ninesix months ended SeptemberJune 30, 2022.2023. 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, 2021.2022.

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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 SeptemberJune 30, 2022.2023.

During the thirdsecond quarter of 2022,2023, 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.


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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

See Note 13 — Commitments and Contingent Liabilities in the Condensed Consolidated Financial Statementscondensed consolidated financial statements in Item 1 of this Form 10-Q.

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, 2021.2022.

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

a.Not applicable.

b.Not applicable.

c.The table below presents shares of Dover stock that we acquired during the quarter.
PeriodTotal Number of Shares PurchasedAverage Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased under the Plans or Programs (1)
July 1 to July 31— $— — 19,175,621 
August 1 to August 31— — — 19,175,621 
September 1 to September 303,201,025 124.96 (2)3,201,025 15,974,596 
For the Third Quarter3,201,025 $124.96 3,201,025 15,974,596 
(1)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. The Company repurchased 3,201,025 sharesNo share repurchases were made under the November 2020 authorization during the three months ended SeptemberJune 30, 2022.2023. As of SeptemberJune 30, 2022,2023, the number of shares still available for repurchase under the November 2020 share repurchase authorization was 15,974,596.
(2) On August 31, 2022, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Bank of America N.A. (“Bank of America”) pursuant to which it will repurchase $500.0 million of shares (the “ASR Program”). The Company is conducting the ASR Program under the November 2020 share repurchase authorization. The Company funded the ASR Program with commercial paper. Under the terms of the ASR Agreement, the Company paid Bank of America $500.0 million on September 1, 2022 and on that date received initial deliveries of 3,201,025 shares, representing a substantial majority of the shares expected to be retired over the course of the ASR Agreement. The total number of shares ultimately repurchased under the ASR Agreement will be based on the daily volume-weighted average share price of Dover's common stock during the calculation period of the ASR Program, less a discount. The ASR Program is scheduled to be completed in the fourth quarter of 2022, subject to postponement or acceleration under the terms of the ASR Agreement. The actual number of shares repurchased will be determined at the completion of the ASR Program.15,283,326.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

Not applicable.None.
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Item 6. Exhibits
31.1
31.2
32
101 The following materials from Dover Corporation’s Quarterly Report on Form 10-Q for the quarter ended SeptemberJune 30, 20222023 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.





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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:October 20, 2022July 25, 2023/s/ Brad M. Cerepak 
 Brad M. Cerepak
 Senior Vice President & Chief Financial Officer
 (Principal Financial Officer)
  
Date:October 20, 2022July 25, 2023/s/ Ryan W. Paulson
 Ryan W. Paulson
 Vice President, Controller
 (Principal Accounting Officer)

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