DOV · Read the filing

ITEM 1A. RISK FACTORS

The risk factors discussed in this section should be considered together with information included elsewhere in this Form 10-K and should not be considered the only risks to which we are exposed. In general, we are subject to the same general risks and uncertainties that impact many other industrial companies such as general economic, industry and/or market conditions and growth rates; the impact of natural disasters and their effect on global markets; and changes in laws or accounting rules. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our businesses, including our results of operations, liquidity and financial condition.

Business and Operational Risks

•The COVID-19 pandemic has adversely impacted, and continues to pose risks to, our businesses, the nature and extent of which are highly uncertain and unpredictable.

The COVID-19 pandemic has disrupted the global economy and adversely impacted our businesses, including demand for our products across multiple end-markets as well as our supply chain and operations. While we have experienced sequentially improving activity in most markets and geographies, the public health situation, global response measures and corresponding impacts on various markets remain fluid and uncertain and may lead to sudden changes in trajectory and outlook. Accordingly, we are currently unable to quantify the full and long-term impact of the pandemic on our results of operations, financial position and cash flows.

We have taken and will continue to take steps to mitigate the risks of COVID-19 by working with our customers, employees, suppliers and other stakeholders. The emergence of new variants of COVID-19, evolving government plans around the world to institute vaccination mandates, including in the U.S., and limited availability of vaccines in various jurisdictions, create uncertainty that may impact our employees and result in labor shortages and unforeseen costs. We cannot predict the potential for operating at reduced capacity or the size of the workforce that may be impacted by potential labor actions such as furloughs or layoffs. In addition, the uncertain recovery in demand has had business impacts, including increased material cost inflation (principally steel), labor availability issues and logistics costs increases. Some of our businesses have also been impacted from supplier component input availability issues.

The extent to which our operations may be impacted by COVID-19 will depend on future developments that are highly uncertain, including the pandemic's duration, the emergence of different COVID-19 variants, the efficacy and adoption rates of vaccines, the availability of oral medicines and actions by governments and private enterprises to contain the outbreak or mitigate the impact of the pandemic. For example, applicable laws and government measures, such as U.S. federal vaccine mandates or Occupational Safety and Health Administration requirements for vaccination or regular testing, could also result in skilled labor impacts including voluntary attrition or difficulty finding labor or otherwise adversely affect our ability to operate our facilities, obtain materials and component inputs from suppliers or deliver our products in a timely manner.

Furthermore, the pandemic has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. Due to the continuing uncertainties surrounding the pandemic, we are unable to determine the impact that it will have on our financial position, operating results and cash flows in future periods.

•Recessions, adverse market conditions or downturns in the markets we serve could adversely affect our operations.

In the past, our operations have been exposed to volatility due to changes in general economic conditions or consumer preferences, recessions or adverse conditions in the markets we serve. In the future, similar changes could adversely impact overall sales, operating results (including potential impairment charges for goodwill or other long-lived assets) and cash flows. Moreover, during economic downturns we may undertake more extensive restructuring actions, including workforce reductions, global facility consolidations, centralization of certain business support activities, and other cost reduction initiatives, and incur higher costs. As these plans and actions can be complex, the anticipated operational improvements, efficiencies and other benefits might be delayed or not realized. We are unable to determine

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the impact that recessions, adverse market conditions or downturns will have on our financial position, operating results and cash flows in future periods.

•Increases in labor costs, potential labor disputes and work stoppages or an inability to hire skilled personnel could adversely affect our business.

We have a number of collective bargaining units in the U.S. and various collective labor arrangements outside the U.S. We are subject to potential work stoppages, union and works council campaigns and other labor disputes, any of which could adversely impact our productivity, reputation, results of operations, financial condition and cash flows.

Furthermore, the competition for skilled personnel is often intense in the regions in which our manufacturing facilities are located. A sustained labor shortage or increased turnover rates within our employee base, increases in the salaries and wages paid by competing employers, as a result of general macroeconomic factors or otherwise, could lead to increased costs, such as increased overtime to meet demand and potentially further increase salaries and wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing facilities and overall business. If we are unable to hire and retain employees capable of performing at a high level, our business, financial condition and results of operations could be adversely affected.

•Our reputation, ability to do business and results of operations may be impaired by improper conduct by any of our employees, agents, or business partners.

While we strive to maintain high standards, we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees, agents, or business partners that would violate the laws of the jurisdictions where we do business, including the laws governing payments to government officials, bribery, fraud, anti-kickback and false claims, competition, export and import compliance, environmental compliance, money laundering and data privacy, as well as the improper use of proprietary information or social media. Any such violations of law or improper actions could: subject us to civil or criminal investigations; lead to substantial civil or criminal, monetary and non-monetary penalties and related shareholder lawsuits; lead to increased costs of compliance; and damage our reputation, our consolidated results of operations, financial condition and cash flows.

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•We are subject to risks relating to our existing international operations and expansion into new geographical markets.

Approximately 43% and 46% of our revenues for 2022 and 2021, respectively, were derived outside the United States and we expect international sales to continue to represent a significant portion of our revenues given our global growth strategy. As a result of our international operations and our global expansion strategy, we are subject to various risks, including:

o political, social and economic instability and disruptions;

o limitations on ownership and dividend of earnings;

o transportation delays and interruptions;

o risk to theft of proprietary information and/or intellectual property;

o labor unrest and current and changing regulatory environments;

o widespread public health crises, such as a pandemic or epidemic;

o the impact of loss of a single-source manufacturing facility;

o difficulties in staffing and managing multi-national operations;

o limitations on our ability to enforce legal rights and remedies;

o potentially adverse tax consequences; and

If we are unable to successfully manage the risks associated with expanding our global business or adequately manage operational risks of our existing international operations, the risks could have a material adverse effect on our growth in geographic markets, our reputation, our consolidated results of operations, financial position and cash flows.

•Our operations, businesses and products are subject to cybersecurity risks.

We depend on our own and third party IT systems, including cloud-based systems and managed service providers, to store, process and protect our information and support our business activities. We also use third party IT systems to support employee data processing for our global workforce and to support customer business activities, such as transmitting payment information, providing mobile monitoring services, and capturing operational data. Additionally, some of our products contain computer hardware and software and offer the ability to connect to computer networks. Increasingly, our customers, including government customers, are requiring cybersecurity protections and mandating cybersecurity standards for our products. Our business has both an increasing reliance on IT systems and an increasing digital footprint as a result of changing technologies, connected devices and digital offerings, as well as expanded remote work policies. If these technologies, systems, products or services are damaged, cease to function properly, are compromised due to employee or third-party contractor error, user error, malfeasance, system errors, or other vulnerabilities, or are subject to cybersecurity attacks, such as those involving denial of service attacks, unauthorized access, malicious software, or other intrusions, including by criminals, nation states or insiders, our business may be adversely impacted. The impacts could include production downtimes, operational delays, and other impacts on our operations and ability to provide products and services to our customers; compromise of confidential, proprietary or otherwise protected information, including personal information and customer confidential data; destruction, corruption, or theft of data or intellectual property; manipulation, disruption, or improper use of these technologies, systems, products or services; financial losses from fraudulent transactions, remedial actions, loss of business or potential liability; adverse media coverage; and legal claims or legal proceedings, including regulatory investigations, actions and fines; and damage to our reputation. There has been a rise in the number of cyberattacks targeting confidential business information generally and in the manufacturing industry specifically, as well as an increase in cyberattacks targeting managed service providers, by both state-sponsored and criminal organizations. Moreover, there has been a rise in the number of

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cyberattacks that depend on human error or manipulation, including phishing attacks or schemes that use social engineering to gain access to systems or perpetuate wire transfer or other frauds.

These trends increase the likelihood of such events occurring as well as the costs associated with protecting against such attacks. It is possible for vulnerabilities in our IT systems to remain undetected for an extended period of time up to and including several years. We attempt to mitigate these risks by employing a number of measures, including employee training, systems monitoring and other technical security controls, a breach response plan, maintenance of backup and protective systems, and security personnel. Notwithstanding those measures, our systems, networks, products and services remain potentially vulnerable to known or unknown cybersecurity attacks and other threats, any of which could have a material adverse effect on our consolidated results of operations, financial condition and cash flows. We, and the service providers that we depend on to support our systems and business operations, are regularly the target of, and periodically respond to, cyberattacks, including phishing and denial-of-service attacks, and must continuously monitor and develop our systems to protect our technology infrastructure and data from misappropriation or corruption. In addition, a cybersecurity attack could persist for an extended period of time before being detected, and, following detection, it could take considerable time for us to obtain full and reliable information about the extent, amount and type of information compromised. During the course of an investigation, we may not know the full impact of the event and how to remediate it, and actions, decisions and mistakes that are taken or made may further increase the negative effects of the event on our business, results of operations and reputation. While we maintain insurance coverage that is intended to address certain aspects of cybersecurity risks, such insurance coverage may not cover all losses or all types of claims that arise. As cyber threats continue to evolve, cybersecurity and data protection laws and regulations continue to develop in the U.S. and globally, and our business continues to move towards increased online connectivity within our information systems and through more Internet-enabled products and offerings, we expect to expend additional resources to continue to build out our compliance programs, strengthen our information security, data protection and business continuity measures, and investigate and remediate vulnerabilities.

•Unforeseen developments in contingencies such as litigation and product recalls could adversely affect our consolidated results of operations, financial condition and cash flows.

We and certain of our subsidiaries are, and from time to time may become, parties to a number of legal proceedings incidental to our businesses, including alleged injuries arising out of the use of products or exposure to hazardous substances, or claims related to patent infringement, employment matters and commercial disputes. The defense of these lawsuits may require significant expenses and divert management's attention, and we may be required to pay damages that could adversely affect our consolidated results of operations, financial condition and cash flows. In addition, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against potential loss exposures.

We may be exposed to product recalls and adverse public relations if our products are alleged to have defects, to cause property damage, to cause injury or illness, or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures, which would reduce operating profit and cash flow. In addition, a product recall may require significant management attention. Product recalls may hurt the value of our brands and lead to decreased demand for our products. Product recalls also may lead to increased scrutiny by federal, state or international regulatory agencies of our operations and increased litigation and could have a material adverse effect on our consolidated results of operations, financial condition and cash flows.

•Our revenue, operating profits and cash flows could be adversely affected if our businesses are unable to protect or obtain patent and other intellectual property rights.

Our businesses own patents, trademarks, licenses and other forms of intellectual property related to their products and continuously invest in research and development that may result in innovations and general intellectual property rights. Our businesses employ various measures to develop, maintain and protect their intellectual property rights. These measures may not be effective in capturing intellectual property rights, and they may not prevent their intellectual property from being challenged, invalidated, or circumvented, particularly in countries where intellectual property rights are not highly developed or protected. Unauthorized use of our businesses' intellectual property rights could adversely impact the competitive position of our businesses and could have a negative impact on our consolidated results of operations, financial condition and cash flows.

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•We could be negatively impacted by environmental, social and governance (ESG) and sustainability matters.

Governments, shareholders, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving and growing. We have announced certain initiatives, including goals, regarding our focus areas, which include greenhouse gas emissions reductions, health and safety, diversity and inclusion, talent attraction and development, and innovation for sustainable products. The criteria by which our ESG practices are assessed may change due to the evolution of the sustainability landscape, which could result in greater expectations of us and may cause us to undertake costly initiatives to satisfy new criteria. Moreover, the increasing attention to sustainability could also result in reduced demand for certain of our products or services and/or reduced profits. If we are unable to respond effectively, investors may conclude that our policies and/or actions with respect to ESG matters are inadequate. If we fail or are perceived to have failed to achieve previously announced initiatives or goals or to accurately disclose our progress on such initiatives or goals, our reputation, business, financial condition and results of operations could be adversely impacted.

Industry Risks

•Increasing product, service and price competition by international and domestic competitors, including new entrants, and our inability to introduce new and competitive products could cause our businesses to generate lower revenue, operating profits and cash flows.

Our competitive environment is complex because of the wide diversity of the products that our businesses manufacture and the markets they serve. In general, most of our businesses compete with only a few companies. Our ability to compete effectively depends on how successfully we anticipate and respond to various competitive factors, including new products, digital solutions and support services that may be introduced by competitors, changes in customer preferences, evolving regulations, new business models and technologies and pricing pressures. If our businesses are unable to anticipate their competitors' developments or identify customer needs and preferences on a timely basis, successfully introduce new products, digital solutions and support services in response to such competitive factors, or adopt to market changes relating to climate change related policies, they could lose customers to competitors. If our businesses do not compete effectively, we may experience lower revenue, operating profits and cash flows.

•Our operating results depend in part on the timely development and commercialization, and customer acceptance, of new and enhanced products, digital solutions and support services based on technological innovation.

The success of new and improved products, digital solutions and support services depends on their initial and continued acceptance by our customers. Certain of our businesses sell in markets that are characterized by rapid technological changes, frequent new product introductions, changing industry standards and corresponding shifts in customer demand, which may result in unpredictable product transitions, shortened life cycles and increased importance of being first to market. Failure to correctly identify and predict customer needs and preferences, to deliver high quality, innovative and competitive products to the market, to adequately protect our intellectual property rights or to acquire rights to third-party technologies, to provide adequate data security and privacy protections and to stimulate customer demand for, and convince customers to adopt new products, digital solutions and support services could adversely affect our consolidated results of operations, financial condition and cash flows. In addition, we may experience difficulties or delays in the research, development, production or marketing of new products, digital solutions and support services which may prevent us from recouping or realizing a return on the investments required to continue to bring new products and services to market.

•We could lose customers or generate lower revenue, operating profits and cash flows if there are significant increases in the cost of our raw materials or components, or if suppliers are not able to meet our quality and delivery requirements.

We purchase raw materials, sub-assemblies and components for use in our manufacturing operations. Factors such as freight costs, transportation availability, inventory levels, the level of imports, the imposition of duties, tariffs and other trade barriers and general economic conditions may affect the price of these raw materials, sub-assemblies and components. Significant price increases for certain commodities, other raw materials or components could adversely affect operating profits of our businesses. While we generally attempt to mitigate the impact of increased raw material prices by hedging or passing along the increased costs to customers, there may be a time delay between the increased raw

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material prices and the ability to increase the prices of products, or we may be unable to increase the prices of products due to a competitor's pricing pressure or other factors.

We use a wide range of raw materials and components in our manufacturing operations that come from numerous suppliers. While we believe that sources of supply for raw materials and components are generally adequate, it is difficult to predict what effects of extended lead times or shortages may have in the future. In addition, some of the raw materials and components may be available only from limited or single source suppliers. If a single source or limited source supplier were to cease or interrupt production for any reason or otherwise fail to supply those raw materials or components to us on favorable purchase terms, including at favorable prices, in sufficient quantities and with adequate lead times needed for efficient manufacturing, our ability to meet customer commitments, and satisfy market demands for affected products could be negatively affected. The disruption of our global supply chain for any reason, including for issues such as COVID-19 or other health epidemics or pandemics, labor disputes, loss of single source or limited source supplier, inability to procure sufficient raw materials, quality control issues, ethical sourcing issues, a supplier's financial distress, natural disasters, looting, vandalism or acts of war or terrorism, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on our business operations, financial condition and results of operations.

Legal and Regulatory Risks

•Our businesses are subject to regulation and their profitability and reputation could be adversely affected by domestic and foreign governmental and public policy changes, risks associated with emerging markets, changes in statutory tax rates and unanticipated outcomes with respect to tax audits.

Our businesses' domestic and international sales and operations must comply with a wide variety of laws, regulations and policies (including environmental, employment and health and safety regulations, data security laws, data privacy laws, export/import laws, tax policies such as export subsidy programs and research and experimentation credits, carbon emission regulations, energy efficiency and design regulations and other similar programs). These laws, regulations and policies are complex, change frequently, have tended to become more stringent over time and may be inconsistent across jurisdictions. Failure to comply (or any alleged or perceived failure to comply) with any of the foregoing could result in civil and criminal, monetary and non-monetary penalties as well as potential damage to our reputation and disruption to our business. We cannot provide assurance that our costs of complying with new and evolving regulatory reporting requirements and current or future laws will not exceed our estimates. Any of these factors could adversely affect customer demand, our relationships with customers and suppliers, and our business and financial position.

Certain of our businesses have sales or operations in countries, including Brazil, India and China, and may in the future invest in other countries, any of which may carry high levels of currency, political, compliance, or economic risk. While these risks or the impact of these risks are difficult to predict, any one or more of them could adversely affect our businesses and reputation.

Our effective tax rate is impacted by the mix of earnings among countries with differing statutory tax rates, changes in the valuation allowance of deferred tax assets and changes in income tax laws. The amount of income taxes and other taxes paid can be adversely impacted by changes in statutory tax rates and laws and are subject to ongoing audits by governmental authorities. If these audits result in assessments different from amounts estimated, then our consolidated results of operations, financial position and cash flows may be adversely affected by unfavorable tax adjustments.

Financial and Strategic Risks

•Our exposure to exchange rate fluctuations on cross-border transactions and the translation of local currency results into U.S. dollars could negatively impact our results of operations.

We conduct business through our subsidiaries in many different countries, and fluctuations in currency exchange rates could have a significant impact on our reported consolidated results of operations, financial condition and cash flows, which are presented in U.S. dollars. Cross-border transactions, both with external parties and intercompany relationships, result in increased exposure to foreign exchange effects. Accordingly, significant changes in currency exchange rates, particularly the euro, Chinese renminbi (yuan), Swedish krona, pound sterling, Indian rupee, Singapore dollar, Danish krone, and Canadian dollar, could cause fluctuations in the reported results of our businesses' operations that could

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negatively affect our results of operations. Additionally, the strengthening of certain currencies such as the euro and U.S. dollar potentially exposes us to competitive threats from lower cost producers in other countries. Our sales are translated into U.S. dollars for reporting purposes. The strengthening of the U.S. dollar could result in unfavorable translation effects as the results of foreign locations are translated into U.S. dollars.

•Our growth and results of operations may be adversely affected if we are unsuccessful in our capital allocation and acquisition program.

We expect to continue our strategy of seeking to acquire value creating add-on businesses that broaden our existing position and global reach as well as, in the right circumstances, strategically pursue larger acquisitions that could have the potential to either complement our existing businesses or allow us to pursue a new platform. However, there can be no assurance that we will be able to continue to find suitable businesses to purchase, that we will be able to acquire such businesses on acceptable terms, or that all closing conditions will be satisfied with respect to any pending acquisition. In addition, we face the risk that a completed acquisition may underperform relative to expectations. We may not achieve the synergies originally anticipated, may become exposed to unexpected liabilities or may not be able to sufficiently integrate completed acquisitions into our current business and growth model. Further, if we fail to allocate our capital appropriately, in respect of either our acquisition program or organic growth in our operations, we could be overexposed in certain markets and geographies and unable to expand into adjacent products or markets. These factors could potentially have an adverse impact on our consolidated results of operations, financial condition and cash flows.

•The indemnification provisions of acquisition and disposition agreements by which we have acquired or sold or disposed of companies may not fully protect us and may result in unexpected liabilities.

Certain of the acquisition agreements by which we have acquired companies require the former owners to indemnify us against certain liabilities related to the operation of those companies before we acquired them. In most of these agreements, however, the liability of the former owners is limited and certain former owners may be unable to meet their indemnification responsibilities. Similarly, the purchasers of our disposed operations may from time to time agree to indemnify us for operations of such businesses after the closing. We cannot be assured that any of these indemnification provisions will fully protect us, and as a result we may face unexpected liabilities that adversely affect our consolidated results of operations, financial condition and cash flows. In addition, we have retained certain liabilities directly or through indemnifications made to the buyers of businesses we have sold or disposed against known and unknown contingent liabilities such as tax liabilities and environmental matters.

There can be no assurance that the indemnity agreements will be sufficient to protect us against the full amount of any liabilities that may arise, or that the indemnitors will be able to fully satisfy their indemnification obligations. The failure to receive amounts for which we are entitled to indemnification could adversely affect our results of operations, cash flows and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2. PROPERTIES

The number, type, location and size of the properties used by our operations as of December 31, 2022 are shown in the following charts, by segment:

Number and nature of facilities Square footage (in 000s)

Manufacturing Warehouse Sales / Service Total Owned Leased

Locations Expiration dates of leased facilities (in years)

North America Europe Asia Other Total Minimum Maximum

Our owned and leased facilities are well-maintained and suitable for our operations.

ITEM 3. LEGAL PROCEEDINGS

See Note 16 — Commitments and Contingent Liabilities in the Consolidated Financial Statements in Item 8 of this Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS

All of our officers are elected annually at the first meeting of the Board of Directors following our annual meeting of shareholders, and are subject to removal at any time by the Board of Directors. Our executive officers as of February 10, 2023, and their positions with Dover (and, where relevant, prior business experience) for the past five years, are as follows:

Name Age Positions Held and Prior Business Experience

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Dividends

The principal market in which Dover common stock is traded is the New York Stock Exchange.

Holders

As of January 31, 2023, there were 1,218 holders of record of Dover common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

Information relating to securities authorized for issuance under our equity compensation plans is contained in Part III, Item 12 of this Form 10-K.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

In November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby we 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. Upon expiration of the February 2018 share repurchase authorization, there were 7,380,879 shares remaining.

During 2022, the Company received a total of 3,892,295 shares upon completion of the accelerated share repurchase agreement (the "ASR Agreement") for $500 million. The total number of shares ultimately repurchased under the ASR Agreement was based on the volume-weighted average share price of Dover's common stock during the calculation period of the ASR Agreement, less a discount, which was $128.46 over the term of the ASR Agreement.

During the year ended December 31, 2022, the company repurchased, exclusive of the ASR Agreement, 641,428 shares of its common stock for a total cost of $85 million, or $132.52 per share. Exclusive of the ASR Agreement, no share repurchases were made under the November 2020 authorization during the three months ended December 31, 2022. As of December 31, 2022, 15,283,326 shares remain authorized for repurchase under the November 2020 share repurchase authorization.

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Performance Graph

This performance graph does not constitute soliciting material, is not deemed filed with the Securities and Exchange Commission ("SEC"), and is not incorporated by reference in any of our filings under the Securities Act of 1933 or the Exchange Act of 1934, whether made before or after the date of this Form 10-K and irrespective of any general incorporation language in any such filing, except to the extent we specifically incorporate this performance graph by reference therein.

Comparison of Five-Year Cumulative Total Return +

Dover Corporation, S&P 500 Index, S&P 500 Industrials Index

Total Shareholder Returns

Data Source: Research Data Group, Inc.

_______________________

+Total return assumes reinvestment of dividends.

This graph assumes $100 invested on December 31, 2017 in Dover common stock, the S&P 500 Index and the S&P 500 Industrials Index.

ITEM 6. [RESERVED]

Not required.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand our results of operations and financial condition for the years ended December 31, 2022, 2021 and 2020. The MD&A should be read in conjunction with our Consolidated Financial Statements and Notes included in Item 8 of this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed elsewhere in this Form 10-K, particularly in Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" preceding Part I of this Form 10-K.

Throughout this MD&A, we refer to measures used by management to evaluate performance, 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 7 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. Reconciliations within this MD&A provide more details on the use and derivation of these measures.

OVERVIEW

Dover Corporation is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions and support services.

For the year ended December 31, 2022, consolidated revenue was $8.5 billion, an increase of $0.6 billion or 7.6%, as compared to the prior year. This growth included organic revenue growth of 8.8% driven by solid underlying demand and our ability to produce and ship despite supply chain constraints and ongoing labor availability issues, as well as 4.2% acquisition-related growth, partially offset by an unfavorable impact from foreign currency translation of 3.9% and 1.5% impact from dispositions. Overall, customer pricing favorably impacted revenue by approximately 6.9% for the year compared to 2.8% in the prior year.

Within our Engineered Products segment, revenue increased $262.8 million, or 14.8%, from the prior year, reflecting a broad-based organic revenue growth of 16.8% and acquisition-related growth of 0.7%, partially offset by an unfavorable foreign currency translation of 2.7%. The organic revenue growth was primarily driven by robust demand in our key end-markets, most notably in our vehicle service and industrial automation businesses, along with strategic pricing initiatives that more than offset significant inflationary cost headwinds in this segment.

Our Clean Energy & Fueling segment revenue increased $230.4 million, or 14.0%, from prior year, reflecting acquisition-related growth of 18.1%, partially offset by an unfavorable impact from foreign currency translation of 3.8% and an organic decline of 0.3%. The organic revenue decline was primarily driven by reduced year-over-year demand in above ground retail fueling driven by customer construction delays in North America, roll-off of EMV-related demand and overall caution among operators in Europe and Asia as a result of the weakening macroeconomic environment.

Our Imaging & Identification segment revenue decreased $39.6 million, or 3.4%, from the prior year, comprised of an unfavorable impact from foreign currency translation of 6.5%, partially offset by organic growth of 2.9% and acquisition-related growth of 0.2%. The organic revenue growth was primarily driven by solid activity in our marking and coding business, as underlying demand for our printers, spare parts, services and consumables remained positive.

Our Pumps & Process Solutions segment revenue increased $19.6 million, or 1.1%, from the prior year, attributable to an organic growth of 4.1% and acquisition-related growth of 1.3%, partially offset by an unfavorable impact from foreign currency translation of 4.3%. The organic revenue growth was principally 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 which all grew revenue driven by solid end market demand and strong backlogs.

Our Climate & Sustainability Technologies segment revenue increased $129.5 million, or 8.1%, from the prior year, reflecting an organic revenue growth of 18.5%, offset by a disposition-related decline of 7.5% and an unfavorable impact

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from foreign currency translation of 2.9%. The organic growth was driven by robust demand across all of our end-markets, along with strategic pricing initiatives that more than offset inflationary cost headwinds. Our beverage packaging equipment, heat exchanger, and retail refrigeration businesses all experienced broad-based growth from prior year.

From a geographic perspective, organic revenue for the U.S., our largest market, grew 9.5%, while revenue in Europe, Asia, and Other Americas grew 11.7%, 7.2%, and 6.9%, respectively. All other geographic markets declined 11.3% organically year over year. Three of our five segments had increased sales in North America, Europe, Asia, and Latin America as global demand continued to improve from easing of COVID-19 restrictions since the prior year.

Gross profit was $3.1 billion for the year ended December 31, 2022, an increase of $93.8 million, or 3.2%, as compared to the prior year. The increase was primarily due to pricing initiatives, which started in 2021, organic revenue growth, and favorable product mix, partially offset by increased material and logistics costs. Gross profit margin decreased to 36.0% for the year ended December 31, 2022 compared to 37.6% for the prior year. For further discussion related to our consolidated and segment results, see "Consolidated Results of Operations" and "Segment Results of Operations," respectively, within MD&A.

Bookings decreased 11.1% over the prior year to $8.3 billion for the year ended December 31, 2022. This included an organic bookings decline of 10.0%, an unfavorable impact due to foreign currency translation of 3.1% and a 1.5% decline due to dispositions, partially offset by an increase of 3.5% in acquisition-related bookings. Bookings decreased organically across four of our five segments, driven primarily by the easing of supply chain disruptions resulting in normalization of order to delivery lead-times to pre-pandemic levels for most of our segments. Overall, our book-to-bill decreased from the prior year to 0.98. Backlog as of December 31, 2022 was $3.0 billion, down from $3.2 billion in the prior year.Backlog as of December 31, 2022 included $1.1 billion, $0.7 billion, $0.7 billion, $0.3 billion, and $0.2 billion in the Climate & Sustainability Technologies, Engineered Products, Pumps & Process Solutions, Clean Energy & Fueling, and Imaging & Identification segments, respectively. Backlog remains elevated compared to historical levels and is expected to decrease due to normalizing lead-times and return to historical order patterns. See definition of bookings, organic bookings, book-to-bill and backlog within "Segment Results of Operations."

During the year ended December 31, 2022, we executed restructuring and other costs programs to further optimize operations. Restructuring and other costs of $39.0 million included restructuring charges of $30.5 million and other costs of $8.5 million. The expenses were primarily due to headcount reductions and facility consolidations resulting from restructuring programs initiated in 2021 and 2022, as well as non-cash foreign currency translation losses due to substantial liquidation of businesses from certain Latin America countries in our Climate & Sustainability Technologies segment.

During the year ended December 31, 2022, we made a total of three business acquisitions totaling $312.9 million, net of cash acquired and subject to contingent consideration. See Note 3 — Acquisitions in the Consolidated Financial Statements in Item 8 of this Form 10-K for further details regarding the businesses acquired during the year.

During the year ended December 31, 2022, the Company purchased, exclusive of the ASR Agreement, 641,428 shares of its common stock for a total cost of $85 million, or $132.52 per share. As of December 31, 2022, 15,283,326 shares remain authorized for repurchase under the November 2020 share repurchase authorization. For the 67th consecutive year, we increased our annual dividend per share and paid a total of $287.6 million in dividends to our shareholders in 2022.

COVID-19

The COVID-19 outbreak and associated counter-acting measures implemented by governments and businesses around the world, as well as subsequent accelerated and robust 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.

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While activity in most of the end markets we serve has improved since 2020, the demand in certain businesses such as textile printing, industrial winch and bearings and compression components is expected to take longer to recover to pre-pandemic levels, although continued improvement is expected in 2023. The uncertain recovery in demand has had business impacts, including increased material cost inflation (principally steel), labor availability issues and logistics costs increases. Some of our businesses have also been impacted by supplier component input availability issues. We cannot predict the ultimate impact from the COVID-19 pandemic and associated countermeasures on customer demand, our logistics costs, suppliers or the labor market.

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

Years Ended December 31, % / Point Change

Net earnings per common share - diluted $ 7.42 $ 7.74 $ 4.70 (4.1) % 64.7 %

*nm: not meaningful

Revenue

For the year ended December 31, 2022, revenue increased $0.6 billion, or 7.6% to $8.5 billion compared with 2021, reflecting organic growth of 8.8% driven by solid underlying demand and our ability to produce and ship despite supply chain constraints and ongoing labor availability issues. Acquisition-related growth increased by 4.2% led by our Clean Energy & Fueling segment, offset by an unfavorable foreign currency translation impact of 3.9% and disposition-related decline of 1.5%. Overall, customer pricing favorably impacted revenue by 6.9% for the year ended December 31, 2022.

For the year ended December 31, 2021, revenue increased $1.2 billion, or 18.3% to $7.9 billion compared with 2020, reflecting an organic growth of 15.3%, driven by strong demand across all our segments reflecting robust macro-trends. Acquisition-related growth increased by 1.3% led by our Clean Energy & Fueling and Imaging & Identification segments, partially offset by a 0.2% decrease from dispositions mainly due to the sale of our Unified Brands ("UB") business within Climate & Sustainability Technologies segment. Revenue also increased due to favorable foreign currency translation impact of 1.9%. Overall, customer pricing favorably impacted revenue by 2.8% for the year ended December 31, 2021.

Gross Profit

For the year ended December 31, 2022, gross profit increased $93.8 million, or 3.2%, to $3.1 billion compared with 2021, primarily due to organic revenue growth, partially offset by increased material and logistics costs. Gross profit margin decreased 160 basis points to 36.0% as compared to the prior year reflecting a shift in operating mix driven by biopharma and subdued above ground retail fueling performance returning to historical levels, partially offset by growth in CO2 refrigeration systems and engineered products.

For the year ended December 31, 2021, gross profit increased $495.8 million, or 20.0% to $3.0 billion compared with 2020, primarily due to organic revenue growth, benefits from pricing and productivity initiatives and restructuring actions, partially offset by increased material, labor and logistics costs as well as production inefficiencies caused by component and labor availability constraints. Gross profit margin increased 60 basis points to 37.6% as compared to the prior year due to benefits from pricing and product mix, productivity and restructuring actions.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the year ended December 31, 2022, decreased $4.1 million, or 0.2% to $1.7 billion compared with 2021, primarily due to lower variable compensation expense, partially offset by higher travel and marketing expenses. As a percentage of revenue, selling, general and administrative expenses decreased 160 basis points to 19.8%, reflecting an increase in the revenue base.

Selling, general and administrative expenses for the year ended December 31, 2021, increased $147.2 million, or 9.6% to $1.7 billion compared with 2020, due to higher labor and acquisition-related costs and lower discretionary spend in the prior year partially offset by lower restructuring costs of $11.8 million. As a percentage of revenue, selling, general and administrative expenses decreased 170 basis points in 2021 to 21.4%, reflecting an increase in the revenue base.

Research and development costs, including qualifying engineering costs, are expensed when incurred and amounted to $163.3 million, $157.8 million and $142.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. These costs as a percent of revenue were 1.9%, 2.0% and 2.1% for the years December 31, 2022, 2021 and 2020, respectively.

Non-Operating Items

Interest Expense, net

For the year ended December 31, 2022, interest expense, net of interest income, increased $10.1 million, or 10.0%, to $112.0 million compared with 2021 primarily due to increased commercial paper borrowings and higher average interest rates since the prior year.

For the year ended December 31, 2021, interest expense, net of interest income, decreased $6.5 million, or 6.0%, to $101.9 million compared with 2020 primarily due to borrowings against our unsecured revolving credit facility and commercial paper in 2020 to ensure liquidity during height of pandemic-related impacts.

Gain on Dispositions

There was one immaterial disposition in 2022.

On December 1, 2021, we completed the sale of UB, a wholly owned subsidiary of Dover. We recognized a total consideration of $229.0 million. This sale resulted in a pre-tax gain on disposition of $181.6 million included within the consolidated statements of earnings and within the Climate & Sustainability Technologies segment for the year ended December 31, 2021. The sale did not represent a strategic shift that had a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation. Additionally, included in this line item was a $24.7 million gain related to the disposition of our equity method investment in Race Winning Brands ("RWB") during the year ended December 31, 2021.

Refer to Note 4 — Dispositions in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional information on disposed and discontinued operations.

Other Income, net

For the years ended December 31, 2022, 2021 and 2020, other income, net was $20.2 million, $14.9 million and $11.9 million, respectively. For the year ended December 31, 2022, other income increased compared to 2021 primarily due to increased earnings from our equity method investments, partially offset by deferred compensation plan investment losses resulting from market volatility in 2022. For the year ended December 31, 2021, other income increased compared to 2020 primarily due to transition services in connection with our sale of UB, certain non-income tax credits, and investment income, partially offset by a $12.1 million other than temporary impairment charge related to an equity method investment in 2021.

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Income Taxes

Our businesses have a global presence with 43%, 40% and 45% of our pre-tax earnings in 2022, 2021 and 2020, respectively, generated in foreign jurisdictions. Foreign earnings are generally subject to local country tax rates that differ from the 21.0% U.S. statutory tax rate. Our effective foreign tax rate is typically lower than the U.S. statutory tax rate.

Our effective tax rate was 17.3% for the year ended December 31, 2022, compared to 19.8% and 18.8% for the years ended December 31, 2021 and December 31, 2020, respectively. The 2022 rate was primarily driven by favorable audit resolutions, including a reduction to income taxes previously recorded related to the Tax Cut and Jobs Act, and the 2021 and 2020 rates were primarily driven by favorable audit resolutions and the tax benefit of share award exercises.

See Note 14 — Income Taxes in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional details.

Net Earnings

For the year ended December 31, 2022, net earnings decreased $58.4 million, or 5.2%, to $1,065.4 million, or $7.42 per share, compared with net earnings of $1,123.8 million, or $7.74 per share, for the year ended December 31, 2021. Earnings decreased due to the prior year earnings being favorably impacted by the gains on disposition of UB and our equity method investment in RWB compared to one immaterial disposition in 2022. Excluding these gains, earnings increased due to pricing initiatives, which started in 2021, organic revenue growth, and favorable product mix, partially offset by increased material, logistics and labor costs.

For the year ended December 31, 2021, net earnings increased $440.4 million, or 64.4%, to $1,123.8 million, or $7.74 per share, compared with net earnings of $683.5 million, or $4.70 per share, for the year ended December 31, 2020. Earnings increased due to organic revenue growth, favorable pricing actions and product mix and productivity actions including benefits of restructuring actions. Additionally, earnings were favorably impacted by the gains on disposition of UB and our equity method investment in RWB. These benefits more than offset increases in material and logistics costs, most notably steel and ocean and air freight costs, higher labor costs as well as productivity shortfalls resulting from labor constraints and supply chain disruption.

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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. During the year ended December 31, 2022, the segment measure of profit and loss, used by the Company's Chief Operating Decision Maker to evaluate our operating segment performance, 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. Segment earnings is defined as earnings before purchase accounting expenses, restructuring and other costs, loss (gain) on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes. Accordingly, we have updated our segment earnings for the years ended December 31, 2021 and 2020 to conform to the new presentation. Refer to Note 19 — Segment Information in the Consolidated Financial Statements in Item 8 of this Form 10-K and see "Non-GAAP Disclosures" at the end of this Item 7 for further details.

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. The 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.

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Engineered Products

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

Years Ended December 31, % Change

Operational metrics:

Components of revenue growth:

Acquisitions 0.7 % 0.6 %

Foreign currency translation (2.7) % 1.6 %

Total revenue growth 14.8 % 16.3 %

2022 Versus 2021

Engineered Products segment revenue for the year ended December 31, 2022 increased $262.8 million, or 14.8% compared to the prior year, comprised of a broad-based organic revenue growth of 16.8% and acquisition-related growth of 0.7%, partially offset by an unfavorable foreign currency translation of 2.7%. Overall, customer pricing favorably impacted revenue by approximately 10.4% in 2022 compared to 4.2% in the prior year.

The organic revenue growth was primarily driven by robust demand across all of our key end-markets, most notably in our vehicle service, waste handling, industrial automation, aerospace and defense, and industrial winch and hoist businesses, along with strategic pricing initiatives that more than offset inflationary cost headwinds. Despite the strong organic growth, shipments continued to be challenged by supply chain constraints, most notably in our waste handling business. We expect organic growth rates in 2023 to remain strong, but at levels below the growth we saw in 2022.

Engineered Products segment earnings for the year ended December 31, 2022 increased $68.7 million, or 24.7%, compared to the prior year. Segment margin increased to 17.0% from 15.6% in the prior year driven by increased volumes, customer pricing actions, and productivity gains, partially offset by higher material, labor and logistics costs as well as an unfavorable impact from foreign currency translation.

Bookings for the year ended December 31, 2022 decreased 5.2% compared to the prior year, comprised primarily of organic decline of 4.7% and an unfavorable impact from foreign currency translation of 1.8%, offset by acquisition-related growth of 1.3%. The organic bookings decline was driven primarily by the easing of supply chain disruptions resulting in shortened order to delivery lead-times and customers returning to more traditional order patterns, most notably in our vehicle service business. Segment book-to-bill was 0.98. Backlog decreased 8.3% compared to the prior year.

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2021 Versus 2020

Engineered Products segment revenue for the year ended December 31, 2021 increased $249.6 million, or 16.3% compared to the prior year, comprised of a broad-based organic revenue growth of 14.1%, a favorable foreign currency translation of 1.6%, and acquisition-related growth of 0.6%. Overall, customer pricing favorably impacted revenue by approximately 4.2% in 2021.

The organic revenue growth was primarily driven by robust demand across all of our key end-markets, most notably in our vehicle service and industrial automation businesses, and strategic pricing initiatives that partially offset inflationary headwinds. Despite the strong organic growth and record high backlog levels, certain shipments in our waste handling and vehicle service groups were deferred to future quarters as a result of supply chain and labor availability constraints with the most significant impact in the fourth quarter of 2021.

Engineered Products segment earnings for the year ended December 31, 2021 increased $12.7 million, or 4.8%, compared to the prior year. The increase was primarily driven by conversion on increased volumes, benefits from restructuring actions, and favorable impact from foreign currency translation, partially offset by higher material and logistics costs, most notably steel and ocean and air freight costs, as well as plant productivity shortfalls resulting from supply chain disruption and higher labor costs. Segment margin decreased from 17.3% to 15.6% as compared to the prior year.

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Clean Energy & Fueling

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

Years Ended December 31, % Change

Operational metrics:

Components of revenue growth (decline):

Organic growth (decline) (0.3) % 5.8 %

Foreign currency translation (3.8) % 2.2 %

Total revenue growth 14.0 % 11.6 %

2022 Versus 2021

Clean Energy & Fueling segment revenue for the year ended December 31, 2022 increased $230.4 million, or 14.0%, compared to the prior year, attributable to acquisition-related growth of 18.1%, partially offset by an unfavorable impact from foreign currency translation of 3.8% and an organic decline of 0.3%. Acquisition-related growth was driven by the acquisition of RegO, Acme Cryogenics and LIQAL, which were completed in 2021. Overall, customer pricing favorably impacted revenue by approximately 6.0% in 2022 compared to 2.3% in the prior year.

The organic revenue decline was primarily driven by reduced year-over-year demand in above ground retail fueling driven by customer construction delays in North America, roll-off of EMV-related demand and overall caution among operators in Europe and Asia as a result of the weakening macroeconomic environment. This was mostly 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. 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. We expect organic growth rates to remain restrained in the early part of 2023, but show improvement as we move through 2023.

Clean Energy & Fueling segment earnings for the year ended December 31, 2022 increased $25.8 million, or 7.9%, compared to the prior year. The increase was primarily driven by pricing, productivity initiatives, cost actions in above ground fueling, and the favorable impact from acquisitions, which more than offset the unfavorable impact to earnings from foreign currency translation, reduced volumes in above ground retail fueling, and increased material, logistics and labor costs. Segment margin decreased to 18.8% from 19.9% in the prior year.

Bookings for the year ended December 31, 2022 increased 4.5% compared to the prior year, reflecting acquisition-related growth of 15.9%, partially offset by an organic decline of 8.8% and an unfavorable impact from foreign currency translation of 2.6%. The organic bookings decline was primarily driven by improving lead-times and return to historical order patterns

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throughout the segment, as well as the decrease in demand in above ground retail fueling. Segment book-to-bill was 0.97. Backlog decreased 18.6% as compared to the prior year.

2021 Versus 2020

Clean Energy & Fueling segment revenue for the year ended December 31, 2021 increased $171.9 million, or 11.6%, compared to the prior year, attributable to organic growth of 5.8%, acquisition-related growth of 3.6%, and a favorable impact from foreign currency translation of 2.2%. Acquisition-related growth was driven by the acquisition of ICS, AvaLAN and LIQAL. The acquisitions of RegO and Acme Cryogenics late in the fourth quarter had an immaterial impact to the segment's results. Overall, customer pricing favorably impacted revenue by approximately 2.3% in 2021.

The organic revenue growth was primarily driven by solid demand in our North America and EMEA retail fueling and vehicle wash businesses, along with pricing actions aimed at mitigating material, logistics and labor cost inflation. Growth in this segment was hampered by supply chain and labor availability challenges, both within our and our customers' operations, that intensified in the second half of the year, impacting our ability to ship some customer orders.

Clean Energy & Fueling segment earnings for the year ended December 31, 2021 increased $37.0 million, or 12.7%, compared to the prior year. The increase was primarily driven by conversion on organic revenue growth, pricing initiatives, productivity actions, and a favorable impact from acquisitions, partially offset by material and labor cost inflation. Segment margin increased to 19.9% from 19.7% in the prior year.

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Imaging & Identification

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

Years Ended December 31, % Change

Operational metrics:

Components of revenue growth (decline):

Organic growth 2.9 % 8.0 %

Acquisitions 0.2 % 1.3 %

Foreign currency translation (6.5) % 2.8 %

Total revenue growth (decline) (3.4) % 12.1 %

2022 Versus 2021

Imaging & Identification segment revenue for the year ended December 31, 2022 decreased $39.6 million, or 3.4% compared to the prior year, comprised of an unfavorable impact from foreign currency translation of 6.5%, partially offset by organic growth of 2.9% and acquisition-related growth of 0.2%. Overall, customer pricing favorably impacted revenue by approximately 4.1% in 2022 compared to 0.9% in the prior year.

The organic revenue growth was primarily driven by solid activity in our marking and coding business, as underlying demand for our printers, spare parts, services and consumables remains positive, along with the favorable impact from pricing actions aimed at mitigating material and logistics cost inflation. We also saw improvements in component availability as we moved through the second half of 2022. We expect demand in our marking and coding business to remain constructive in 2023. New textile printer sales remain impacted by high energy prices and macro uncertainty in textile producing regions.

Imaging & Identification segment earnings for the year ended December 31, 2022 increased $1.2 million, or 0.4%, compared to the prior year. This increase was driven by pricing initiatives, organic revenue growth, productivity actions, and product mix, partially offset by the unfavorable impact to earnings from foreign currency translation, and increased material, logistics and labor costs. As a result, segment margin increased to 23.9% from 22.9% in the prior year.

Segment bookings for the year ended December 31, 2022 decreased 3.0% compared to the prior year, reflecting an unfavorable impact from foreign currency translation of 5.8%, partially offset by organic growth of 2.6% and acquisition-related growth of 0.2%. The organic increase was primarily driven by solid demand for new equipment, spare parts, services and consumables in our marking and coding business. Segment book-to-bill was 1.03. Backlog increased 9.8% compared to the prior year.

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2021 Versus 2020

Imaging & Identification segment revenue for the year ended December 31, 2021 increased $125.2 million, or 12.1% compared to the prior year, comprised of organic growth of 8.0%, a favorable impact from foreign currency translation of 2.8%, and acquisition-related growth of 1.3%. Acquisition-related growth was driven by the acquisitions of Solaris in the third quarter of 2020 and Blue Bite in the second quarter of 2021. Overall, customer pricing favorably impacted revenue by approximately 0.9% in 2021.

The organic revenue growth was driven by both our marking and coding business, and our digital textile printing business. Our marking and coding business delivered solid growth in new equipment and associated services and consumables, as well as serialization software sales. Our digital textile printing business experienced demand recovery in 2021 compared to 2020 when demand for printed textiles was significantly reduced due to the impact of COVID-19 restrictions on the global apparel industry. While 2021 global apparel retail volumes improved from 2020, volumes had not yet returned to pre-pandemic levels and continue to be impacted by local business and travel restrictions, as well as work-from-home policies which resulted in reduced apparel demand.

Imaging & Identification segment earnings for the year ended December 31, 2021 increased $42.9 million, or 19.1%, compared to the prior year. This increase was driven by conversion on organic revenue growth, pricing initiatives and the benefits from productivity initiatives and restructuring actions, partially offset by material and labor cost inflation. As a result, segment margin increased to 22.9% from 21.6% in the prior year.

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Pumps & Process Solutions

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

Years Ended December 31, % Change

Operational metrics:

Components of revenue growth:

Organic growth 4.1 % 26.6 %

Acquisitions 1.3 % 0.6 %

Foreign currency translation (4.3) % 1.9 %

Total revenue growth 1.1 % 29.1 %

2022 Versus 2021

Pumps & Process Solutions segment revenue for the year ended December 31, 2022 increased $19.6 million, or 1.1%, compared to the prior year, attributable to organic growth of 4.1% and acquisition-related growth of 1.3%, partially offset by an unfavorable impact from foreign currency translation of 4.3%. Acquisition-related growth was driven by the acquisitions of AMN DPI and Malema in 2022. Overall, customer pricing favorably impacted revenue by approximately 3.9% in 2022 compared to 1.8% in the prior year.

The organic revenue growth was 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, which all grew revenue driven by solid end market demand and strong backlogs. Revenue from shipments of single-use pumps and connectors used in biopharmaceutical production processes declined in 2022, as biopharmaceutical manufacturers reduced orders for components used in COVID-19 vaccine production and repurposed inventory purchased for the COVID-19 vaccine production towards production of non-COVID-19 therapies. While underlying demand for non-COVID-19 related biologic therapies remains on a positive trajectory in the biopharmaceutical market, we expect our delivery volumes to remain muted in early 2023 as customers work through component inventories. Improvement in shipments is expected as we move through 2023 as customer component inventories normalize and growth in non-COVID-19 related bioproduction remains robust.

Pumps & Process Solutions segment earnings for the year ended December 31, 2022 decreased $42.6 million, or 7.4%, compared to the prior year. The decrease was primarily driven by the impact of reduced revenues relating to single use components used in COVID-19 vaccine production, along with material and labor cost inflation and 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 30.8% from 33.7% in the prior year.

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Bookings for the year ended December 31, 2022 decreased 15.5% compared to the prior year, reflecting an organic decline of 12.8% and an unfavorable impact from foreign currency translation of 3.8%, partially offset by acquisition-related growth of 1.1%. 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 0.99. Backlog decreased 0.4% compared to the prior year.

2021 Versus 2020

Pumps & Process Solutions segment revenue for the year ended December 31, 2021 increased $384.6 million, or 29.1%, compared to the prior year, attributable to organic growth of 26.6%, a favorable impact from foreign currency translation of 1.9%, and acquisition-related growth of 0.6%. Acquisition-related growth was primarily driven by the acquisition of Quantex and one other immaterial acquisition. Overall, customer pricing favorably impacted revenue by approximately 1.8% in 2021.

The organic revenue growth was primarily driven by robust demand in the biopharma and hygienic markets, where we saw strong demand for single use pumps and connectors used in biopharmaceutical production processes. Our industrial pumps and our plastics and polymer processing solutions businesses also contributed to top-line growth responding to strong end market demand, despite experiencing supply chain constraints and customer delivery challenges that accelerated in the second half of the year. Revenue in bearings and compression components saw solid growth amidst an ongoing recovery in their end market demand.

Pumps & Process Solutions segment earnings for the year ended December 31, 2021 increased $226.9 million, or 65.1%, compared to the prior year. This increase was predominantly the result of strong conversion on revenue growth, favorable product mix, pricing initiatives, and productivity actions, partially offset by material and labor cost inflation, and investments in growth. Segment margin increased to 33.7% from 26.3% in the prior year.

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Climate & Sustainability Technologies

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

Years Ended December 31, % Change

Operational metrics:

Components of revenue growth:

Dispositions (7.5) % (1.1) %

Foreign currency translation (2.9) % 1.3 %

Total revenue growth 8.1 % 22.2 %

2022 Versus 2021

Climate & Sustainability Technologies segment revenue for the year ended December 31, 2022 increased $129.5 million, or 8.1%, compared to the prior year, reflecting an organic revenue growth of 18.5%, offset by disposition-related decline of 7.5% and an unfavorable impact from foreign currency translation of 2.9%. Overall, customer pricing favorably impacted revenue by approximately 9.2% in 2022 compared to 4.1% in the prior year.

The organic revenue growth was principally driven by robust demand across all of our end-markets, along with pricing initiatives that more than offset inflationary cost headwinds. Beverage packaging equipment revenues increased substantially from prior year, driven by continued favorable macro trends in the global beverage industry, which include beverage innovations and producers increasingly shifting to highly recyclable aluminum cans for environmental sustainability and merchandising benefits offered by modern aluminum containers. Our heat exchanger business experienced strong 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. Retail refrigeration experienced broad-based growth, driven by increased remodel activity with key supermarket customers and growing demand for our environmentally friendly natural refrigerant systems in both Europe and the U.S. We expect organic growth rates in 2023 to remain strong, but at levels below the growth we saw in 2022.

Climate & Sustainability Technologies segment earnings for the year ended December 31, 2022 increased $69.0 million, or 37.2%, compared to the prior year. Segment margin increased to 14.6% from 11.5% in the prior year driven by increased volumes, favorable business mix and customer pricing actions, partially offset by increased material and logistics costs, most notably metals and freight, increased energy and labor costs, and plant productivity shortfalls resulting from supply chain disruption.

Bookings for the year ended December 31, 2022 decreased 28.4% compared to the prior year, reflecting organic decline of 19.7%, a disposition-related decline of 6.1%, and an unfavorable impact from foreign currency translation of 2.6%. The organic bookings decline includes a $74.0 million reversal of an order slated for 2023 completion in our beverage can-

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making business due to customer financing limitations, along with the easing of supply chain disruption, resulting in improved order to delivery lead-times and a return to more traditional customer order patterns, most notably in retail refrigeration. Segment book-to-bill was 0.96. Backlog decreased 9.0% over the prior year, principally driven by our aluminum can-making equipment business.

2021 Versus 2020

Climate & Sustainability Technologies segment revenue for the year ended December 31, 2021 increased $292.1 million, or 22.2%, compared to the prior year, reflecting an organic revenue growth of 22.0% and a favorable impact from foreign currency translation of 1.3%, partially offset by a disposition-related decline of 1.1%. Overall, customer pricing favorably impacted revenue by approximately 4.1% in 2021.

The organic revenue growth was principally driven by robust demand across all of our end-markets. Beverage packaging equipment revenues increased substantially from prior year, driven by continued favorable macro trends in the global beverage industry, which include beverage innovations and producers increasingly shifting to highly recyclable aluminum cans for environmental sustainability and merchandising benefits offered by modern aluminum cans. Our heat exchanger business experienced strong 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. Retail refrigeration experienced broad-based growth, driven by increased remodel activity with key supermarket customers and growing demand for our environmentally friendly natural refrigerant systems in both Europe and the U.S. Prior to the sale of UB in the fourth quarter of 2021, commercial foodservice equipment revenues improved over the prior year, as many key restaurant chain customers resumed store investment programs once government mandated COVID-19 restrictions eased in 2021.

Climate & Sustainability Technologies segment earnings for the year ended December 31, 2021 increased $59.4 million, or 47.1%, compared to the prior year. Segment margin increased to 11.5% from 9.6% in the prior year due to increased volumes, favorable mix, improved operational efficiencies and benefits from prior restructuring programs; partially offset by increased material and logistics costs, most notably metals, and plant productivity shortfalls resulting from supply chain disruption, most notably from intermittent shortages of insulation foam materials throughout the year, and labor availability constraints, most significantly in our retail refrigeration business.

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Reconciliation of Segment Earnings to Net Earnings

Years Ended December 31,

Net earnings:

Segment earnings:

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

(2) Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, exit costs, and other asset charges.

(3) Loss (gain) 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 deal-related expenses, executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services overhead costs 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. During the year ended December 31, 2022, restructuring charges of $30.5 million were primarily due to headcount reductions and facility consolidations resulting from restructuring programs initiated in 2021 and 2022, including non-cash foreign currency translation losses due to substantial liquidation of businesses. Other costs (benefits), net of $8.5 million, were primarily due to an asset impairment in our Engineered Products segment and write-off of assets in connection with an exit from certain Latin America countries in our Climate & Sustainability Technologies segment. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the consolidated statement of earnings. Additional programs beyond the scope of the announced programs may be implemented during 2023 with related restructuring charges.

We recorded the following restructuring and other costs for the year ended December 31, 2022:

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During the year ended December 31, 2021, restructuring and other activities included restructuring charges of $26.7 million and other (benefits) costs of $11.7 million. Restructuring expense was incurred in response to demand conditions, asset charges related to a product line exit, as well as broad-based operational efficiency initiatives focusing on footprint consolidation and IT centralization. Other (benefits) costs were comprised primarily of $12.1 million other than temporary impairment charge related to an equity method investment and a $6.1 million write-off of assets in connection with an exit from certain Latin America countries in our Climate & Sustainability Technologies segment, offset by 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 goods and services and $1.8 million within selling, general and administrative expenses) within our Engineering Products segment and $3.3 million of gains on sales of assets as a result of restructuring actions in our Pumps & Process Solutions segment. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the consolidated statement of earnings.

We recorded the following restructuring and other costs (benefits) for the year ended December 31, 2021:

During the year ended December 31, 2020, restructuring and other activities included restructuring charges of $44.5 million and other costs of $7.0 million. Restructuring expense was comprised primarily of new actions executed in response to lower demand driven by COVID-19 as well as continuing broad-based selling, general and administrative expense reduction initiatives and broad-based operational efficiency initiatives focusing on footprint consolidation, and operational optimization and IT centralization. Other costs were comprised primarily of charges related to the restructuring actions and asset charges, principally due to a $3.6 million write off of assets, partially offset by a $1.7 million gain on sale of assets in our Climate & Sustainability Technologies segment. These restructuring and other charges were recorded in cost of goods and services and selling, general and administrative expenses in the consolidated statement of earnings.

We recorded the following restructuring and other costs for the year ended December 31, 2020:

See Note 11 — Restructuring Activities in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional details regarding our recent restructuring activities.

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Purchase Accounting Expenses

Purchase accounting expenses primarily relate to amortization of acquired 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:

Years Ended December 31,

Purchase accounting expenses

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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, repurchase 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 consolidated statements of cash flows:

Years Ended December 31,

Net cash flows provided by (used in):

Operating Activities

Cash provided by operating activities for the year ended December 31, 2022 decreased compared to 2021. This decrease was primarily driven by higher investments in working capital to support business growth and higher compensation payouts. Additionally, estimated tax payments increased from 2021 to 2022, including a $43.5 million income tax payment in 2022 related to the gain on sale of Unified Brands in Q4 2021 and a $13.4 million tax payment in 2022 related to an internal reorganization.

Cash provided by operating activities for the year ended December 31, 2021 increased compared to 2020. This increase was primarily driven higher earnings net of non-cash adjustments and increases to accrued expenses, partially offset by our investment in working capital of $307.1 million.

Pension and Other Post-Retirement Activity: Total cash used in conjunction with pension plans during 2022 was $12.9 million, including contributions to our international pension plans and payments of benefits under our non-qualified supplemental pension plans.

The funded status of our U.S. qualified defined benefit pension plan is dependent upon many factors, including returns on invested assets, the level of market interest rates and the level of funding. We contribute cash to our plans at our discretion, subject to applicable regulations and minimum contribution requirements. Due to the overfunded status of this plan, the Company did not make contributions in 2022, 2021 or 2020 and does not expect to make contributions in the near term.

Our international pension plans are located in regions where often it is not economically advantageous to pre-fund the plans due to local regulations. Total cash payments, which include contributions and direct benefit payments to nonfunded plans, to ongoing international defined benefit pension plans in 2022, 2021 and 2020 totaled $9.1 million, $8.1 million and $7.3 million, respectively. In 2023, we expect to make cash payments of approximately $7.1 million related to our non-U.S. plans.

Our non-qualified supplemental pension plans are funded through Company assets as benefits are paid. In 2022, 2021 and 2020 a total of $3.8 million, $6.3 million, and $12.3 million in benefits were paid under these plans, respectively. See Note 17 — Employee Benefit Plans in the Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion regarding our post-retirement plans. In 2023, we expect to make cash payments of approximately $7.4 million to our non-qualified U.S. plans.

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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 increased from December 31, 2021 by $350.3 million, or 23.9%, to $1.8 billion at December 31, 2022, which reflected an increase in accounts receivable of $169.4 million, an increase in inventory of $175.5 million and a decrease in accounts payable of $5.4 million. These amounts include the effects of acquisitions and foreign currency translation. Overall, working capital was higher in 2022 primarily due to increases in accounts receivable on timing of order shipments and higher balances of raw materials and components inventory. We carried elevated levels of working capital in 2022 due to high customer demand and to ensure supply of inputs due to supply chain dislocations. With supply chains improving in the second half of 2022, we began reducing inventory balances, and continue to focus on improving working capital management.

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.

Outstanding payments related to SCF programs are recorded within accounts payable in our consolidated balance sheets. As of December 31, 2022 and 2021, amounts due to financial institutions for suppliers using SCF were approximately $156.3 million and $211.0 million, respectively. SCF related payments are classified as a reduction to cash flows from operations. Amounts paid to SCF financial institutions were approximately $882.5 million during the year ended December 31, 2022, $825.0 million during the year ended December 31, 2021, and $605.0 million during the year ended December 31, 2020.

Investing Activities

Cash flow from investing activities is derived from cash outflows for capital expenditures and acquisitions, partially offset by cash inflows from proceeds from the sale of businesses, and property, plant and equipment. The majority of the activity in investing activities was comprised of the following:

•Acquisitions: In 2022, we deployed $312.9 million, to acquire three businesses. In comparison, we acquired nine businesses in 2021 for an aggregate purchase price of approximately $1,112.1 million, excluding contingent consideration of up to $13.0 million. Total acquisition spend in 2020 was $335.8 million and was comprised of six businesses. See Note 3 — Acquisitions in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional information with respect to recent acquisitions.

•Proceeds from sale of businesses: In 2022, we had one immaterial disposition. Cash proceeds of $275.0 million in 2021 was due to the sale of UB within the Climate & Sustainability Technologies segment and the sale of our RWB equity method investment within the Engineered Products segment. In 2020, we generated cash proceeds of $15.4 million due to the sale of AMS Chino.

•Capital spending: Capital expenditures, primarily to support growth initiatives, productivity and new product launches, were $221.0 million in 2022, $171.5 million in 2021 and $165.7 million in 2020. Our capital expenditures

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increased $49.5 million and $5.8 million in 2022 and 2021, respectively, in line with our plan to support growth capacity, digitization, innovation, and productivity.

We anticipate that capital expenditures and any additional acquisitions we make in 2023 will be funded from available cash and internally generated funds and, if necessary, through the issuance of commercial paper, or by accessing the public debt or equity markets. We estimate capital expenditures in 2023 to range from $185.0 million to $195.0 million.

Financing Activities

Our cash flow from financing activities generally relates to the use of cash for purchases of our common stock and payment of dividends, offset by net borrowing activity. The majority of financing activity was attributed to the following:

•Repurchase of common stock, including accelerated share repurchase program: During 2022, the Company received a total of 3,892,295 shares upon completion of the accelerated share repurchase agreement (the "ASR Agreement") for $500 million. The total number of shares ultimately repurchased under the ASR Agreement was based on the volume-weighted average share price of Dover's common stock during the calculation period of the ASR Agreement, less a discount, which was $128.46 over the term of the ASR Agreement. During the year ended December 31, 2022, we repurchased, exclusive of the ASR Agreement, 641,428 shares of common stock at a total cost of $85 million. During the year ended December 31, 2021, we repurchased 182,951 shares of common stock at a total cost of $21.6 million. During the year ended December 31, 2020, we repurchased 979,165 shares of common stock at a total cost of $106.3 million.

•Commercial paper and other short-term borrowings, net: During 2022, we received net proceeds of $629.9 million from commercial paper and other short-term borrowings, primarily used to fund our accelerated share repurchase transaction and to fund a portion of our acquisitions. During 2021, we received net proceeds of $105.0 million from commercial paper borrowings to fund a portion of our acquisitions. During 2020, we used $84.7 millionto pay off commercial paper borrowings.

•Dividend payments: Total dividend payments to common shareholders were $287.6 million in 2022, $286.9 million in 2021 and $284.3 million in 2020. Our dividends paid per common share increased 1% to $2.01 per share in 2022 compared to $1.99 per share in 2021, which represents the 67th consecutive year that our dividend per share has increased. The number of common shares outstanding decreased from 2021 to 2022 as share repurchases exceeded share issuances.

•Payments to settle employee tax obligations: Payments to settle tax obligations on share exercises were $14.6 million, $41.9 million and $28.5 million in 2022, 2021 and 2020, respectively. The decrease from 2021 to 2022 is primarily due to the decrease in the number of shares exercised and a decrease in the average stock price compared to the prior year.

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 consolidated statements of cash flows, we also measure free cash flow (a non-GAAP measure) which represents net cash provided by operating activities minus capital expenditures. We believe that free cash flow is an important measure of liquidity because it provides management and investors a measurement of cash generated from operations that may be available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

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The following table reconciles our free cash flow to cash flow provided by operating activities:

Years Ended December 31,

Free cash flow as a percentage of revenue 6.9 % 11.9 % 14.1 %

Free cash flow as a percentage of net earnings 54.9 % 84.0 % 137.4 %

For 2022, we generated free cash flow of $584.8 million, representing 6.9% of revenue and 54.9% of net earnings. Free cash flow in 2021 was $944.4 million, or 11.9% of revenue and 84.0% of earnings. Free cash flow in 2020 was $939.1 million, or 14.1% of revenue and 137.4% of earnings. Free cash flow decreased from 2021 to 2022 due to lower operating cash flow and increased capital expenditures compared to the prior year. The decrease in operating cash flow was primarily a result of investments in working capital to support business growth and higher compensation payouts compared to the prior year. Additionally, the year ended December 31, 2022 includes a $43.5 million income tax payment related to the gain on sale of Unified Brands in the fourth quarter of 2021 and a $13.4 million tax payment in 2022 related to an internal reorganization. The 2021 increase in free cash flow compared to 2020 reflects higher cash flow provided by operations, partially offset by higher investments in capital expenditures compared to the prior year.

Capitalization

We use commercial paper borrowings for general corporate purposes, including the funding of acquisitions and the repurchase of our common stock. As of December 31, 2022, we maintained a $1 billion five-year unsecured revolving credit facility (the "Credit Agreement") with a syndicate of banks, which expires on October 4, 2024. This facility is used primarily as liquidity back-up for Dover's commercial paper program and for general corporate purposes.

The Company may elect to have loans under the Credit Agreement which bear interest at a base rate plus a specified applicable margin. Under this facility, we are required to pay a facility fee and to maintain an interest coverage ratio of consolidated EBITDA to consolidated net interest expense of not less than 3.0 to 1. We were in compliance with this covenant and our other long-term debt covenants at December 31, 2022 and had a coverage ratio of 15.3 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 material long-term debt maturity is in 2025.

We also have a current shelf registration statement filed with the SEC 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 December 31, 2022, our cash and cash equivalents totaled $380.9 million, of which approximately $261.4 million was held outside the United States. At December 31, 2021, our cash and cash equivalents totaled $385.5 million, of which $257.5 million was held outside the United 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 in bank deposits or invest the funds in government money market instruments or short-term investments, which consist of investment grade time deposits with original maturity dates at the time of purchase of no greater than three months.

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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 reconciliation of net debt to net capitalization to the most directly comparable GAAP measures:

Net debt to net capitalization 43.5 % 39.5 % 43.4 %

Our net debt to net capitalization ratio increased to 43.5% at December 31, 2022 compared to 39.5% at December 31, 2021. Net debt increased $558.5 million primarily due to an increase in commercial paper borrowings used to fund our accelerated share repurchase transaction and a portion of our acquisitions during the year. Stockholders' equity increased for the period as a result of current earnings of $1,065.4 million, offset by $287.6 million of dividends paid, $585.0 million in share repurchases and a loss in accumulated other comprehensive income of $112.2 million, primarily due to the unfavorable impact of foreign currency fluctuations.

Our net debt to net capitalization ratio decreased to 39.5% at December 31, 2021 compared to 43.4% at December 31, 2020. The decrease in this ratio was driven primarily by the increase in stockholders' equity of $803.8 million for the period as a result of increase in current earnings of $1,123.8 million, offset by $286.9 million of dividends paid and $21.6 million in share repurchases. Net debt increased $143.2 million during the period primarily due to a decrease of $127.6 million in cash and cash equivalents and an increase in total debt as a result of an increase in commercial paper.

Our ability to obtain debt financing at comparable risk-based interest rates is partly a function of our existing cash flow-to-debt and debt-to-capitalization levels as well as our current credit standing. Set forth below are our credit ratings, as of December 31, 2022, which were independently developed by the respective credit agencies. The Moody's rating and outlook were issued in December 2018, and the Standard & Poor's rating was issued in December 2017 and the outlook was most recently revised in May 2021. The ratings and outlooks from both agencies were affirmed in 2022.

Short-Term Rating Long-Term Rating Outlook

Moody's P-2 Baa1 Stable

Standard & Poor's A-2 BBB+ Stable

As of December 31, 2022, we had approximately $180.3 million outstanding in letters of credit, surety bonds, and performance and other guarantees with financial institutions, which primarily expire on various dates through 2029. These letters of credit and bonds are primarily issued as security for insurance, warranty and other performance obligations. In general, we would only be liable for the amount of these guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote.

Our estimate of future interest payments on long-term debt is $1,038.0 million based on the interest rates in effect as of December 31, 2022.

Operating cash flow and access to capital markets are expected to satisfy our various cash flow requirements, including acquisitions, capital expenditures, purchase obligations, and lease obligations. See Note 7 — Leases in the Consolidated

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Financial Statements in Item 8 of this Form 10-K for additional details on lease obligations. Acquisition spending and/or share 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.

Financial Instruments and Risk Management

The diverse nature of our businesses' activities necessitates the management of various financial and market risks, including those related to changes in interest rates, foreign currency exchange rates and commodity prices. We periodically use derivative financial instruments to manage some of these risks. We do not hold or issue derivative instruments for trading or speculative purposes. We are exposed to credit loss in the event of nonperformance by counterparties to our financial instrument contracts; however, nonperformance by these counterparties is considered unlikely as our policy is to contract with highly-rated, diversified counterparties.

Interest Rate Exposure

As of December 31, 2022, and for the years ended December 31, 2022, 2021, and 2020, we did not have any open interest rate swap contracts; however, we may in the future enter into interest rate swap agreements to manage our exposure to interest rate changes. We issue commercial paper, which exposes us to changes in variable interest rates; however, maturities are typically three months or less so a change in rates over this period would not have a material impact on our pre-tax earnings.

We consider our current risk related to market fluctuations in interest rates to be minimal since our debt is largely long-term and fixed in nature. Generally, the fair market value of fixed-interest rate debt will increase as interest rates fall and decrease as interest rates rise. A 100 basis point increase in market interest rates would decrease the 2022 year-end fair value of our long-term debt by approximately $165.0 million. However, since we have no plans to repurchase our outstanding fixed-rate instruments before their maturities, the impact of market interest rate fluctuations on our long-term debt does not affect our results of operations or financial position.

Foreign Currency Exposure

We conduct business in various non-U.S. countries, including Canada, substantially all of the European countries, Mexico, Brazil, China, India and other Asian countries. Therefore, we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. We will occasionally use derivative financial instruments to offset such risks, when it is believed that the exposure will not be limited by our normal operating and financing activities. We have formal policies to mitigate risk in this area by using fair value and/or cash flow hedging programs.

Changes in the value of the currencies of the countries in which we operate affect our results of operations, financial position and cash flows when translated into U.S. dollars, our reporting currency. The strengthening of the U.S. dollar could result in unfavorable translation effects as the results of foreign operations are translated into U.S. dollars. We have generally accepted the exposure to exchange rate movements relative to our investment in non-U.S. operations. We may, from time to time, for a specific exposure, enter into fair value hedges.

Additionally, we have designated the €600 million and €500 million of euro-denominated notes issued November 9, 2016 and November 4, 2019, respectively, as a hedge of our net investment in euro-denominated operations. Due to the high degree of effectiveness between the hedging instruments and the exposure being hedged, fluctuations in the value of the euro-denominated debt due to exchange rate changes are offset by changes in the net investment. Accordingly, changes in the value of the euro-denominated debt are recognized in the cumulative translation adjustment section of other comprehensive income to offset changes in the value of the net investment in euro-denominated operations. Due to the fluctuations of the euro relative to the U.S. dollar, the U.S. dollar equivalent of this debt increases or decreases, resulting in the recognition of a pre-tax gain of $80.3 million, $94.0 million and loss of $119.3 million in other comprehensive income for the years ended December 31, 2022, 2021, and 2020 respectively.

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Commodity Price Exposure

Some of our businesses are exposed to volatility in the prices of certain commodities, such as aluminum, steel, copper and various precious metals, among others. Our primary exposure to commodity pricing volatility relates to the use of these materials in purchased component parts or the purchase of raw materials. Markets for multiple raw materials saw significant cost increases throughout 2021 and into 2022, which we partially offset through price increases and other levers. In some cases, we maintain longer-term index based contracts on raw materials and component parts and centrally drive an ongoing effort to minimize risk proactively. However, we are prone to exposure as these contracts expire.

Critical Accounting Estimates

Revenue Recognition

Description

The majority of our revenue is generated through the manufacture and sale of a broad range of specialized products and components, with revenue recognized upon transfer of title and risk of loss, which is generally upon shipment. In limited cases, our revenue arrangements with customers require delivery, installation, testing, certification, or other promises to deliver goods or services that may impact the timing or pattern of revenue recognized. The remainder of our revenue is recognized over time, which is primarily related to services performed and specialized goods manufactured.

Judgments and uncertainties involved in the estimate

A significant level of judgment is involved in the identification of performance obligations for contracts with multiple-element arrangements and the allocation of the transaction price based on the relative stand-alone selling price. The identification requires judgment to identify all distinct goods or services and also the appropriate timing of revenue recognition for each distinct good or service based on the transfer of control to the customer. We estimate the relative stand-alone selling price for performance obligations if not directly observable. A significant level of judgment is also involved in the selection of the appropriate method to recognize revenue over time.

Effect if actual results differ from assumptions

To the extent the judgments and estimates used or the method selected to recognize revenue over time differ or change in a future period, a change to revenue and the related assets and liabilities could impact our financial position or results of operations. The judgments, estimates, and methods used have been applied consistently over the last three fiscal years.

Valuation of Acquired Intangible Assets

Description

Intangible assets represent a significant portion of our consolidated balance sheet as a result of current and past acquisitions. Intangible assets primarily include customer intangibles, trademarks, unpatented technologies, and patents. The fair value of acquired intangible assets is determined using widely accepted valuation techniques, and the Company may engage third-party appraisal firms to assist with the determination of fair values of significant intangible assets. The valuation of intangible assets is performed at the time of acquisition and may change during the acquisition measurement period until the valuation is finalized. The fair value of finite-lived intangible assets is subsequently amortized over the estimated useful life.

Judgments and uncertainties involved in the estimate

The significant assumptions used in the valuation of customer intangibles include future cash flows, customer attrition rate, and discount rate. The significant assumptions for the valuation of trademarks include future revenues, royalty rate, and discount rate. The significant assumptions for the valuation of unpatented technologies and patents include future revenues, obsolescence rate, royalty rate, and discount rate. The assumptions and estimates used in the valuation of these intangible assets are based on several factors, including historical experience with similar businesses and industries and information obtained from operating company management.

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Effect if actual results differ from assumptions

While we believe the assumptions used in our valuation of intangible assets are reasonable and representative of expected results, actual results may differ from these assumptions. While the assumptions used for each acquisition are dependent on the acquired company, the assumptions have been applied using a consistent methodology over the last three fiscal years.

Goodwill Impairment

Description

Goodwill is the difference between the consideration transferred and the fair value of net assets acquired. Goodwill is tested for impairment on an annual basis during the fourth quarter, or more frequently when indicators of impairment exist, or when a change in the composition of reporting units for goodwill occurs for other reasons, such as a disposition or a change in segments. The impairment test involves a comparison of the fair value of each reporting unit with its carrying value. Fair value reflects the price a potential market participant would be willing to pay for the reporting unit in an arms-length transaction.

Judgments and uncertainties involved in the estimate

The significant assumptions in the fair value analysis of goodwill are the estimated future cash flows and the discount rate. The determination of future cash flows involves significant judgment and is primarily driven by forecasted revenue growth rates and EBITDA margins for the reporting unit. These assumptions are developed based on the reporting unit’s expected future performance, which considers historical performance. We use a discount rate commensurate with the inherent risks in our internally developed forecasts of future cash flows. The discount rate may also fluctuate due to market conditions such as rising interest rates.

Effect if actual results differ from assumptions

While we believe the assumptions used in our annual impairment analysis are reasonable and representative of expected results and reflective of a market participant, actual results may differ from these assumptions. The methodology used for the goodwill impairment test has remained consistent over the last three fiscal years.

Valuation of Pension Benefit Obligation

Description

The pension benefit obligation is actuarially determined in accordance with GAAP and is impacted by assumptions used to estimate the obligation, namely the discount rate. Annually, we review the actuarial assumptions used and compare the assumptions to third-party benchmarks to ensure that the selected assumptions accurately account for our future pension benefit obligations.

Judgments and uncertainties involved in the estimate

Our discount rate assumptions are determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans’ expected benefit payment streams. The plans’ expected cash flows are then discounted by the resulting year-by-year spot rates. The 2022 weighted-average discount rate used to measure our pension benefit obligations ranged from 3.57% to 5.55%, a general increase from the 2021 rates, which ranged from 1.18% to 2.95%, due to increased market interest rates over this period.

Effect if actual results differ from assumptions

A 25-basis point decrease in the discount rates used for these plans would have increased pension benefit obligations by approximately $15.6 million from the amount recorded at December 31, 2022. The methodology used for the valuation of the pension benefit obligation has remained consistent over the last three fiscal years.

Recoverability of Deferred Income Tax Assets and Unrecognized Tax Benefits

Description

We operate in and are subject to income taxes in various jurisdictions and are subject to ongoing audits by federal, state, and non-U.S. tax authorities. Significant judgment is required in determining the realizability of deferred tax assets and evaluating unrecognized tax benefits.

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We have significant amounts of deferred tax assets that are evaluated for recoverability and valued accordingly. Management evaluates the realizability of deferred income tax assets for each jurisdiction in which the Company operates. We record valuation allowances to reduce the carrying value of deferred tax assets to amounts that we expect are more likely than not to be realized.

The provision for unrecognized tax benefits provides a recognition threshold and measurement attribute for determining the financial statement tax benefits taken or expected to be taken in a tax return and disclosure requirements regarding uncertainties in income tax positions. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

Judgments and uncertainties involved in the estimate

In assessing the adequacy of a recorded valuation allowance, we consider all positive and negative evidence, including the scheduled reversal of deferred tax liabilities, historical and projected future taxable income, and tax planning strategies. Additionally, significant judgment is required in the identification and measurement of unrecognized tax benefits. Our liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various filing positions.

Effect if actual results differ from assumptions

Although we believe that our judgments and estimates are reasonable, actual results could differ and result in additional tax expense or benefit. If we determine a valuation allowance should be recognized to reduce the carrying value of a deferred tax asset or a liability for an unrecognized tax benefit needs to be recorded, the adjustment would result in a change to tax expense in the period such determination is made. We have not made any material changes in the process we use to assess valuation allowances and unrecognized tax benefits over the last three fiscal years.

Contingencies

Description

Liabilities are established for environmental and legal contingencies at both the business and corporate levels. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters.

Judgments and uncertainties involved in the estimate

The valuation of liabilities for these contingencies is reviewed on a quarterly basis to ensure that we have accrued the proper level of expense. The liability balances are adjusted to account for changes in circumstances for ongoing issues and the establishment of additional liabilities for emerging issues. Estimates used in the valuations include 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. Such liability balances contain uncertainties due to new developments regarding the facts and circumstances of each proceeding, changes in applicable laws and regulations, and other future events and decisions by third parties that may impact the ultimate resolution of a proceeding.

Effect if actual results differ from assumptions

Although we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations, and we may be exposed to a material loss. For example, to the extent we prevail in matters for which a liability has been established or are required to pay amounts in excess of our established liability, our contingent liability in a given financial statement period could be materially affected. However, the Company does not believe that it is 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.

Recent Accounting Standards

See Note 1 — Description of Business and Summary of Significant Accounting Policies in the Consolidated Financial Statements in Item 8 of this Form 10-K for a discussion of recent accounting pronouncements and recently adopted accounting standards.

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Non-GAAP Disclosures

In an effort to provide investors with additional information regarding our results as determined by GAAP, we also disclose non-GAAP information, which we believe provides useful information to investors. 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 and comparisons of GAAP to non-GAAP measures can be found above in this Item 7, MD&A.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this section is incorporated by reference to the section, "Financial Instruments and Risk Management", included within the MD&A in Item 7.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND

FINANCIAL STATEMENT SCHEDULE

Page

58 Management's Report on Internal Control Over Financial Reporting

59 Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

61 Consolidated Statements of Earnings

62 Consolidated Statements of Comprehensive Earnings

63 Consolidated Balance Sheets

64 Consolidated Statements of Stockholders' Equity

65 Consolidated Statements of Cash Flows

66 Notes to Consolidated Financial Statements

70 Note 2 - Revenue

73 Note 3 - Acquisitions

78 Note 4 - Dispositions

79 Note 5 - Inventories, net

79 Note 6 - Property, Plant and Equipment, net

79 Note 7 - Leases

81 Note 8 - Credit Losses

82 Note 9 - Goodwill and Other Intangible Assets

83 Note 10 - Accrued Expenses and Other Liabilities

84 Note 11 - Restructuring Activities

86 Note 12 - Borrowings

87 Note 13 - Financial Instruments

89 Note 14 - Income Taxes

92 Note 15 - Equity and Cash Incentive Program

95 Note 16 - Commitments and Contingent Liabilities

96 Note 17 - Employee Benefit Plans

102 Note 18 - Accumulated Other Comprehensive Earnings (Loss)

103 Note 19 - Segment Information

106 Note 20 - Earnings per Share

106 Note 21 - Shareholder's Equity

(All other schedules are not required and have been omitted)

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MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2022. In making this assessment, the Company's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).

Based on its assessment under the criteria set forth in Internal Control — Integrated Framework (2013), management concluded that, as of December 31, 2022, the Company's internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Dover Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Dover Corporation and its subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of earnings, of comprehensive earnings, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

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company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Test

As described in Notes 1 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $4.669 billion as of December 31, 2022. Management performs its goodwill impairment test annually in the fourth quarter, or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired, when some portion but not all of a reporting unit is disposed of or classified as held for sale, or when a change in the composition of reporting units occurs for other reasons. When performing the impairment test, management estimates the fair value of each reporting unit using the income-based valuation method, which involves significant judgment. Under the income-based valuation method, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. Management uses internal forecasts to estimate future cash flows, which are based on historical performance and future estimated results.

The principal considerations for our determination that performing procedures relating to the goodwill impairment test is a critical audit matter are there was significant judgment by management when developing the fair value measurement of each reporting unit, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures and in evaluating management’s estimate of fair value of the reporting units, specifically related to revenue growth in the estimated future cash flows. In addition, the nature and extent of audit effort required to address the matter was a consideration.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the determination of revenue growth in the estimated future cash flows. These procedures also included, among others, testing the appropriateness of the discounted cash flow model, assessing results of sensitivities over the assumptions in the discounted cash flow model, and testing the reasonableness of significant assumptions used by management, specifically revenue growth. When testing revenue growth, we evaluated whether the assumptions were reasonable by (i) understanding management’s process to develop the estimated future cash flows, (ii) comparing management’s forecasted revenue growth to current and prior period performance and (iii) comparing management’s forecasted revenue growth to external market and/or industry data.

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

We have served as the Company's auditor since 1995.

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DOVER CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share amounts)

Years Ended December 31,

Net earnings per share:

Weighted average shares outstanding:

See Notes to Consolidated Financial Statements

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DOVER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands)

Years Ended December 31,

Other comprehensive earnings (loss), net of tax

Foreign currency translation adjustments:

Reclassification of foreign currency translation losses to earnings 5,915 — —

Pension and other postretirement benefit plans:

Changes in fair value of cash flow hedges:

Net gains reclassified into earnings (3,732) (4,871) (632)

See Notes to Consolidated Financial Statements

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DOVER CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

ASSETS

Current assets:

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Stockholders' equity:

Preferred stock - $100 par value; 100,000 shares authorized; none issued — —

See Notes to Consolidated Financial Statements

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DOVER CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except per share amounts)

Stock-based compensation expense — 25,026 — — — 25,026

Other comprehensive earnings, net of tax — — — 62,772 — 62,772

Stock-based compensation expense — 31,111 — — — 31,111

Other comprehensive loss, net of tax — — — (798) — (798)

Stock-based compensation expense — 30,821 — — — 30,821

Other comprehensive loss, net of tax — — — (112,171) — (112,171)

See Notes to Consolidated Financial Statements

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DOVER CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Years Ended December 31,

Operating Activities:

Adjustments to reconcile net earnings to cash provided by operating activities:

Investing Activities:

Proceeds from sale of property, plant and equipment 6,061 7,070 7,207

Financing Activities:

Supplemental information - cash paid during the year for:

DOV US Equity

DOV · 10-K · period ended 2022-12-31

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DOV US Equity☆

DOV · 10-K · period ended 2022-12-31

ITEM 1A. RISK FACTORS

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. MINE SAFETY DISCLOSURES

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

DOV US Equity