10-Q 1 dov-20210930.htm 10-Q dov-20210930
DOVER 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission File Number: 1-4018
dov-20210930_g1.jpg
(Exact name of registrant as specified in its charter)
Delaware53-0257888
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
3005 Highland Parkway 
Downers Grove, Illinois
60515
(Address of principal executive offices)(Zip Code)
(630) 541-1540
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockDOVNew York Stock Exchange
1.250% Notes due 2026DOV 26New York Stock Exchange
0.750% Notes due 2027DOV 27New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   No  o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes   No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act    .
Large Accelerated Filer
Accelerated Filer
Emerging Growth Company
Non-Accelerated Filer
Smaller Reporting Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No  
The number of shares outstanding of the Registrant’s common stock as of October 12, 2021 was 143,984,653.



Dover Corporation
Form 10-Q
Table of Contents
Page
 
 
 
 
  
 




Item 1. Financial Statements

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenue$2,018,269 $1,748,256 $5,917,846 $4,903,370 
Cost of goods and services1,263,690 1,089,527 3,669,547 3,080,800 
Gross profit754,579 658,729 2,248,299 1,822,570 
Selling, general and administrative expenses412,553 381,831 1,249,593 1,135,512 
Operating earnings342,026 276,898 998,706 687,058 
Interest expense26,433 27,724 79,917 83,703 
Interest income(1,466)(960)(3,088)(2,871)
Loss (gain) on sale of a business 557  (5,213)
Other income, net(10,460)(1,420)(18,236)(9,887)
Earnings before provision for income taxes327,519 250,997 940,113 621,326 
Provision for income taxes63,763 50,697 179,080 119,981 
Net earnings$263,756 $200,300 $761,033 $501,345 
Net earnings per share:
Basic$1.83 $1.39 $5.29 $3.48 
Diluted$1.81 $1.38 $5.24 $3.45 
Weighted average shares outstanding:
Basic143,976 144,032 143,895 144,082 
Diluted145,440 145,289 145,220 145,313 
 

See Notes to Condensed Consolidated Financial Statements


1

DOVER CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net earnings$263,756 $200,300 $761,033 $501,345 
Other comprehensive (loss) earnings, net of tax
Foreign currency translation adjustments:
Foreign currency translation (losses) gains(26,155)29,271 (17,567)(19,714)
Total foreign currency translation adjustments (net of $(5,446), $9,872, $(11,669), $12,761 tax (provision) benefit, respectively)
(26,155)29,271 (17,567)(19,714)
Pension and other post-retirement benefit plans:
Amortization of actuarial losses included in net periodic pension cost2,353 1,881 7,080 5,385 
Amortization of prior service costs included in net periodic pension cost214 250 646 794 
Total pension and other post-retirement benefit plans (net of $(771), $(421), $(2,320), $(1,408) tax provision, respectively)
2,567 2,131 7,726 6,179 
Changes in fair value of cash flow hedges:
Unrealized net (losses) gains arising during period(212)(278)4,107 (3,472)
Net (gains) losses reclassified into earnings(206)(210)(3,077)318 
Total cash flow hedges (net of $122, $139, $(302), $896 tax benefit (provision), respectively)
(418)(488)1,030 (3,154)
Other comprehensive (loss) earnings, net of tax(24,006)30,914 (8,811)(16,689)
Comprehensive earnings$239,750 $231,214 $752,222 $484,656 


See Notes to Condensed Consolidated Financial Statements

2

DOVER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 September 30, 2021December 31, 2020
Assets
Current assets:  
Cash and cash equivalents$739,144 $513,075 
Receivables, net of allowances of $41,598 and $40,474
1,351,144 1,137,223 
Inventories, net1,055,831 835,804 
Prepaid and other current assets153,296 133,085 
Total current assets3,299,415 2,619,187 
Property, plant and equipment, net906,268 897,326 
Goodwill4,153,846 4,072,542 
Intangible assets, net1,036,085 1,083,772 
Other assets and deferred charges507,369 479,247 
Total assets$9,902,983 $9,152,074 
Liabilities and Stockholders' Equity
Current liabilities:  
Accounts payable$1,047,824 $853,942 
Accrued compensation and employee benefits270,944 239,750 
Deferred revenue195,509 184,845 
Accrued insurance104,000 98,954 
Other accrued expenses350,222 343,637 
Federal and other income taxes37,382 17,670 
Total current liabilities2,005,881 1,738,798 
Long-term debt3,060,184 3,108,829 
Deferred income taxes321,610 298,423 
Noncurrent income tax payable48,376 49,937 
Other liabilities575,114 570,314 
Stockholders' equity:  
Total stockholders' equity3,891,818 3,385,773 
Total liabilities and stockholders' equity$9,902,983 $9,152,074 


See Notes to Condensed Consolidated Financial Statements


















3

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at June 30, 2021$259,371 $853,887 $8,962,863 $(138,059)$(6,218,758)$3,719,304 
Net earnings  263,756   263,756 
Dividends paid ($0.50 per share)
  (72,107)  (72,107)
Common stock issued for the exercise of share-based awards25 (1,795)   (1,770)
Stock-based compensation expense 6,660    6,660 
Other comprehensive loss, net of tax   (24,006) (24,006)
Other, net (19)   (19)
Balance at September 30, 2021$259,396 $858,733 $9,154,512 $(162,065)$(6,218,758)$3,891,818 

 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive (loss) earningsTreasury stockTotal stockholders' equity
Balance at June 30, 2020$258,768 $869,526 $8,368,620 $(263,629)$(6,143,758)$3,089,527 
Net earnings  200,300   200,300 
Dividends paid ($0.495 per share)
  (71,458)  (71,458)
Common stock issued for the exercise of share-based awards125 (10,358)   (10,233)
Stock-based compensation expense 7,371    7,371 
Other comprehensive earnings, net of tax   30,914  30,914 
Balance at September 30, 2020$258,893 $866,539 $8,497,462 $(232,715)$(6,143,758)$3,246,421 



See Notes to Condensed Consolidated Financial Statements























4

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at December 31, 2020$258,982 $868,882 $8,608,284 $(153,254)$(6,197,121)$3,385,773 
Net earnings  761,033   761,033 
Dividends paid ($1.49 per share)
  (214,805)  (214,805)
Common stock issued for the exercise of share-based awards414 (35,252)   (34,838)
Stock-based compensation expense 25,053    25,053 
Common stock acquired    (21,637)(21,637)
Other comprehensive loss, net of tax   (8,811) (8,811)
Other, net 50    50 
Balance at September 30, 2021$259,396 $858,733 $9,154,512 $(162,065)$(6,218,758)$3,891,818 

 Common stock $1 par valueAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossTreasury stockTotal stockholders' equity
Balance at December 31, 2019$258,552 $869,719 $8,211,257 $(216,026)$(6,090,842)$3,032,660 
Adoption of ASU 2016-13
  (2,112)  (2,112)
Net earnings  501,345   501,345 
Dividends paid ($1.475 per share)
  (213,028)  (213,028)
Common stock issued for the exercise of share-based awards341 (21,791)   (21,450)
Stock-based compensation expense 15,591    15,591 
Common stock acquired    (52,916)(52,916)
Other comprehensive loss, net of tax   (16,689) (16,689)
Other, net 3,020    3,020 
Balance at September 30, 2020$258,893 $866,539 $8,497,462 $(232,715)$(6,143,758)$3,246,421 



See Notes to Condensed Consolidated Financial Statements





5

DOVER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 20212020
Operating Activities:  
Net earnings$761,033 $501,345 
Adjustments to reconcile net earnings to cash from operating activities:
Depreciation and amortization218,236 205,844 
Stock-based compensation expense25,053 15,591 
Gain on sale of a business (5,213)
Other, net(11,969)(7,731)
Cash effect of changes in assets and liabilities:
Accounts receivable, net(222,521)31,631 
Inventories(225,522)(19,360)
Prepaid expenses and other assets(38,290)(24,198)
Accounts payable199,877 (104,571)
Accrued compensation and employee benefits32,284 (13,136)
Accrued expenses and other liabilities42,084 131,279 
Accrued and deferred taxes, net8,321 (24,562)
Net cash provided by operating activities788,586 686,919 
Investing Activities:  
Additions to property, plant and equipment(121,157)(123,564)
Acquisitions, net of cash acquired(171,287)(258,674)
Proceeds from sale of property, plant and equipment6,570 5,090 
Proceeds from sale of businesses 15,400 
Other(768)(1,250)
Net cash used in investing activities(286,642)(362,998)
Financing Activities:  
Repurchase of common stock
(21,637)(52,916)
Change in notes payable 5,811 
Dividends paid to stockholders(214,805)(213,028)
Payments to settle employee tax obligations on exercise of share-based awards(34,838)(21,450)
Other(3,518)(1,753)
Net cash used in financing activities(274,798)(283,336)
Effect of exchange rate changes on cash and cash equivalents(1,077)(10,337)
Net increase in cash and cash equivalents226,069 30,248 
Cash and cash equivalents at beginning of period513,075 397,253 
Cash and cash equivalents at end of period$739,144 $427,501 


See Notes to Condensed Consolidated Financial Statements
6

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

1. Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim periods and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes for Dover Corporation ("Dover" or the "Company") for the year ended December 31, 2020, included in the Company's Annual Report on Form 10-K filed with the SEC on February 12, 2021. The year-end Condensed Consolidated Balance Sheet was derived from audited financial statements. Certain amounts in the prior periods have been reclassified to conform to the current year presentation.  

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. The Condensed Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair statement of results for these interim periods. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year.

2. Revenue

A majority of the Company’s revenue is short cycle in nature with shipments within one year from order. A small portion of the Company’s revenue derives from contracts extending over one year. The Company's payment terms generally range between 30 to 90 days and vary by the location of businesses, the type of products manufactured to be sold and the volume of products sold, among other factors.
Over 95% of the Company’s performance obligations are recognized at a point in time that relate to the manufacture and sale of a broad range of products and components. Revenue is recognized when control transfers to the customer upon shipment or completion of installation, testing, certification, or other substantive acceptance provisions required under the contract. Less than 5% of the Company’s revenue is recognized over time and relates to the sale of equipment or services in which the Company transfers control of a good or service over time and the customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company performs, or our performance creates or enhances an asset the customer controls as the asset is created or enhanced, or our performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for its performance to date plus a reasonable margin.

Revenue from contracts with customers is disaggregated by segment and geographic location, as they best depict the nature and amount of the Company’s revenue. See Note 17 — Segment Information for revenue by segment and geographic location.
At September 30, 2021, we estimated that $260 million in revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. We expect to recognize approximately 48% of our unsatisfied (or partially unsatisfied) performance obligations as revenue through 2022, with the remaining balance to be recognized in 2023 and thereafter.

The following table provides information about contract assets and contract liabilities from contracts with customers:
 September 30, 2021December 31, 2020December 31, 2019
Contract assets$25,454 $15,020 $14,894 
Contract liabilities - current195,509 184,845 104,901 
Contract liabilities - non-current24,415 13,921 10,921 

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

The revenue recognized during the nine months ended September 30, 2021 and 2020 that was included in contract liabilities at the beginning of the period, inclusive of adjustments, amounted to $155,255 and $76,766, respectively.

7

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

2021 Acquisitions

During the nine months ended September 30, 2021, the Company acquired six businesses in separate transactions for total consideration of $178,556, net of cash acquired and including contingent consideration. These businesses were acquired to complement and expand upon existing operations within the Engineered Products, Imaging & Identification, Pumps & Process Solutions, and Fueling Solutions segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill of $29,808 is deductible for income tax purposes and $81,561 is non-deductible for income tax purposes for these acquisitions.

On September 15, 2021, the Company acquired 100% of the voting stock of The Espy Corporation ("Espy"), a manufacturer of advanced electronic radio frequency sensor systems, for $60,611, net of cash acquired. The Espy acquisition strengthens the Company's offering of complete signal intelligence systems with integrated software within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $29,808 and intangible assets of $20,200, primarily related to customer intangibles. The Espy acquisition will be treated as an asset acquisition for U.S. income tax purposes, classifying the goodwill and intangibles as tax deductible.

On July 23, 2021, the Company acquired 100% of the voting stock of CDS Visual, Inc. ("CDS Visual"), a leading provider of 3D visualization solutions tailored for industrial applications, for $29,347, net of cash acquired. The CDS Visual acquisition extends the Company's reach of customer-facing digital capabilities within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $20,337 and intangible assets of $9,930, primarily related to technology.

On June 24, 2021, the Company acquired 100% of the voting stock of Blue Bite LLC ("Blue Bite"), a leading provider of consumer engagement and brand protection software solutions, for $29,035, net of cash acquired and including contingent consideration. The Blue Bite acquisition strengthens the Company's offering of product traceability and authentication solutions within the Imaging & Identification segment. In connection with this acquisition, the Company recorded goodwill of $19,378 and intangible assets of $13,250, primarily related to technology.

On June 23, 2021, the Company acquired 100% of the voting stock of Quantex Arc Limited ("Quantex"), a leading provider of single-use, recyclable pumps, for $23,896, net of cash acquired and including contingent consideration. The Quantex acquisition enhances the offering of single-use pumps for biopharma and other hygienic applications within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $14,476 and intangible assets of $11,034, primarily related to patented technology.

On April 19, 2021, the Company acquired 100% of the voting stock of AvaLAN Wireless Systems, Incorporated ("AvaLAN"), a leading provider of secure wireless communications solutions for the convenience and fuel retail industry, for $34,144, net of cash acquired. The AvaLAN acquisition extends the Company's reach into the systems and software offering within the Fueling Solutions segment. In connection with this acquisition, the Company recorded goodwill of $26,679 and intangible assets of $14,630, primarily related to customer intangibles.

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

8

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The following presents the preliminary allocation of purchase price to the assets acquired and liabilities assumed, based on their estimated fair values at their acquisition dates:
Total
Current assets, net of cash acquired$12,343 
Property, plant and equipment8,088 
Goodwill111,369 
Intangible assets69,044 
Other assets and deferred charges4,104 
Current liabilities(12,097)
Other liabilities(14,295)
Net assets acquired$178,556 

The amounts assigned to goodwill and major intangible asset classifications were as follows:
Amount allocatedUseful life
(in years)
Goodwill - tax deductible$29,808 na
Goodwill - non-deductible81,561 na
Customer intangibles33,692 12-15
Unpatented technologies22,680 7-12
Patents6,006 9
Trademarks6,666 15
$180,413 

2020 Acquisitions

During the nine months ended September 30, 2020, the Company acquired five businesses in separate transactions for total consideration of $258,674, net of cash acquired. These businesses were acquired to complement and expand upon existing operations within the Imaging & Identification, Engineered Products and Pumps & Process Solutions segments. The goodwill recorded as a result of these acquisitions represents the economic benefits expected to be derived from product line expansions and operational synergies. Goodwill in the amount of $33,183 is deductible for U.S. income tax purposes and goodwill in the amount of $124,691 is non-deductible for U.S. income tax purposes for these acquisitions.

On August 20, 2020, the Company acquired 100% of the voting stock of Solaris Laser S.A. ("Solaris"), a global manufacturer of product identification and traceability solutions for $18,605, net of cash acquired. The Solaris acquisition enhances the Imaging & Identification segment's growing laser technology product line and further strengthens its position as a leading provider of marking and coding equipment and solutions. In connection with this acquisition, the Company recorded goodwill of $11,693 and intangible assets of $3,280, primarily related to unpatented technology.

On April 30, 2020, the Company acquired 100% of the voting stock of em-tec GmbH ("Em-tec"), a leading designer and manufacturer of flow measurement devices that serve a wide array of medical and biopharmaceutical applications for $30,396, net of cash acquired. The Em-tec acquisition further expands the Company's reach into biopharma and other hygienic applications and enhances its portfolio of flow control technologies within the Pumps & Process Solutions segment. In connection with this acquisition, the Company recorded goodwill of $19,572 and intangible assets of $8,344, primarily related to customer intangibles.

On February 18, 2020, the Company acquired 100% of the voting stock of So. Cal. Soft-Pak, Incorporated ("Soft-Pak"), a leading specialized provider of integrated back office, route management and customer relationship management software solutions to the waste and recycling fleet industry for $45,500, net of cash acquired. The Soft-Pak acquisition strengthens the digital offerings within the Engineered Products segment. In connection with this acquisition, the Company recorded goodwill of $33,183 and intangible assets of $12,800, primarily related to customer intangibles.

On January 24, 2020, the Company acquired 100% of the voting stock of Sys-Tech Solutions, Inc. ("Systech"), a leading provider of product traceability, regulatory compliance and brand-protection software and solutions to pharmaceutical and consumer products manufacturers, for $161,830, net of cash acquired. The Systech acquisition strengthens the portfolio of solutions offered by the Imaging & Identification segment. In connection with this acquisition, the Company recorded goodwill
9

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
of $91,493 and intangible assets of $76,100, primarily related to customer intangibles.

One other immaterial acquisition was completed during the nine months ended September 30, 2020, within the Pumps & Process Solutions segment.

The pro forma effects of the 2021 and 2020 acquisitions are not material to the Company's Consolidated Statements of Earnings.

4. Disposed Operations

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

2021

There were no dispositions for the nine months ended September 30, 2021.

See Note 21 — Subsequent Events for information on a definitive agreement to sell Unified Brands business ("Unified Brands") which is part of the Refrigeration & Food Equipment segment.

2020

On March 6, 2020, the Company completed the sale of the Chino, California branch of The AMS Group ("AMS Chino"), a wholly owned subsidiary of the Company. The Company recognized a net consideration of $15,400, which included a working capital adjustment recognized in the second quarter and paid in the third quarter of 2020. This sale resulted in a pre-tax gain on sale of $5,213 included within the Condensed Consolidated Statements of Earnings and within the Refrigeration & Food Equipment Segment for the nine months ended September 30, 2020. 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.

5. Inventories, net
 September 30, 2021December 31, 2020
Raw materials$624,365 $497,604 
Work in progress232,264 152,360 
Finished goods333,021 304,760 
Subtotal1,189,650 954,724 
Less reserves(133,819)(118,920)
Total$1,055,831 $835,804 

6. Property, Plant and Equipment, net
 September 30, 2021December 31, 2020
Land$61,433 $60,287 
Buildings and improvements576,597 570,366 
Machinery, equipment and other1,817,417 1,772,772 
Property, plant and equipment, gross2,455,447 2,403,425 
Accumulated depreciation(1,549,179)(1,506,099)
Property, plant and equipment, net$906,268 $897,326 

Depreciation expense totaled $36,913 and $34,096 for the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, depreciation expense was $111,152 and $102,016, respectively.
10

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
7. Credit Losses

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

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

The following table provides a roll-forward of the allowance for credit losses that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected.
20212020
Beginning Balance, December 31 of the Prior Year$40,474 $29,381 
Adoption of ASU 2016-13, cumulative-effect adjustment to retained earnings 2,706 
Provision for expected credit losses, net of recoveries4,744 10,248 
Amounts written off charged against the allowance(3,991)(2,113)
Other, including dispositions and foreign currency translation371 171 
Ending balance, September 30$41,598 $40,393 

8. Goodwill and Other Intangible Assets
The changes in the carrying value of goodwill by reportable operating segments were as follows:
 Engineered ProductsFueling SolutionsImaging & IdentificationPumps & Process SolutionsRefrigeration & Food EquipmentTotal
Balance at December 31, 2020$682,985 $940,973 $1,117,589 $786,280 $544,715 $4,072,542 
Acquisitions50,145 26,679 19,378 15,167  111,369 
Purchase price adjustments 1,314 (1,926)  (612)
Foreign currency translation(5,037)(2,945)(16,561)(4,230)(680)(29,453)
Balance at September 30, 2021$728,093 $966,021 $1,118,480 $797,217 $544,035 $4,153,846 

During the nine months ended September 30, 2021, the Company recognized additions of $111,369 to goodwill as a result of acquisitions as discussed in Note 3 — Acquisitions. During the nine months ended September 30, 2021, the Company recorded purchase price adjustments that reduced goodwill by $612, principally related to working capital adjustments for 2020 acquisitions within the Fueling Solutions and Imaging & Identification segments.

11

DOVER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share data and where otherwise indicated) (Unaudited)
The Company’s definite-lived and indefinite-lived intangible assets by major asset class were as follows:
September 30, 2021December 31, 2020
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying Amount
Amortized intangible assets:
Customer intangibles$1,577,058 $900,659 $676,399 $1,559,771 $834,798 $724,973 
Trademarks238,121 115,076 123,045 233,205 103,907 129,298 
Patents167,966 143,855 24,111 163,299 141,182 22,117 
Unpatented technologies201,573 121,243 80,330 180,947 113,404 67,543 
Distributor relationships85,861 54,847 31,014 87,028 51,611 35,417 
Drawings and manuals28,233 27,136 1,097 29,198 26,193 3,005 
Other23,486 20,177 3,309 23,901 19,324 4,577 
Total2,322,298 1,382,993 939,305 2,277,349 1,290,419 986,930 
Unamortized intangible assets:
Trademarks96,780  96,780 96,842  96,842 
Total intangible assets, net$2,419,078 $1,382,993 $1,036,085 $2,374,191 $1,290,419 $1,083,772 

For the three months ended September 30, 2021 and 2020, amortization expense was $35,998 and $35,393, respectively, including acquisition-related intangible amortization of $35,587 and $34,797, respectively. For the nine months ended September 30, 2021 and 2020, amortization expense was $107,084 and $103,828, respectively, including acquisition-related intangible amortization of $105,808 and $102,443, respectively.

9. Restructuring Activities

The Company's restructuring charges by segment were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Engineered Products$870 $2,342 $9,200 $6,860 
Fueling Solutions1,620 1,572 3,084 3,958 
Imaging & Identification168 99 1,032 (167)
Pumps & Process Solutions639 1,719 1,526