Dover Reports Fourth Quarter And Full Year 2020 Results; Provides 2021 Guidance

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Jan 28, 2021, 06:30 ET

DOWNERS GROVE, Ill., Jan. 28, 2021 /PRNewswire/ -- Dover (NYSE: DOV), a diversified global manufacturer, announced its financial results for the fourth quarter and full year ended December 31, 2020.

	Three Months Ended December 31,						Twelve Months Ended December 31,
($ in millions, except per share data)	2020		2019		% Change		2020		2019		% Change
U.S. GAAP
Revenue	$	1,780	$	1,776	—	%	$	6,684	$	7,136	(6)	%
Net earnings¹	182		168		8	%	683		678		1	%
Diluted EPS	1.25		1.15		9	%	4.70		4.61		2	%

Non-GAAP
Organic revenue change					(2)	%					(7)	%
Adjusted net earnings ²	225		226		—	%	824		872		(5)	%
Adjusted diluted EPS	1.55		1.54		1	%	5.67		5.93		(4)	%

¹	Q4 2020 and 2019 net earnings include rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also includes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 net earnings include rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also includes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 includes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.

²	Q4 2020 and 2019 adjusted net earnings exclude after tax acquisition-related amortization costs of $26.3 million and $25.1 million, respectively, and rightsizing and other costs of $16.5 million and $14.2 million, respectively. Q4 2019 also excludes a $18.4 million loss on extinguishment of debt. Full year 2020 and 2019 adjusted net earnings exclude acquisition-related amortization costs of $104.1 million and $103.6 million, respectively, and rightsizing and other costs of $40.7 million and $25.4 million, respectively. Full year 2020 also excludes a $3.9 million non-cash gain on the sale of Chino, and full year 2019 excludes a $46.9 million non-cash loss on assets held for sale related to Finder as well as a $18.4 million loss on extinguishment of debt.

For the quarter ended December 31, 2020, Dover generated revenue of $1.8 billion, a slight increase compared to the fourth quarter of the prior year (-2% organic). GAAP net earnings of $182 million increased 8%, and GAAP diluted EPS of $1.25 was up 9%. On an adjusted basis, net earnings of $225 million declined slightly, and adjusted diluted EPS of $1.55 was up 1% versus the comparable quarter of the prior year.

For the full year ended December 31, 2020, Dover generated revenue of $6.7 billion, a decline of 6% compared to the prior year (-7% organic). GAAP net earnings of $683 million increased 1%, and GAAP diluted EPS of $4.70 increased 2% year-over-year. On an adjusted basis, net earnings of $824 million declined 5%, and adjusted diluted EPS of $5.67 was down 4% versus the prior year.

A full reconciliation between GAAP and adjusted measures and definitions of non-GAAP and other performance measures are included as an exhibit herein.

MANAGEMENT COMMENTARY:

Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Dover delivered solid results in the fourth quarter despite lingering economic and operational effects of the pandemic. Our efficiency and productivity initiatives drove improvement in segment margins and cash flow metrics despite lower revenue for the full year. We advanced our operational priorities with notable progress in the center-led digital, operational, and shared back office and engineering capabilities. These initiatives have contributed to our recent results and will continue to drive improvement ahead. Our strong execution was complemented by disciplined capital allocation, including several strategic bolt-on acquisitions that enhance our businesses with new capabilities and attractive end-market exposures.

"Improving market conditions coupled with a robust demand backlog enable us to look into 2021 with constructive optimism. With continued progress in our ongoing productivity and cost initiatives, we believe we are well-positioned to deliver robust top-line growth, margin expansion and EPS accretion in 2021. We also enter the year with a healthy balance sheet that will continue to support organic and inorganic capital deployment to continue enhancing our portfolio."

"We are pleased to have 2020 in the rear view mirror for all the obvious reasons. On behalf of Dover Corporation's Board of Directors, I would like to thank our entire team for their extraordinary efforts in the past 12 months. We were given a unique opportunity to demonstrate the resilience of the Dover team and our business portfolio in 2020, and we can all be proud of the results we achieved together."

FULL YEAR 2021 GUIDANCE:

In 2021, Dover expects to generate GAAP EPS in the range of $5.42 to $5.62 (adjusted EPS of $6.25 to $6.45), based on full year revenue growth of 8% to 10% (5% to 6% on an organic basis). A full reconciliation between forecasted GAAP and forecasted adjusted measures is included as an exhibit herein.

CONFERENCE CALL INFORMATION:

Dover will host a webcast and conference call to discuss its fourth quarter and full year 2020 results as well as 2021 guidance at 10:00 A.M. Eastern Time (9:00 A.M. Central Time) on Thursday, January 28, 2021. The webcast can be accessed on the Dover website at dovercorporation.com. The conference call will also be made available for replay on the website. Additional information on Dover's fourth quarter and full year results and its operating segments can be found on the Company's website.

ABOUT DOVER:

Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale with operational agility to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of over 23,000 employees takes an ownership mindset, collaborating with customers to redefine what's possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under "DOV." Additional information is available at dovercorporation.com.

FORWARD-LOOKING STATEMENTS:

This press release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements in this document other than statements of historical fact are statements that are, or could be deemed, "forward-looking" statements. Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control. Factors that could cause actual results to differ materially from current expectations include, among other things, the impacts of COVID-19, or other future pandemics, on the global economy and on our customers, suppliers, employees, business and cash flows, other general economic conditions and conditions in the particular markets in which we operate, changes in customer demand and capital spending, competitive factors and pricing pressures, our ability to develop and launch new products in a cost-effective manner, our ability to realize synergies from newly acquired businesses, and our ability to derive expected benefits from restructuring, productivity initiatives and other cost reduction actions. For details on the risks and uncertainties that could cause our results to differ materially from the forward-looking statements contained herein, we refer you to the documents we file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2019, and our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are available from the Securities and Exchange Commission, and on our website, dovercorporation.com. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

INVESTOR SUPPLEMENT - FOURTH QUARTER AND FULL YEAR 2020 DOVER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)(in thousands, except per share data)

	Three Months Ended December 31,				Years Ended December 31,
	2020		2019		2020		2019
Revenue	$	1,780,390	$	1,775,589	$	6,683,760	$	7,136,397
Cost of goods and services	1,128,941		1,124,274		4,209,741		4,515,459
Gross profit	651,449		651,315		2,474,019		2,620,938
Selling, general, and administrative expenses	405,520		403,223		1,541,032		1,599,098
Loss on assets held for sale	—		—		—		46,946
Operating earnings	245,929		248,092		932,987		974,894
Interest expense	28,234		30,846		111,937		125,818
Interest income	(700)		(1,428)		(3,571)		(4,526)
Gain on sale of a business	—		—		(5,213)		—
Loss on extinguishment of debt	—		23,543		—		23,543
Other income, net	(2,013)		(1,891)		(11,900)		(12,950)
Earnings before provision for income taxes	220,408		197,022		841,734		843,009
Provision for income taxes	38,302		28,900		158,283		165,091
Net earnings	$	182,106	$	168,122	$	683,451	$	677,918

Net earnings per share:
Basic	$	1.27	$	1.16	$	4.74	$	4.67
Diluted	$	1.25	$	1.15	$	4.70	$	4.61
Weighted average shares outstanding:
Basic	143,954		144,966		144,050		145,198
Diluted	145,355		146,790		145,393		146,992

Dividends paid per common share	$	0.50	$	0.49	$	1.97	$	1.94

* Per share data may be impacted by rounding.

DOVER CORPORATION QUARTERLY SEGMENT INFORMATION (unaudited)(in thousands)

	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
REVENUE
Engineered Products	$	408,160	$	342,380	$	386,562	$	394,175	$	1,531,277	$	418,851	$	429,928	$	426,689	$	422,089	$	1,697,557
Fueling Solutions	359,982		326,495		380,511		409,294		1,476,282		373,050		390,586		411,769		444,772		1,620,177
Imaging & Identification	256,765		227,977		265,690		287,746		1,038,178		268,354		266,588		275,109		274,420		1,084,471
Pumps & Process Solutions	319,536		309,095		347,875		347,497		1,324,003		330,219		338,924		341,337		328,048		1,338,528
Refrigeration & Food Equipment	311,913		293,527		368,395		342,255		1,316,090		334,643		385,474		370,335		306,165		1,396,617
Intra-segment eliminations	(417)		(299)		(777)		(577)		(2,070)		(360)		(794)		106		95		(953)
Total consolidated revenue	$	1,655,939	$	1,499,175	$	1,748,256	$	1,780,390	$	6,683,760	$	1,724,757	$	1,810,706	$	1,825,345	$	1,775,589	$	7,136,397

NET EARNINGS
Segment Earnings:
Engineered Products	$	69,094	$	47,702	$	64,890	$	56,481	$	238,167	$	67,119	$	77,129	$	74,367	$	73,233	$	291,848
Fueling Solutions	53,498		47,214		66,601		69,661		236,974		37,230		52,637		68,069		73,937		231,873
Imaging & Identification	51,482		38,046		51,928		52,017		193,473		55,955		54,641		61,655		57,233		229,484
Pumps & Process Solutions ¹	66,079		67,702		89,786		81,709		305,276		14,991		76,278		77,433		71,379		240,081
Refrigeration & Food Equipment ²	23,529		11,459		40,159		27,725		102,872		24,807		44,375		35,211		14,439		118,832
Total segment earnings (EBIT)	263,682		212,123		313,364		287,593		1,076,762		200,102		305,060		316,735		290,221		1,112,118
Corporate expense / other³	24,097		27,311		35,603		39,651		126,662		30,866		24,512		28,658		63,781		147,817
Interest expense	27,268		28,711		27,724		28,234		111,937		31,808		31,754		31,410		30,846		125,818
Interest income	(1,183)		(728)		(960)		(700)		(3,571)		(890)		(945)		(1,263)		(1,428)		(4,526)
Earnings before provision for income taxes	213,500		156,829		250,997		220,408		841,734		138,318		249,739		257,930		197,022		843,009
Provision for income taxes	37,221		32,063		50,697		38,302		158,283		32,613		51,654		51,924		28,900		165,091
Net earnings	$	176,279	$	124,766	$	200,300	$	182,106	$	683,451	$	105,705	$	198,085	$	206,006	$	168,122	$	677,918

SEGMENT MARGIN
Engineered Products	16.9 %		13.9 %		16.8 %		14.3 %		15.6 %		16.0 %		17.9 %		17.4 %		17.4 %		17.2 %
Fueling Solutions	14.9 %		14.5 %		17.5 %		17.0 %		16.1 %		10.0 %		13.5 %		16.5 %		16.6 %		14.3 %
Imaging & Identification	20.1 %		16.7 %		19.5 %		18.1 %		18.6 %		20.9 %		20.5 %		22.4 %		20.9 %		21.2 %
Pumps & Process Solutions ¹	20.7 %		21.9 %		25.8 %		23.5 %		23.1 %		4.5 %		22.5 %		22.7 %		21.8 %		17.9 %
Refrigeration & Food Equipment ²	7.5 %		3.9 %		10.9 %		8.1 %		7.8 %		7.4 %		11.5 %		9.5 %		4.7 %		8.5 %
Total segment operating margin	15.9 %		14.1 %		17.9 %		16.2 %		16.1 %		11.6 %		16.8 %		17.4 %		16.3 %		15.6 %

DEPRECIATION AND AMORTIZATION EXPENSE
Engineered Products	$	10,122	$	9,722	$	10,717	$	12,042	$	42,603	$	10,359	$	10,452	$	10,095	$	10,126	$	41,032
Fueling Solutions	18,339		17,968		18,014		18,482		72,803		17,879		18,945		18,744		19,477		75,045
Imaging & Identification	8,769		9,224		9,809		10,576		38,378		7,435		7,413		7,360		8,322		30,530
Pumps & Process Solutions	18,336		17,572		17,206		19,077		72,191		17,548		16,201		16,018		17,817		67,584
Refrigeration & Food Equipment	11,548		11,421		12,081		11,491		46,541		13,011		12,777		13,047		12,525		51,360
Corporate	1,638		1,696		1,662		1,539		6,535		1,506		1,981		1,523		1,726		6,736
Total depreciation and amortization expense	$	68,752	$	67,603	$	69,489	$	73,207	$	279,051	$	67,738	$	67,769	$	66,787	$	69,993	$	272,287

¹ Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder Pompe S.r.l.
² Q1, Q2, Q3, and FY 2020 include a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain, respectively, on the sale of the Chino, California branch of The AMS Group ("AMS Chino"). Q2 and FY 2020 also include a $3,640 write-off of assets.
³ Q4 and FY 2019 include a $23,543 loss on early extinguishment of debt.

DOVER CORPORATION QUARTERLY EARNINGS PER SHARE (unaudited)(in thousands, except per share data*)

Earnings Per Share
	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
Net earnings per share:
Basic	$	1.22	$	0.87	$	1.39	$	1.27	$	4.74	$	0.73	$	1.36	$	1.42	$	1.16	$	4.67
Diluted	$	1.21	$	0.86	$	1.38	$	1.25	$	4.70	$	0.72	$	1.35	$	1.40	$	1.15	$	4.61

Net earnings and weighted average shares used in calculated earnings per share amounts are as follows:
Net earnings	$	176,279	$	124,766	$	200,300	$	182,106	$	683,451	$	105,705	$	198,085	$	206,006	$	168,122	$	677,918

Weighted average shares outstanding:
Basic	144,259		143,955		144,032		143,954		144,050		145,087		145,366		145,372		144,966		145,198
Diluted	145,782		144,995		145,289		145,355		145,393		146,911		147,179		147,051		146,790		146,992

* Per share data may be impacted by rounding.

DOVER CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)(in thousands)

	December 31, 2020		December 31, 2019
Assets:
Cash and cash equivalents	$	513,075	$	397,253
Receivables, net of allowances	1,137,223		1,217,190
Inventories, net	835,804		806,141
Prepaid and other current assets	133,085		127,846
Property, plant and equipment, net	897,326		842,318
Goodwill	4,072,542		3,783,347
Intangible assets, net	1,083,772		1,055,014
Other assets and deferred charges	479,247		440,368
Total assets	$	9,152,074	$	8,669,477

Liabilities and Stockholders' Equity:
Notes payable	$	—	$	84,700
Payables, accrued expenses and other current liabilities	1,738,798		1,663,391
Deferred taxes and other non-current liabilities	918,674		903,010
Long-term debt	3,108,829		2,985,716
Stockholders' equity	3,385,773		3,032,660
Total liabilities and stockholders' equity	$	9,152,074	$	8,669,477

DOVER CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(in thousands)

	Years Ended December 31,
	2020		2019
*Operating activities:*
Net earnings	$	683,451	$	677,918
Loss on assets held for sale	—		46,946
Loss on extinguishment of debt	—		23,543
Depreciation and amortization	279,051		272,287
Stock-based compensation	25,026		29,702
Contributions to employee benefit plans	(19,801)		(21,436)
Gain on sale of businesses	(5,213)		—
Net change in assets and liabilities	142,296		(83,654)
Net cash provided by operating activities	1,104,810		945,306

*Investing activities:*
Additions to property, plant and equipment	(165,692)		(186,804)
Acquisitions (net of cash and cash equivalents acquired)	(335,786)		(215,687)
Proceeds from the sale of property, plant and equipment	7,207		4,168
Proceeds from the sale of businesses	15,400		24,218
Other	(2,508)		(10,150)
Net cash used in investing activities	(481,379)		(384,255)

*Financing activities:*
Change in commercial paper and notes payable, net	(84,700)		(135,650)
Net increase in long-term debt	—		42,357
Dividends to stockholders	(284,312)		(282,197)
Purchase of common stock	(106,279)		(143,280)
Payments to settle employee tax obligations on exercise	(28,476)		(37,370)
Other	(2,523)		(1,902)
Net cash used in financing activities	(506,290)		(558,042)

Effect of exchange rate changes on cash	(1,319)		(1,977)

Net increase in cash and cash equivalents	115,822		1,032
Cash and cash equivalents at beginning of period	397,253		396,221
Cash and cash equivalents at end of period	$	513,075	$	397,253

DOVER CORPORATION QUARTERLY ADJUSTED EARNINGS AND ADJUSTED EARNINGS PER SHARE (NON-GAAP) (unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations

	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
Adjusted net earnings:
Net earnings	$	176,279	$	124,766	$	200,300	$	182,106	$	683,451	$	105,705	$	198,085	$	206,006	$	168,122	$	677,918
Acquisition-related amortization, pre-tax ¹	34,062		34,101		35,325		35,027		138,515		35,635		34,997		34,244		33,460		138,336
Acquisition-related amortization, tax impact ²	(8,411)		(8,451)		(8,810)		(8,695)		(34,367)		(8,964)		(8,777)		(8,624)		(8,403)		(34,768)
Rightsizing and other costs, pre-tax ³	7,859		16,840		5,848		20,925		51,472		3,963		6,457		3,807		17,926		32,153
Rightsizing and other costs, tax impact ²	(1,605)		(3,452)		(1,343)		(4,402)		(10,802)		(861)		(1,377)		(806)		(3,745)		(6,789)
Loss on extinguishment of debt, pre-tax ⁴	—		—		—		—		—		—		—		—		23,543		23,543
Loss on extinguishment of debt, tax impact ²	—		—		—		—		—		—		—		—		(5,163)		(5,163)
Loss on assets held for sale ⁵	—		—		—		—		—		46,946		—		—		—		46,946
(Gain) loss on disposition, pre-tax ⁶	(6,551)		781		557		—		(5,213)		—		—		—		—		—
(Gain) loss on disposition, tax-impact ²	1,592		(190)		(135)		—		1,267		—		—		—		—		—
Adjusted net earnings	$	203,225	$	164,395	$	231,742	$	224,961	$	824,323	$	182,424	$	229,385	$	234,627	$	225,740	$	872,176

Adjusted diluted net earnings per share:
Diluted net earnings per share	$	1.21	$	0.86	$	1.38	$	1.25	$	4.70	$	0.72	$	1.35	$	1.40	$	1.15	$	4.61
Acquisition-related amortization, pre-tax ¹	0.23		0.24		0.24		0.24		0.95		0.24		0.24		0.23		0.23		0.94
Acquisition-related amortization, tax impact ²	(0.06)		(0.06)		(0.06)		(0.06)		(0.24)		(0.06)		(0.06)		(0.06)		(0.06)		(0.24)
Rightsizing and other costs, pre-tax ³	0.05		0.12		0.04		0.14		0.35		0.03		0.04		0.03		0.12		0.22
Rightsizing and other costs, tax impact ²	(0.01)		(0.02)		(0.01)		(0.03)		(0.07)		(0.01)		(0.01)		(0.01)		(0.03)		(0.06)
Loss on extinguishment of debt, pre-tax ⁴	—		—		—		—		—		—		—		—		0.16		0.16
Loss on extinguishment of debt, tax impact ²	—		—		—		—		—		—		—		—		(0.04)		(0.04)
Loss on assets held for sale ⁵	—		—		—		—		—		0.32		—		—		—		0.32
(Gain) loss on disposition, pre-tax ⁶	(0.04)		—		—		—		(0.03)		—		—		—		—		—
(Gain) loss on disposition, tax-impact ²	0.01		—		—		—		0.01		—		—		—		—		—
Adjusted diluted net earnings per share	$	1.39	$	1.13	$	1.60	$	1.55	$	5.67	$	1.24	$	1.56	$	1.60	$	1.54	$	5.93

¹ Includes amortization on acquisition-related intangible assets and inventory step-up.
² Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period.
³ Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges.
⁴ Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021.
⁵ Represents a loss on assets held for sale of Finder Pompe S.r.l. ("Finder"). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
⁶ Represents a (gain) loss on the disposition of AMS Chino within the Refrigeration & Food Equipment segment, including working capital adjustments.

* Per share data and totals may be impacted by rounding.

DOVER CORPORATION QUARTERLY SEGMENT ADJUSTED EBIT AND ADJUSTED EBITDA (NON-GAAP) (unaudited)(in thousands)

Non-GAAP Reconciliations

	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
ADJUSTED SEGMENT EBIT AND ADJUSTED EBITDA
Engineered Products:
Segment earnings (EBIT)	$	69,094	$	47,702	$	64,890	$	56,481	$	238,167	$	67,119	$	77,129	$	74,367	$	73,233	$	291,848
Rightsizing and other costs	361		4,169		2,375		4,625		11,530		80		1,125		590		1,355		3,150
Adjusted EBIT - Segment	69,455		51,871		67,265		61,106		249,697		67,199		78,254		74,957		74,588		294,998
Adjusted EBIT %	17.0 %		15.2 %		17.4 %		15.5 %		16.3 %		16.0 %		18.2 %		17.6 %		17.7 %		17.4 %
Adjusted D&A ²	10,122		9,722		10,651		10,193		40,688		10,359		9,855		10,095		10,126		40,435
Adjusted EBITDA - Segment	$	79,577	$	61,593	$	77,916	$	71,299	$	290,385	$	77,558	$	88,109	$	85,052	$	84,714	$	335,433
Adjusted EBITDA %	19.5 %		18.0 %		20.2 %		18.1 %		19.0 %		18.5 %		20.5 %		19.9 %		20.1 %		19.8 %
Fueling Solutions:
Segment earnings (EBIT)	$	53,498	$	47,214	$	66,601	$	69,661	$	236,974	$	37,230	$	52,637	$	68,069	$	73,937	$	231,873
Rightsizing and other costs	1,493		868		1,615		2,727		6,703		752		1,768		811		1,554		4,885
Adjusted EBIT - Segment	54,991		48,082		68,216		72,388		243,677		37,982		54,405		68,880		75,491		236,758
Adjusted EBIT %	15.3 %		14.7 %		17.9 %		17.7 %		16.5 %		10.2 %		13.9 %		16.7 %		17.0 %		14.6 %
Adjusted D&A ²	18,339		17,783		18,014		18,225		72,361		17,879		18,945		18,744		19,477		75,045
Adjusted EBITDA - Segment	$	73,330	$	65,865	$	86,230	$	90,613	$	316,038	$	55,861	$	73,350	$	87,624	$	94,968	$	311,803
Adjusted EBITDA %	20.4 %		20.2 %		22.7 %		22.1 %		21.4 %		15.0 %		18.8 %		21.3 %		21.4 %		19.2 %
Imaging & Identification:
Segment earnings (EBIT)	$	51,482	$	38,046	$	51,928	$	52,017	$	193,473	$	55,955	$	54,641	$	61,655	$	57,233	$	229,484
Rightsizing and other costs	264		(527)		99		6,191		6,027		389		1,268		301		4,392		6,350
Adjusted EBIT - Segment	51,746		37,519		52,027		58,208		199,500		56,344		55,909		61,956		61,625		235,834
Adjusted EBIT %	20.2 %		16.5 %		19.6 %		20.2 %		19.2 %		21.0 %		21.0 %		22.5 %		22.5 %		21.7 %
Adjusted D&A ²	8,769		9,224		9,809		10,201		38,003		7,336		7,317		7,286		7,892		29,831
Adjusted EBITDA - Segment	$	60,515	$	46,743	$	61,836	$	68,409	$	237,503	$	63,680	$	63,226	$	69,242	$	69,517	$	265,665
Adjusted EBITDA %	23.6 %		20.5 %		23.3 %		23.8 %		22.9 %		23.7 %		23.7 %		25.2 %		25.3 %		24.5 %
Pumps & Process Solutions:
Segment earnings (EBIT)	$	66,079	$	67,702	$	89,786	$	81,709	$	305,276	$	14,991	$	76,278	$	77,433	$	71,379	$	240,081
Rightsizing and other costs	3,846		4,691		1,771		3,128		13,436		414		903		943		3,868		6,128
Loss on assets held for sale ¹	—		—		—		—		—		46,946		—		—		—		46,946
Adjusted EBIT - Segment	69,925		72,393		91,557		84,837		318,712		62,351		77,181		78,376		75,247		293,155
Adjusted EBIT %	21.9 %		23.4 %		26.3 %		24.4 %		24.1 %		18.9 %		22.8 %		23.0 %		22.9 %		21.9 %
Adjusted D&A ²	16,230		16,816		17,206		17,565		67,817		17,548		16,199		16,018		17,004		66,769
Adjusted EBITDA - Segment	$	86,155	$	89,209	$	108,763	$	102,402	$	386,529	$	79,899	$	93,380	$	94,394	$	92,251	$	359,924
Adjusted EBITDA %	27.0 %		28.9 %		31.3 %		29.5 %		29.2 %		24.2 %		27.6 %		27.7 %		28.1 %		26.9 %
Refrigeration & Food Equipment:
Segment earnings (EBIT)	$	23,529	$	11,459	$	40,159	$	27,725	$	102,872	$	24,807	$	44,375	$	35,211	$	14,439	$	118,832
Rightsizing and other costs	704		6,016		(971)		726		6,475		2,293		666		840		2,243		6,042
(Gain) loss on disposition ³	(6,551)		781		557		—		(5,213)		—		—		—		—		—
Adjusted EBIT - Segment	17,682		18,256		39,745		28,451		104,134		27,100		45,041		36,051		16,682		124,874
Adjusted EBIT %	5.7 %		6.2 %		10.8 %		8.3 %		7.9 %		8.1 %		11.7 %		9.7 %		5.4 %		8.9 %
Adjusted D&A ²	11,548		11,421		12,081		11,491		46,541		13,011		12,777		13,047		12,525		51,360
Adjusted EBITDA - Segment	$	29,230	$	29,677	$	51,826	$	39,942	$	150,675	$	40,111	$	57,818	$	49,098	$	29,207	$	176,234
Adjusted EBITDA %	9.4 %		10.1 %		14.1 %		11.7 %		11.4 %		12.0 %		15.0 %		13.3 %		9.5 %		12.6 %
Total Segments:
Segment earnings (EBIT) ⁴	$	263,682	$	212,123	$	313,364	$	287,593	$	1,076,762	$	200,102	$	305,060	$	316,735	$	290,221	$	1,112,118
Rightsizing and other costs	6,668		15,217		4,889		17,397		44,171		3,928		5,730		3,485		13,412		26,555
Loss on assets held for sale ¹	—		—		—		—		—		46,946		—		—		—		46,946
(Gain) loss on disposition ³	(6,551)		781		557		—		(5,213)		—		—		—		—		—
Adjusted EBIT - Segment ⁵	263,799		228,121		318,810		304,990		1,115,720		250,976		310,790		320,220		303,633		1,185,619
Adjusted EBIT % ⁴	15.9 %		15.2 %		18.2 %		17.1 %		16.7 %		14.5 %		17.2 %		17.5 %		17.1 %		16.6 %
Adjusted D&A ²	65,008		64,966		67,761		67,675		265,410		66,133		65,093		65,190		67,024		263,440
Adjusted EBITDA - Segment ⁵	$	328,807	$	293,087	$	386,571	$	372,665	$	1,381,130	$	317,109	$	375,883	$	385,410	$	370,657	$	1,449,059
Adjusted EBITDA % ⁵	19.9 %		19.5 %		22.1 %		20.9 %		20.7 %		18.4 %		20.7 %		21.1 %		20.9 %		20.3 %
¹ Q1 and FY 2019 include a $46,946 loss on assets held for sale for Finder.
² Adjusted D&A is depreciation and amortization expense, excluding depreciation and amortization included within rightsizing and other costs.
³ Q1, Q2, Q3, and FY 2020 includes a $6,551 gain, a $781 expense, a $557 expense and a $5,213 net gain on the sale of a business for AMS Chino, respectively.
⁴ Refer to Quarterly Segment Information section for reconciliation of total segment earnings (EBIT) to net earnings.
⁵ Refer to Non-GAAP Disclosures section for definition.

DOVER CORPORATION REVENUE GROWTH FACTORS (NON-GAAP) (unaudited)(in thousands, except per share data*)

Non-GAAP Reconciliations

Revenue Growth Factors

	2020
	Q1				Q2		Q3		Q4		Q4 YTD
Organic
Engineered Products	(1.9)	%			(20.1)	%	(10.4)	%	(8.8)	%	(10.3)	%
Fueling Solutions	(2.6)	%			(14.8)	%	(7.9)	%	(9.4)	%	(8.8)	%
Imaging & Identification	(4.3)	%			(14.0)	%	(7.6)	%	(2.9)	%	(7.2)	%
Pumps & Process Solutions	(1.1)	%			(8.8)	%	(0.9)	%	1.8	%	(2.3)	%
Refrigeration & Food Equipment	(4.3)	%			(20.2)	%	2.6	%	13.2	%	(3.0)	%
Total Organic	(2.7)	%			(16.0)	%	(5.1)	%	(2.3)	%	(6.6)	%
Acquisitions	0.8	%			0.7	%	1.0	%	1.2	%	1.0	%
Dispositions	(0.7)	%			(0.7)	%	(0.8)	%	(0.5)	%	(0.7)	%
Currency translation	(1.4)	%			(1.2)	%	0.7	%	1.9	%	—	%
Total*	(4.0)	%	—	%	(17.2)	%	(4.2)	%	0.3	%	(6.3)	%

* Totals may be impacted by rounding.

	2020
	Q1		Q2		Q3		Q4		Q4 YTD
Organic
United States	3.5	%	(10.3)	%	(4.2)	%	(1.0)	%	(3.1)	%
Other Americas	(4.7)	%	(33.5)	%	(4.7)	%	(1.4)	%	(12.1)	%
Europe	(7.4)	%	(19.5)	%	(4.2)	%	(2.5)	%	(8.5)	%
Asia	(19.2)	%	(14.3)	%	(10.1)	%	(11.4)	%	(13.5)	%
Other	(8.8)	%	(33.1)	%	(5.8)	%	10.9	%	(9.3)	%
Total Organic	(2.7)	%	(16.0)	%	(5.1)	%	(2.3)	%	(6.6)	%
Acquisitions	0.8	%	0.7	%	1.0	%	1.2	%	1.0	%
Dispositions	(0.7)	%	(0.7)	%	(0.8)	%	(0.5)	%	(0.7)	%
Currency translation	(1.4)	%	(1.2)	%	0.7	%	1.9	%	—	%
Total*	(4.0)	%	(17.2)	%	(4.2)	%	0.3	%	(6.3)	%

* Totals may be impacted by rounding.

Adjusted Guidance Reconciliation

	2020 Actual		2021 Guidance
*Adjusted net earnings per share:**
Net earnings (GAAP)	$	4.70	$5.42 - $5.62
Acquisition-related amortization, net	0.72		0.72
Rightsizing and other costs, net	0.28		0.11
Gain on disposition, net	(0.03)		—
Adjusted net earnings (Non-GAAP)	$	5.67	$6.25 - $6.45

* Per share data and totals may be impacted by rounding.

DOVER CORPORATION PERFORMANCE MEASURES (unaudited)(in thousands)

	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
BOOKINGS

Engineered Products	$	414,972	$	278,373	$	381,139	$	484,002	$	1,558,486	$	427,697	$	397,420	$	426,059	$	457,145	$	1,708,321
Fueling Solutions	373,070		311,498		383,902		403,400		1,471,870		343,083		394,256		450,727		425,698		1,613,764
Imaging & Identification	272,604		221,315		266,423		304,756		1,065,098		267,762		264,175		284,527		276,451		1,092,915
Pumps & Process Solutions	369,403		275,872		323,801		365,262		1,334,338		369,801		375,905		329,642		318,482		1,393,830
Refrigeration & Food Equipment	355,157		326,400		449,549		379,393		1,510,499		376,998		384,365		323,422		361,970		1,446,755
Intra-segment eliminations	(375)		(460)		(926)		(425)		(2,186)		(725)		(490)		(528)		872		(871)
Total consolidated bookings	$	1,784,831	$	1,412,998	$	1,803,888	$	1,936,388	$	6,938,105	$	1,784,616	$	1,815,631	$	1,813,849	$	1,840,618	$	7,254,714

BACKLOG

Engineered Products	$	453,867	$	378,874	$	373,458	$	463,701			$	451,335	$	418,154	$	416,025	$	452,142
Fueling Solutions	211,518		199,305		204,574		201,521				185,847		186,202		223,081		205,842
Imaging & Identification	170,119		168,904		171,158		192,785				118,177		116,810		121,877		125,775
Pumps & Process Solutions	397,969		379,090		361,631		390,238				353,066		378,427		361,478		353,073
Refrigeration & Food Equipment	356,133		390,368		472,140		510,498				311,632		310,454		262,870		320,577
Intra-segment eliminations	(159)		(367)		(269)		(192)				(403)		(141)		(252)		(249)
Total consolidated backlog	$	1,589,447	$	1,516,174	$	1,582,692	$	1,758,551			$	1,419,654	$	1,409,906	$	1,385,079	$	1,457,160

Bookings Growth Factors

	2020
	Q1		Q2		Q3		Q4		Q4 YTD
Organic
Engineered Products	(2.3)	%	(29.8)	%	(11.6)	%	3.3	%	(9.5)	%
Fueling Solutions	9.5	%	(18.2)	%	(14.2)	%	(6.0)	%	(8.0)	%
Imaging & Identification	0.3	%	(16.5)	%	(9.9)	%	0.7	%	(6.3)	%
Pumps & Process Solutions	2.2	%	(25.7)	%	(3.7)	%	10.8	%	(4.8)	%
Refrigeration & Food Equipment	(4.2)	%	(11.6)	%	41.3	%	5.6	%	6.5	%
Total Organic	0.9	%	(20.6)	%	(1.1)	%	2.4	%	(4.6)	%
Acquisitions	1.0	%	0.7	%	0.8	%	1.5	%	1.0	%
Dispositions	(0.7)	%	(0.6)	%	(0.6)	%	(0.4)	%	(0.6)	%
Currency translation	(1.2)	%	(1.7)	%	0.4	%	1.7	%	(0.2)	%
Total*	—	%	(22.2)	%	(0.5)	%	5.2	%	(4.4)	%
* Totals may be impacted by rounding.

ADDITIONAL INFORMATION
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)

Acquisitions

During the fourth quarter of 2020 the Company completed the acquisition of Innovative Control Systems, Inc. ("ICS") within the Fueling Solutions segment for a total consideration of $77.0 million, net of cash acquired. For the full year 2020, the Company acquired six businesses in separate transactions for total consideration of $335.8 million, net of cash acquired. The businesses were acquired to complement and expand upon existing operations within the Engineered Products, Fueling Solutions, Imaging & Identification and Pumps & Process Solutions segments.

Discontinued and Disposed Businesses

The Company did not dispose of any businesses during the fourth quarter of 2020. For the full year 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company, which generated total cash proceeds of $15.4 million. This sale resulted in a pre-tax gain on sale of $5.2 million included within the Refrigeration & Food Equipment segment. The sale does not represent a strategic shift that will have a major effect on operations and financial results and, therefore, did not qualify for presentation as a discontinued operation.

Rightsizing and Other Costs

During the fourth quarter and year ended December 31, 2020, rightsizing activities included restructuring charges of $18.1 million and $44.5 million, respectively, and other costs of $2.8 million and $7.0 million, respectively. For the full year 2020, 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 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 Refrigeration & Food Equipment segment as a result of restructuring actions.

($ in millions)	2020				2019
	Q4		FY		Q4		FY
Engineered Products	$	4.6	$	11.5	$	1.4	$	3.2
Fueling Solutions	2.7		6.7		1.6		4.9
Imaging & Identification	6.2		6.0		4.4		6.4
Pumps & Process Solutions	3.1		13.4		3.9		6.1
Refrigeration & Food Equipment	0.7		6.5		2.2		6.0
Corporate	3.5		7.3		4.5		5.6
Total*	$	20.9	$	51.5	$	17.9	$	32.2
* Totals may be impacted by rounding.

Tax Rate

The effective tax rate was 17.4% and 14.7% for the fourth quarters of 2020 and 2019, respectively. On a full year basis, the effective tax rate for 2020 and 2019 was 18.8% and 19.6%, respectively. The 2020 tax rate was primarily driven by the release of reserves due to the statute of limitations expiration and the tax deduction for share-based awards. The 2019 tax rate was primarily driven by the tax deduction for share-based awards and other favorable discrete items, partially offset by the exclusion of capital losses on a disposition of a business under local tax law.

ADDITIONAL INFORMATION (CONTINUED)
FOURTH QUARTER AND FULL YEAR 2020
(Amounts in thousands except share data and where otherwise indicated)

Share Repurchases

During the year ended December 31, 2020, the Company purchased approximately 1.0 million shares of its common stock for a total cost of $106.3 million, or $108.54 per share. In November 2020, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares beginning on January 1, 2021 through December 31, 2023.

Capitalization

The following table provides a reconciliation of total debt and net debt to net capitalization to the most directly comparable GAAP measures:

Net Debt to Net Capitalization Ratio (Non-GAAP)	December 31, 2020			December 31, 2019
Commercial paper	$	—		$	84,700
Long-term debt	3,108,829			2,985,716
Total debt	3,108,829			3,070,416
Less: Cash and cash equivalents	(513,075)			(397,253)
Net debt	2,595,754			2,673,163
Add: Stockholders' equity	3,385,773			3,032,660
Net capitalization	$	5,981,527		$	5,705,823
Net debt to net capitalization	43.4		%	46.8		%

Quarterly Cash Flow
	2020										2019
	Q1		Q2		Q3		Q4		FY 2020		Q1		Q2		Q3		Q4		FY 2019
Net Cash Flows Provided By (Used In):
Operating activities	$	75,863	$	271,809	$	339,247	$	417,891	$	1,104,810	$	24,524	$	208,709	$	350,865	$	361,208	$	945,306
Investing activities	(230,511)		(67,763)		(64,724)		(118,381)		(481,379)		(217,690)		(69,755)		(48,612)		(48,198)		(384,255)
Financing activities	280,954		(67,458)		(496,832)		(222,954)		(506,290)		36,067		(60,596)		(277,901)		(255,612)		(558,042)

Quarterly Free Cash Flow (Non-GAAP)
	2020															2019
	Q1			Q2			Q3			Q4			FY 2020			Q1			Q2			Q3			Q4			FY 2019
Cash flow from operating activities	$	75,863		$	271,809		$	339,247		$	417,891		$	1,104,810		$	24,524		$	208,709		$	350,865		$	361,208		$	945,306
Less: Capital expenditures	(40,172)			(38,999)			(44,393)			(42,128)			(165,692)			(37,122)			(53,970)			(46,184)			(49,528)			(186,804)
Free cash flow *	$	35,691		$	232,810		$	294,854		$	375,763		$	939,118		$	(12,598)		$	154,739		$	304,681		$	311,680		$	758,502

Free cash flow as a percentage of revenue	2.2		%	15.5		%	16.9		%	21.1		%	14.1		%	(0.7)		%	8.5		%	16.7		%	17.6		%	10.6		%

Free cash flow as a percentage of net earnings	20.2		%	186.6		%	147.2		%	206.3		%	137.4		%	(11.9)		%	78.1		%	147.9		%	185.4		%	111.9		%

* FY 2020 cash flow from operating activities reflects benefits from permitted deferrals of tax payments, most significantly in Q2, Q3, and Q4 and advanced payments on contracts, most significantly in Q3.

Non-GAAP Disclosures

In an effort to provide investors with additional information regarding our results as determined by GAAP, Management also discloses non-GAAP information that Management believes provides useful information to investors. Adjusted net earnings, adjusted diluted net earnings per share, total segment earnings (EBIT), adjusted EBIT by segment, adjusted EBIT margin by segment, adjusted EBITDA by segment, adjusted EBITDA margin by segment, net debt, net capitalization, net debt to net capitalization ratios, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, diluted net earnings per share, debt or equity, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.

Adjusted net earnings represents net earnings adjusted for the effect of acquisition-related amortization, rightsizing and other costs, loss on extinguishment of debt, loss on assets held for sale and gain/loss on disposition. We exclude after-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to the Company's commercial performance during the period and/or Management believes they are not indicative of the Company's ongoing operating costs or gains in a given period.

Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.

Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.

Adjusted EBIT by Segment is defined as net earnings before income taxes, net interest expense, corporate expenses, rightsizing and other costs, a 2019 loss on assets held for sale and a 2020 gain/loss on disposition. Adjusted EBIT Margin by Segment is defined as adjusted EBIT by segment divided by segment revenue.

Adjusted EBITDA by Segment is defined as adjusted EBIT by segment plus depreciation and amortization, excluding depreciation and amortization included within rightsizing and other costs. Adjusted EBITDA Margin by Segment is defined as adjusted EBITDA by segment divided by segment revenue.

Management believes these measures are useful to investors to better understand the Company's ongoing profitability as it will better reflect the Company's core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.

Net debt represents total debt minus cash and cash equivalents. Net capitalization represents net debt plus stockholders' equity. Net debt to net capitalization ratio equals net debt divided by net capitalization. Management believes the net debt to net capitalization ratio is useful to assess our overall financial leverage and capacity.

Free cash flow represents net cash provided by operating activities minus capital expenditures. 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. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because it provides management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.

Performance Measures Definitions

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 acquisition and dispositions. This metric is an important measure of performance and an indicator of revenue order trends.

Backlog represents an estimate of the total remaining bookings at a point in time for which performance obligations have not yet have satisfied. This metric is useful as it represents the aggregate amount we expect to recognize as revenue in the future.

We use the above 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.

Investor Contact:		Media Contact:
Andrey Galiuk		Adrian Sakowicz
Vice President - Corporate Development		Vice President - Communications
and Investor Relations		(630) 743-5039
(630) 743-5131		[email protected]
[email protected]