Dover (DOV) 10-K risk factor changes: FY2017 vs FY2016

| • | Trends in oil and natural gas prices may affect the drilling and production activity, profitability and financial stability of our customers and therefore the demand for, and profitability of, our energy products and services, which could have a material adverse effect on our business, our consolidated results of [removed: operations and] [added: operations,] financial [removed: condition.] [added: condition and cash flows.] |

[removed: The] [added: Most recently, the] oil and gas industry [removed: historically has] experienced [removed: periodic downturns, including the] [added: a] significant downturn [removed: experienced] in 2015 and 2016.

The level of drilling and production activity is directly affected by trends in oil and natural gas [removed: prices, which have been recently volatile and may continue to be volatile.][added: prices.]

In particular, the prices of oil and natural gas were highly volatile in 2014 and 2015 [added: on significant over supply] and declined dramatically.

Given the long-term nature of many large-scale development projects, [removed: a] [added: another future] significant downturn in the oil and gas industry could result in the reduction in demand for our energy and pumps products and services, and could have a material adverse effect on our consolidated results of operations, financial position and cash flows.

Approximately [added: 44% and] 42% of our revenues [removed: from continuing operations] for [removed: 2016] [added: 2017] and [removed: 39% of our revenues for 2015] [added: 2016, respectively,] were derived outside the United States.

| o | limitations on ownership and [removed: on repatriation or] dividend of earnings; |

[removed: If these businesses are unable to adapt to] [added: Any of] the [removed: rapid technological changes, it] [added: circumstances described above] could adversely affect our consolidated results of operations, financial [removed: position] [added: condition] and cash flows.

Our businesses’ domestic and international sales and operations are subject to risks associated with changes in laws, regulations and policies (including environmental and employment regulations, [added: data security laws, data privacy laws,] export/import laws, tax policies such as export subsidy programs and research and experimentation credits, carbon emission regulations and other similar programs).

[removed: In addition, we] [added: We] cannot provide assurance that our costs of complying with new and evolving regulatory reporting requirements and current or future laws, including environmental protection, employment, data security, data privacy and health and safety laws, will not exceed our estimates.

We and certain of our subsidiaries are, and from time to time may become, parties to a number of legal proceedings incidental to [removed: their businesses involving] [added: our businesses, including] alleged injuries arising out of the use of [removed: their products,] [added: products or] exposure to hazardous substances, or [added: claims related to] patent infringement, employment matters and commercial disputes.

[removed: We are finalizing a plan to announce] [added: During the first quarter of 2017, we announced] a voluntary recall of the product in conjunction with the CPSC.

In most of these agreements, however, the liability of the former owners is limited and certain former owners may be unable to meet [removed: their indemnification responsibilities.]

| • | Our [removed: operations and] [added: operations,] businesses [added: and products] are subject to cybersecurity [removed: and privacy] risks. |

We depend on [removed: various information technologies throughout] our [removed: company] [added: own and third party information technology (“IT”) systems, including cloud-based systems,] to store and process information and support our business activities.

We also [removed: manufacture and sell hardware and software products, and in some cases, we also provide services that] [added: use our third party IT systems to] support customer business activities, such as transmitting payment information, providing mobile monitoring [removed: services] [added: services,] and capturing operational data.

If these technologies, systems, products or services are damaged, cease to function properly, are [removed: breached] [added: compromised] due to employee error, [added: user error,] malfeasance, system errors, or other vulnerabilities, or are subject to cybersecurity attacks, such as those involving unauthorized access, malicious [removed: software and/or] [added: software, or] other intrusions, including by criminals, nation states or insiders, [removed: we could experience production downtimes, operational delays, other detrimental impacts on] our [removed: operations or ability to provide products and services to our customers, the compromising of confidential, proprietary or otherwise protected information, including personal and customer data, destruction, corruption, or theft of data, security][added: business may be adversely impacted.]

[removed: breaches,] [added: The impacts could include production downtimes, operational delays, and] other [added: impacts on our operations and ability to provide products and services to our customers; compromise of confidential, proprietary or otherwise protected information, including personal and customer data; destruction, corruption, or theft of data;] manipulation, disruption, [removed: misappropriation] or improper use of [removed: our systems] [added: these technologies, systems, products] or [removed: networks,] [added: services;] financial losses from remedial actions, loss of business or potential [removed: liability,] [added: liability;] adverse media [removed: coverage,] [added: coverage; and] legal claims or legal proceedings, including regulatory investigations and [removed: actions, and/or] [added: actions; and] damage to our reputation.

While we attempt to mitigate these risks by employing a number of measures, including employee training, technical security [removed: controls and] [added: controls, a breach response plan,] maintenance of backup and protective systems, [added: and security personnel,] 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 [removed: affect] [added: effect] on our consolidated results of operations, financial condition and cash flows.

Unauthorized use of our businesses' intellectual property rights could adversely impact the competitive position of our businesses and [added: could] have a negative impact on our consolidated results of operations, financial condition and cash flows.

Three major ratings agencies (Moody’s, Standard and Poor’s and Fitch Ratings) evaluate our credit profile on an ongoing basis and have each assigned high ratings for our short-term and long-term debt as of December 31, [removed: 2016.][added: 2017.]

The oil and gas industry is cyclical in nature and experiences periodic downturns of varying length and severity.

Oil and gas prices and the level of drilling and production activity have been characterized by significant volatility in recent years.

We expect continued volatility in both crude oil and natural gas prices, as well as in the level of drilling and production related activities.

| • | The proposed spin-off of Wellsite may not be completed on the currently contemplated timeline or terms, or at all, and may not achieve the intended benefits. |

We have previously announced in 2017 a plan to pursue a tax-free spin-off of our Wellsite business into a standalone, publicly-traded company.

We expect to complete the spin-off in May of 2018, subject to the satisfaction or waiver of certain customary conditions.

However, unanticipated developments, including delays in obtaining tax rulings, changes in the macroeconomic environment, uncertainty of the financial markets and challenges in establishing infrastructure or processes could delay or prevent the proposed spin-off or cause the proposed spin-off to occur on terms or conditions that are less favorable and/or different than expected.

Even if the transaction is completed, we may not realize some or all of the anticipated benefits from the spin-off.

We also have incurred and will continue to incur significant expenses in connection with the proposed spin-off which may exceed our current expectations.

Executing the proposed spin-off requires significant time and attention from management, which could distract them from other tasks in operating our business.

Additionally, our employees may be distracted due to uncertainty about their future roles pending the completion of the spin-off.

Following the proposed spin-off, the combined value of the common stock of the two publicly-traded companies may not be equal to or greater than what the value of our common stock would have been had the proposed spin-off not occurred.

In addition, investor sentiment could result in excess selling causing greater volatility in our share price following the consummation of the proposed spin-off.

Finally, if we fail to complete the spin-off, we may experience negative reactions from the financial markets.

| • | If the Wellsite spin-off, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, we and our shareholders could be subject to significant tax liabilities. |

A condition to the spin-off is the receipt by us of either (i) a private letter ruling from the Internal Revenue Service (the "IRS Ruling") together with an opinion of McDermott Will & Emery LLP, our tax counsel, substantially to the effect that, among other things, certain transactions to effect the spin-off will qualify as a tax-free reorganization for U.S. federal income tax purposes under Section 368(a)(1)(D) of the Internal Revenue Code (the “Code”), and the distribution will qualify as a tax-free distribution to our shareholders under Section 355 of the Code, or (ii) an opinion of McDermott Will & Emery LLP, our tax counsel, substantially to the effect that, among other things, certain transactions to effect the spin-off will qualify as a tax-free reorganization for U.S. federal income tax purposes under Section 368(a)(1)(D) of the Code and the distribution of shares of Wellsite will qualify as a tax-free distribution to our shareholders under Section 355 of the Code.

The IRS Ruling (if obtained) and the opinion of tax counsel will rely on certain facts and assumptions, and certain representations and undertakings from us and Wellsite, including those regarding the past and future conduct of certain of our businesses and other matters.

If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, we and our shareholders may not be able to rely on the IRS Ruling (if obtained) or the opinion, and could be subject to significant tax liabilities.

Notwithstanding the IRS Ruling (if obtained) and the opinion, the IRS could determine on audit that the distribution is taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions

in the opinion.

In addition, we and Wellsite intend for certain related transactions to qualify for tax-free treatment under U.S. federal, state and local tax law and/or foreign tax law.

If the distribution is determined to be taxable for U.S. federal income tax purposes, we and our shareholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities.

For example, if the distribution fails to qualify for tax-free treatment, we would, for U.S. federal income tax purposes, be treated as if we had sold the Wellsite common stock in a taxable sale for its fair market value, and our shareholders who are subject to U.S. federal income tax would be treated as receiving a taxable distribution in an amount equal to the fair market value of the Wellsite common stock received in the distribution.

In addition, if certain related transactions fail to qualify for tax-free treatment under U.S. federal, state and local tax law and/or foreign tax law, we could incur significant tax liabilities under U.S. federal, state, local and/or foreign tax law, respectively.

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

The success of new and improved products and services depends on their initial and continued acceptance by our customers.

Certain of our businesses sell their products and services in industries 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 with new products and services.

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 and to stimulate customer demand for, and convince customers to adopt, new products and 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 and/or marketing of new products and 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.

For example, during the fourth quarter of 2017, we recorded rightsizing and other related costs of $56.3 million to better align our cost structure in preparation for the Wellsite separation.

These rightsizing activities and our regular ongoing cost reduction

activities (including in connection with the integration of acquired businesses) may reduce our available talent, assets and other resources and could slow improvements in our products and services, adversely affect our ability to respond to customers and limit our ability to increase production quickly if demand for our products increases.

In addition, delays in implementing planned restructuring activities or other productivity improvements, unexpected costs or failure to meet targeted improvements may diminish the operational or financial benefits we expect to realize through our various programs.

Additionally, some of our products contain computer hardware and software and offer the ability to connect to computer networks.

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.

See Note 14 — Commitments and Contingent Liabilities in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional information.

their indemnification responsibilities.

| | |

| --- | --- |

Even the perception of longer-term lower oil and natural gas prices can reduce or defer major capital expenditures by our customers in the oil and gas industry.

For example, foreign exchange rates had an unfavorable impact on our revenue for the year ended December 31, 2016.

| • | Some of our businesses may not anticipate, adapt to, or capitalize on technological developments and this could cause these businesses to become less competitive and lead to reduced market share, revenue, operating profits and cash flows. |

Certain of our businesses sell their products in industries that are constantly experiencing change as new technologies are developed.

In order to grow and remain competitive in these industries, they must adapt to future changes in technology to enhance their existing products and introduce new products to address their customers’ changing demands.

If we are unable to reduce costs and expenses through our various programs, it could adversely affect our consolidated results of operations, financial condition and cash flows.

In addition, in connection with the spin-off, Knowles agreed to indemnify us for any losses relating to the conduct of the Knowles business.

Although fair values currently exceed carrying values in all of our businesses, the value of our businesses within the Energy segment were unfavorably impacted by the steep declines in revenue and order rates during the year as drilling and production activity fell due to unfavorable oil prices and lower U.S. rig counts.

| • | Customer requirements and new regulations may increase our expenses and impact the availability of certain raw materials, which could adversely affect our revenue and operating profits. |

Our businesses use parts or materials that are impacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") requirement for disclosure of the use of "conflict minerals" mined in the Democratic Republic of the Congo and adjoining countries.

It is possible that some of our businesses' customers will require "conflict free" metals in products purchased from us.

We are in the process of determining the country of origin of certain metals used by our businesses, as required by the Dodd-Frank Act.

The supply chain due diligence and verification of sources may require several years to complete based on the current availability of smelter origin information and the number of vendors.

We may not be able to complete the process in the time frame required because of the complexity of our supply chain.

Other governmental social responsibility regulations also may impact our suppliers, manufacturing operations and operating profits.

The need to find alternative sources for certain raw materials or products because of customer requirements and regulations may impact our ability to secure adequate supplies of raw materials or parts, lead to supply shortages, or adversely impact the prices at which our businesses can procure compliant goods.

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 three years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014.][added: 2015.]

Dover is a diversified global manufacturer delivering innovative equipment and components, specialty systems, consumable supplies, software and digital solutions and support services through four operating segments: [removed: Energy,] Engineered Systems, [removed: Fluids and] [added: Fluids,] Refrigeration & Food [removed: Equipment.][added: Equipment and Energy.]

For the year ended December 31, [removed: 2016,] [added: 2017,] consolidated revenue from continuing operations was [removed: $6.8] [added: $7.8] billion, [removed: a decrease] [added: an increase] of [removed: $0.2] [added: $1.0] billion or [removed: 2.3%,] [added: 15.2%,] as compared to the prior year.

This [removed: decrease] [added: increase] included [removed: a decline in] organic revenue [added: growth] of [removed: 5.4%, a 3.0% impact from dispositions] [added: 7.8%, acquisition-related growth of 9.7%] and [removed: an unfavorable] [added: a favorable] impact of [removed: 1.0%] [added: 0.4%] from foreign currency, partially offset by [removed: acquisition-related growth of 7.1%.][added: a 2.7% impact from dispositions.]

Overall, customer pricing had a [removed: minimal unfavorable] [added: favorable] impact of [removed: 0.2%] [added: 0.6%] on revenue for the year.

[removed: Our] Energy segment revenue [added: for the year ended December 31, 2016] decreased $375.2 million, or 25.3%, [removed: from] [added: compared to] the prior year, [removed: comprised] [added: composed] of an organic [removed: revenue] decline of 24.4% and an unfavorable impact from foreign currency translation of 0.9%.

The [removed: decline] [added: increase] in organic revenue within our Energy segment was [removed: largely attributable to a significantly lower] [added: driven primarily by increases in] U.S. rig count and [removed: end customer capital spending compared to the prior year.][added: well completions.]

[removed: Within our] Engineered Systems [removed: segment,] [added: segment] revenue [added: for the year ended December 31, 2016] increased $23.4 million, or 1.0%, [removed: from] [added: compared to] the prior year, primarily driven by organic growth of 1.7% and acquisition-related growth of [removed: 4.4%,] [added: 4.4% due to the acquisition of JK Group in the fourth quarter of 2015 and RAV in the fourth quarter of 2016,] partially offset by a 3.9% impact from [removed: a] disposition and an unfavorable impact from foreign currency [added: translation] of 1.2%.

[removed: Our] Fluids segment revenue [added: for the year ended December 31, 2016] increased $301.3 million, or 21.5%, [added: compared to the prior year,] comprised [removed: primarily] of acquisition-related growth of [removed: 27.8%,] [added: 27.8% primarily due to Tokheim and Wayne, partially] offset by an organic [added: revenue] decline of 5.1% and an unfavorable foreign currency [added: translation] impact of 0.9%.

The decline in organic revenue impacted [removed: both] the [removed: Fluids Transfer and] [added: Fueling & Transport,] Pumps [added: and Hygienic & Pharma] end markets as a result of weak longer cycle oil and gas markets and the associated effect of reduced capital spending by our customers.

Within our Refrigeration & Food Equipment segment, revenue decreased [removed: $111.1] [added: $21.2] million, or [removed: 6.4%,] [added: 1.3%,] from the prior year, including a [removed: 6.4%] [added: 5.1%] decline due to [removed: dispositions, an unfavorable impact from foreign currency translation of 0.2%,] [added: a disposition, partially] offset by [removed: modest] organic revenue growth of [removed: 0.2%.][added: 3.4% and a favorable impact from foreign currency translation of 0.4%.]

Gross profit was [removed: $2.5] [added: $2.9] billion for the year ended December 31, [removed: 2016, a decrease] [added: 2017, an increase] of [removed: $96.2] [added: $418.4] million, or [removed: 3.7%,] [added: 16.9%,] as compared to the prior year.

Gross profit margin was [removed: 36.4%] [added: 36.9%] for the year ended December 31, [removed: 2016] [added: 2017] compared to [removed: 36.9%] [added: 36.4%] for the prior year.

Bookings [removed: were flat] [added: increased 17.0%] over the prior year at [removed: $6.8] [added: $8.0] billion for the year ended December 31, [removed: 2016.][added: 2017.]

Included in this result was a [removed: 3.6% decline from] [added: 9.6% increase in] organic bookings, [removed: 3.1% decline due to dispositions] [added: a 9.8% increase in acquisition-related bookings] and [removed: 0.8% impact as] a [removed: result of unfavorable] [added: 0.2% favorable impact due to] foreign exchange rates, which were [added: partially] offset by [removed: 7.5% increase] [added: a 2.6% decline] due to [removed: acquisition-related bookings.][added: dispositions.]

Bookings [removed: declined 23.7%] [added: increased 35.7%, 30.7%] and [removed: 4.2%] [added: 11.6%] within our [added: Fluids,] Energy and [removed: Refrigeration & Food Equipment] [added: Engineered Systems] segments, respectively, while bookings in our [removed: Fluids and Engineered Systems segments increased 26.0% and 2.6%, respectively.][added: Refrigeration & Food Equipment segment decreased 3.8%.]

Overall, our book-to-bill [removed: remained flat] [added: increased] from the prior year [removed: at 1.00.][added: to 1.02.]

Backlog as of December 31, [removed: 2016] [added: 2017] was [removed: $1.1] [added: $1.2] billion, up from [removed: $994.6 million] [added: $1.1 billion] from the prior year.

For the full year [removed: 2016,] [added: 2017,] Dover made a total of [removed: six] [added: three] acquisitions [removed: for a] [added: totaling $43.1 million,] net [added: of] cash [removed: consideration totaling $1.6 billion.][added: acquired and including contingent consideration.]

See Note [removed: 2] [added: 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.

See Note [removed: 3] [added: 4] — Disposed and Discontinued Operations in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional information regarding these disposed businesses.

[removed: For the year ended December 31, 2016, we] [added: We also] continued our [added: long] history of increasing our annual dividend payments to shareholders and paid a total of [removed: $267.7] [added: $284.0] million in dividends to our shareholders.

| (dollars in thousands, except per share figures) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | | | [removed: 2015] [added: 2016] vs. [removed: 2014] [added: 2015] | |

| Revenue | | $ | [removed: 6,794,342] [added: 7,830,436] | | | $ | [removed: 6,956,311] [added: 6,794,342] | | | $ | [removed: 7,752,728] [added: 6,956,311] | | | [removed: (2.3] [added: 15.2] | [removed: )%] [added: %] | | [removed: (10.3] [added: (2.3] | )% |

| Cost of goods and services | | [removed: 4,322,373] [added: 4,940,059] | | | | [removed: 4,388,167] [added: 4,322,373] | | | | [removed: 4,778,479] [added: 4,388,167] | | | | [removed: (1.5] [added: 14.3] | [removed: )%] [added: %] | | [removed: (8.2] [added: (1.5] | )% |

| Gross profit | | [removed: 2,471,969] [added: 2,890,377] | | | | [removed: 2,568,144] [added: 2,471,969] | | | | [removed: 2,974,249] [added: 2,568,144] | | | | [removed: (3.7] [added: 16.9] | [removed: )%] [added: %] | | [removed: (13.7] [added: (3.7] | )% |

| Gross profit margin | | [removed: 36.4] [added: 36.9] | | % | | [removed: 36.9] [added: 36.4] | | % | | [removed: 38.4] [added: 36.9] | | % | | [removed: (0.5] [added: 0.5] | [removed: )] | | [removed: (1.5] [added: (0.5] | ) |

| Selling, general and administrative expenses | | [removed: 1,757,523] [added: 1,975,932] | | | | [removed: 1,647,382] [added: 1,757,523] | | | | [removed: 1,758,765] [added: 1,647,382] | | | | [removed: 6.7] [added: 12.4] | % | | [removed: (6.3] [added: 6.7] | [removed: )%] [added: %] |

| Selling, general and administrative expenses as a percent of revenue | | [removed: 25.9] [added: 25.2] | | % | | [removed: 23.7] [added: 25.9] | | % | | [removed: 22.7] [added: 23.7] | | % | | [removed: 2.2] [added: (0.7] | [added: )] | | [removed: 1.0] [added: 2.2] | |

| Interest expense | | [removed: 136,401] [added: 145,208] | | | | [removed: 131,676] [added: 136,401] | | | | [removed: 131,689] [added: 131,676] | | | | [removed: 3.6] [added: 6.5] | % | | [removed: —] [added: 3.6] | % |

| Interest income | | [removed: (6,759] [added: (8,502] | | ) | | [removed: (4,419] [added: (6,759] | | ) | | [removed: (4,510] [added: (4,419] | | ) | | [removed: 53.0] [added: 25.8] | % | | [removed: (2.0] [added: 53.0] | [removed: )%] [added: %] |

| Other [removed: income,] [added: expense (income),] net | | [removed: (7,930] [added: 7,034] | | [removed: )] | | [removed: (7,105] [added: (7,930] | | ) | | [removed: (5,902] [added: (7,105] | | ) | | [removed: 11.6] [added: (188.7] | [removed: %] [added: )%] | | [removed: 20.4] [added: 11.6] | % |

[removed: |] Gain on sale of businesses [removed: | | (96,598 | | ) | | — | | | | — | | | | nm* | | | nm* | |]

| Provision for income taxes | | [removed: 180,440] [added: 162,178] | | | | [removed: 204,729] [added: 180,440] | | | | [removed: 316,067] [added: 204,729] | | | | [removed: (11.9] [added: (10.1] | )% | | [removed: (35.2] [added: (11.9] | )% |

| Effective tax rate | | [removed: 26.2] [added: 16.7] | | % | | [removed: 25.6] [added: 26.2] | | % | | [removed: 28.9] [added: 25.6] | | % | | [removed: 0.6] [added: (9.5] | [added: )] | | [removed: (3.3] [added: 0.6] | [removed: )] |

| Earnings from continuing operations | | [removed: 508,892] [added: 811,665] | | | | [removed: 595,881] [added: 508,892] | | | | [removed: 778,140] [added: 595,881] | | | | [removed: (14.6] [added: 59.5] | [removed: )%] [added: %] | | [removed: (23.4] [added: (14.6] | )% |

| Earnings [removed: (loss)] from discontinued operations, net | | — | | | | [removed: 273,948] [added: —] | | | | [removed: (2,905] [added: 273,948] | | [removed: )] | | [removed: nm*] [added: —] | [added: %] | | nm* | |

| Earnings from continuing operations per common share - diluted | | [removed: $] [added: 5.15] | [removed: 3.25] | | | [removed: $] [added: 3.25] | [removed: 3.74] | | | $ | [removed: 4.61] [added: 3.74] | | | [removed: (13.1] [added: 58.5] | [removed: )%] [added: %] | | [removed: (18.9] [added: (13.1] | )% |

[removed: Acquisition] [added: Acquisition-related] growth of 7.1% was largely driven by the acquisitions of Tokheim [added: Group S.A.S. ("Tokheim")] and Wayne within our Fluids segment and RAV within our Engineered Systems segment, as well as the full-year benefit from the fourth quarter 2015 acquisitions.

Overall customer pricing was [removed: slightly unfavorable,] [added: favorable,] impacting consolidated revenue [removed: 0.2%.][added: 0.6%.]

OVERVIEW

Within our Engineered Systems segment, revenue increased $210.0 million, or 8.9%, from the prior year, reflecting organic growth of 5.6%, acquisition-related growth of 6.7% and a favorable impact from foreign currency of 0.9%, partially offset by a 4.3% impact from dispositions.

Organic growth was broad-based across both the Printing & Identification and Industrials platforms.

Our Fluids segment revenue increased $550.3 million, or 32.4%, comprised of acquisition-related growth of 29.3%, organic growth of 2.8% and a favorable foreign currency impact of 0.3%.

The organic growth was principally driven by industrial pump activity and solid hygienic and pharma markets partially offset by continued weakness in transport markets.

The organic growth was driven primarily by demand for refrigeration systems and heat exchangers in our Refrigeration business.

The increase was primarily due to the growth in sales volumes as well as the benefits of prior restructuring actions, and a reduction to a voluntary product recall accrual of $7.2 million compared to charge of $23.2 million in 2016.

From a geographic perspective, our U.S., European and China markets all grew organically year-over-year.

On December 7, 2017, we announced that our Board of Directors approved a plan to spin-off our upstream energy businesses within the our Energy segment, collectively, the “Wellsite” business, through a U.S. tax-free spin-off to shareholders.

We expect to complete the separation in May of 2018, subject to the satisfaction or waiver of certain customary conditions.

We have incurred $15.3 million of costs associated with the transaction which were recorded as a corporate expense in selling, general and administrative expenses in the Consolidated Statement of Earnings.

These transaction costs primarily relate to professional fees associated with preparation of regulatory filings and separation activities within finance, legal and information system functions.

Upon separation, the historical results of Wellsite will be presented as discontinued operations.

During the fourth quarter of 2017, we recorded rightsizing and other related costs of $56.3 million to better align our cost structure in preparation for the Wellsite separation.

The $56.3 million is comprised of $45.8 million of restructuring costs and $10.5 million of other charges.

These costs relate to actions taken on employee reductions, facility consolidations and site closures and product line divestitures and exits.

These charges were broad based across all segments as well as corporate, with costs incurred of $9.2 million in Engineered Systems, $8.2 million in Fluids, $15.3 million in Refrigeration & Food Equipment, $7.3 million in Energy and $16.3 million at Corporate.

These charges were recorded in cost of goods and services, selling, general and administrative expenses, gain on sale of businesses, and other expense (income), net in the Consolidated Statement of Earnings.

We recorded a net tax benefit of $50.9 million primarily relating to the enactment of the U.S. bill commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform Act”) during the fourth quarter of 2017.

The benefit was comprised of a $172.0 million benefit related to the re-measurement of deferred tax liabilities arising from a lower U.S. corporate tax rate, offset by a $115.0 million provisional tax expense related to the deemed repatriation of unremitted earnings of foreign subsidiaries and $11.0 million of anticipated local withholding tax expense associated with planned cash distributions to the U.S from non-U.S. subsidiaries.

The net tax benefit in the fourth quarter of 2017 also included a benefit of $4.9 million related to decreases in statutory tax rates of foreign jurisdictions.

On a full year basis, the effective tax rate for 2017 was 16.7%.

We completed the acquisition of Caldera Graphics S.A.S. ("Caldera") for approximately $32.9 million, net of cash acquired and including contingent consideration.

Caldera enhances our ability to serve the global digital textile printing market with their high-quality technical software designed for the digital printing industry.

Caldera is included in the Printing & Identification platform within the Engineered Systems segment.

Subsequently, in January 2018,we acquired Ettlinger Group, a leading manufacturer of filtering solutions for the plastics recycling industry, for €50.0 million (approximately $60.0 million) and Rosario Handel B.V., a manufacturer of decorator and base coating machinery used in the production of beverage, food and aerosol cans for €13.5 million (approximately $16.2 million).

These acquisitions enhance our ability to serve our respective markets within the Fluids and Refrigeration & Food Equipment segments.

In addition, in 2017, as part of the regular review of our portfolio and the fit of our businesses, we completed the divestitures of Performance Motorsports International ("PMI"), a manufacturer of pistons and other engine related components, and the consumer and industrial winch business of Warn Industries Inc. ("Warn"), both within our Engineered Systems segment.

We sold the PMI and Warn businesses for total consideration of $147.3 million and $250.3 million, respectively.

The disposition of PMI resulted in pre-tax gain on sale of $88.4 million, and we recorded a 25% equity method investment at fair value as well as a subordinated note receivable.

The disposition of Warn resulted in a pre-tax gain on sale of $116.9 million and we also recorded $5.2 million of disposition costs.

During the year ended December 31, 2017, we purchased 1.1 million shares of our common stock for a total cost of $105.0 million, or $99.11 per share.

| Gain on sale of businesses | | (203,138 | | ) | | (96,598 | | ) | | — | | | | nm* | | | nm* | |

| Earnings from discontinued operations per common share -diluted | | $ | — | | | $ | — | | | $ | 1.72 | | | — | % | | nm* | |

Growth in organic revenue was largely driven by improved market conditions in U.S. oil and gas-related end markets for the Energy segment, as well as strong broad-based activity in the Engineered Systems segment.

Organic growth also reflected strong shipments in our Pumps and Hygienic & Pharma businesses in the Fluids segment and solid retail refrigeration activity in the Refrigeration & Food Equipment segment.

Acquisition-related growth of 9.7% was led by the Fluids and Engineered Systems segments, largely due to the full-year benefit from the 2016 acquisitions of Wayne Fueling Systems Ltd. ("Wayne") within our Fluids segment and Ravaglioli S.p.A Group ("RAV") within our Engineered Systems segment, as well as the 2017 acquisition of Caldera Graphics S.A.S. ("Caldera") within our Engineered Systems segment.

For the year ended December 31, 2017, gross profit increased $418.4 million, or 16.9%, to $2.9 billion compared with 2016, primarily due to growth in sales volumes and benefits of prior restructuring actions, as well as a reduction of a product recall accrual of $7.2 million compared to a fourth quarter 2016 charge of $23.2 million.

Gross profit margin increased 50 basis points primarily due to margin improvements in our Engineered Systems and Energy segments.

For the year ended December 31, 2017, selling, general and administrative expenses increased $218.4 million, or 12.4% to $2.0 billion compared with 2016, primarily reflecting the impact of acquisitions in 2016, including acquisition-related amortization expense of $15.7 million, Wellsite separation costs of $15.3 million, higher restructuring charges of $10.8 million, disposition-related costs for Warn of $5.2 million and increased compensation costs.

OVERVIEW AND OUTLOOK

Organic growth was primarily driven by strong markets in our Printing & Identification platform.

The decrease was primarily a result of the decline in revenue partially offset by supply chain cost containment initiatives and the benefits of prior restructuring actions.

From a geographic perspective, our US activity, excluding Energy, was flat year-over-year, on an organic basis.

Including Energy, our U.S. activity declined due to weakness in oil and gas-related end markets.

Both European and China activities improved year-over-year on an organic basis.

During the year we continued to adjust our cost structure to better align with the current economic environment resulting in full year 2016 restructuring charges of $40.2 million.

These actions were concentrated within our Energy and Fluids segments with charges of $18.5 million and $16.9 million, respectively, for the year ended December 31, 2016.

We completed the acquisition of the dispenser and system businesses of Tokheim Group S.A.S ("Tokheim") in the first quarter of 2016, as well as the acquisitions of Fairbanks Environmental LTD and ProGauge in the retail fueling space in the second quarter of 2016.

These businesses joined our Fluids segment.

In the third quarter of 2016, we also acquired Alliance Wireless Technologies, Inc. ("AWTI") in the Engineered Systems segment.

During the fourth quarter of 2016, the Company completed the acquisitions of Ravaglioli S.p.A.

Group ("RAV"), a provider of automotive service equipment, and Wayne Fueling Systems Ltd. ("Wayne"), a provider of fuel dispensing, payment systems and monitoring and optimization software for retail and commercial fuel stations.

These acquisitions were acquired to complement and expand upon existing operations within the Engineered Systems and Fluids segments, respectively.

In addition, in 2016, as part of the regular review of our portfolio and the fit of our businesses, we completed the divestitures of the Texas Hydraulics and Tipper Tie businesses.

Upon disposal of these businesses, we recognized total proceeds for Texas Hydraulics and Tipper Tie of $47.3 million and $158.9 million, which resulted in an after-tax gain on sale of $11.2 million and $57.0 million, respectively.

Looking Forward

In 2017, we expect total consolidated revenue growth of 10% to 12% as compared to 2016.

This increase will be comprised of growth from acquisitions of approximately 10%, organic revenue growth of 3% to 5%, partially offset by the impact from dispositions of approximately 1% and a negative impact from foreign currency translation of approximately 2%.

We expect all of our segments to contribute to our overall organic growth.

Within the Energy segment, we are encouraged by the recovery in the North American rig count and oil prices and have developed our full year estimate on an average U.S. rig count of 680 to 700 and an average price per barrel of oil of approximately $55.

We anticipate corporate expense in 2017 to be approximately $125 million, up $12 million from current year results, primarily reflecting increases in compensation and increased investments as we further implement Dover Business Services ("DBS") across the company.

We expect to generate free cash flow in 2017 of approximately 11% of revenue.

In total, we expect full year diluted earnings per share from continuing operations ("EPS") to be in the range of $3.40 to $3.60.

Our 2017 guidance includes the impact of disposed businesses, the net benefit from restructuring activities and the impact of foreign currency translation.

Acquisition growth was largely driven by the acquisitions of JK Group within our Engineered Systems segment and Gala Industries and Reduction Engineering Scheer within our Fluids segment.

For the year ended December 31, 2015, our gross profit decreased $406.1 million, or 13.7% to $2.6 billion compared with 2014, primarily due to the significant decline in organic sales volumes, especially in our Energy segment, partially offset by supply chain cost containment initiatives and the benefits of prior restructuring actions.

Gross profit margin declined 150 basis points due to an unfavorable product mix as those businesses with historically higher margin contributions experienced significant revenue declines.

For the year ended December 31, 2015, selling, general and administrative expenses decreased $111.4 million, or 6.3% to $1.6 billion compared with 2014 reflecting the impact of cost savings realized as the result of restructuring programs and reduced discretionary spending.

As a percentage of revenue, selling, general and administrative expenses increased 100 basis points in 2015 to 23.7%, reflecting deleveraging of fixed administrative costs, particularly within the Energy segment.

Additionally, higher restructuring costs of $8.9 million in 2015 as compared to 2014 also contributed to higher selling, general and administrative expenses relative to the revenue base.

For the year ended December 31, 2015, interest expense, net of interest income, remained relatively flat at $127.3 million compared with 2014 due to higher interest rates on commercial paper year over year offset by lower interest on the Euro-denominated debt and on the $400.0 million notes issued in October 2015.

The foreign exchange losses in 2015 and 2014 were more than offset by other nonrecurring items including income due to insurance settlements for property damage of $3.6 million and $5.1 million, respectively.

The 2016 and 2015 rates were impacted by $13.6 million and $17.5 million of favorable net discrete items, principally resulting from the adjustment of the tax accounts to the U.S. tax return filed and settlements of uncertain tax matters, respectively.

After adjusting for discrete items, our effective tax rates were 28.1% and 27.8% for the years ended December 31, 2016 and 2015, respectively.

Some portion of such change may be reported as discontinued operations.

After adjusting for discrete and other items, the effective tax rate for the year ended December 31, 2014 was 29.9%.

These results include discrete tax benefits of $17.5 million, or $0.11 EPS, in 2015 and $11.3 million, or $0.07 EPS, in 2014.

Excluding these discrete tax benefits, earnings from continuing operations decreased 24.6% primarily due to lower revenues and additional restructuring charges, partially offset by benefits from productivity and cost containment initiatives.

EPS decreased in 2015 as a result of lower earnings, partially offset by lower weighted average shares outstanding relative to 2014 due to approximately eight million shares repurchased during the year.

Dover Corporation is a diversified global manufacturer delivering innovative equipment and components, specialty systems, consumable supplies, software and digital solutions and support services through four operating segments: [removed: Energy,] Engineered Systems, [removed: Fluids and] [added: Fluids,] Refrigeration & Food [removed: Equipment.][added: Equipment and Energy.]

| • | Our Engineered Systems segment is comprised of two platforms, Printing & Identification and Industrials and is focused on the design, manufacture and service of critical [removed: equipment] [added: equipment, consumables] and components serving the fast-moving consumer goods, digital textile printing, vehicle service, environmental solutions and industrial end markets. |

The following table shows the percentage of total revenue and segment earnings generated by each of our four operating segments for the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014:][added: 2015:]

| | [added: 2017 | | |] 2016 | | | 2015 | | | [removed: 2014] [added: 2017] | | | 2016 | | | 2015 | | [removed: | 2014 | |]

| Energy | [removed: 16] [added: 18] | % | | [removed: 21] [added: 16] | % | | [removed: 26] [added: 21] | % | | [removed: 6] [added: 15] | % | | [removed: 17] [added: 6] | % | | [removed: 34] [added: 17] | % |

| Engineered Systems | [removed: 35] [added: 33] | % | | [removed: 34] [added: 35] | % | | [removed: 31] [added: 34] | % | | [removed: 42] [added: 46] | % | | [removed: 36] [added: 42] | % | | [removed: 29] [added: 36] | % |

| Fluids | [removed: 25] [added: 29] | % | | [removed: 20] [added: 25] | % | | [removed: 18] [added: 20] | % | | [removed: 22] [added: 24] | % | | [removed: 26] [added: 22] | % | | [removed: 19] [added: 26] | % |

| Refrigeration & Food Equipment | [removed: 24] [added: 20] | % | | [removed: 25] [added: 24] | % | | 25 | % | | [removed: 30] [added: 15] | % | | [removed: 21] [added: 30] | % | | [removed: 18] [added: 21] | % |

Our businesses are committed to operational excellence and to being market leaders as measured by market share, customer [removed: service,] [added: satisfaction,] growth, profitability and return on invested capital.

Our segment and executive management set strategic direction, initiatives and goals [added: and provide oversight] for our operating companies and also [removed: provide oversight,] allocate and manage capital, are responsible for major acquisitions and provide other services.

Most notably, we believe that product innovations like the [removed: Spirit Genesis Pump Off Controller within our Energy segment, CNrG tailgate] [added: LaRio single-pass digital textile printer] within our Engineered Systems segment, EvoClean laundry system within our Fluids [removed: segment and] [added: segment,] AdvansorFlex CO2 refrigeration system and Vista Elite Cooler Door within our Refrigeration & Food Equipment segment [added: and Spirit Genesis Pump Off Controller within our Energy segment] help to make a positive difference for the environment while providing value to shareholders and customers.

Our [added: operating] companies are increasing their focus on efficient energy usage, greenhouse gas reduction and waste management as they strive to meet the global environmental needs of today and tomorrow.

Third, we are committed to generating [added: adjusted] free cash flow as a percentage of sales of approximately [removed: 11%] [added: 10%] through strong earnings performance, productivity improvements and active working capital management.

Our Energy segment is focusing on expansion in high growth [removed: regions] [added: basins] and technologies, accelerating capabilities to drive international growth and increasing investment in [removed: innovation] [added: automation] to drive customer productivity and cash flow.

Our Engineered Systems segment combines its engineering [removed: technology,] [added: technology and capabilities,] unique product advantages and applications expertise to address market needs and requirements including conversion to digital textile printing, productivity solutions, sustainability, consumer product safety and growth in emerging economies.

[removed: In particular, we are pursuing further growth] in the retail fueling, hygienic and pharma and polymers/plastics markets.

[removed: This program focuses] [added: Through formalized company sponsored programs and an embedded culture of continuous improvement, we focus] on [added: adjusted] free cash flow generation, productivity to support ongoing investment in product innovation and customer expansion activities, the continuous evaluation of operating efficiencies and the continued consolidation of back office support.

Through [removed: this program] [added: these programs] we have implemented various productivity initiatives, such as supply chain management and lean manufacturing, to maximize our efficiency as well as workplace safety initiatives to help ensure the health and welfare of our employees.

Additionally in 2016, we began to invest in our Dover Business Services ("DBS") shared service centers which [removed: will bring] [added: brings] significant value to Dover by providing important transactional and value added services to our operating companies in the areas of finance, information technology and human resources.

Our businesses generate annual [added: adjusted] free cash flow of approximately 10% [removed: to 11%] of revenue.

We are focused on the most efficient allocation of our capital to maximize [removed: investment returns.][added: returns on investment.]

Businesses in our portfolio are continually evaluated for strategic fit and our acquisitions are targeted in our key growth markets which include printing and identification, refrigeration and food equipment, [removed: pumps] [added: pumps, fueling] and [removed: fluid transfer] [added: transport, hygienic] and [added: pharma and] select energy markets.

We consistently [removed: provide shareholder returns] [added: return cash to shareholders] by paying dividends, which have increased annually over each of the last [removed: 61] [added: 62] years.

We will also [removed: consider opportunistic] [added: plan to complete $1 billion of] share repurchases [added: by the end of 2018] as part of our capital allocation [removed: strategy to offset the impact of dilution.][added: strategy.]

Over the past three years [removed: (2014] [added: (2015] through [removed: 2016),] [added: 2017),] we have spent over [removed: $2.9] [added: $2.2] billion to purchase [removed: 17] [added: 13] businesses.

During 2016, we acquired six businesses for an aggregate [removed: consideration] [added: purchase price] of $1.6 billion, net of cash acquired.

These businesses include Gala Industries and Reduction Engineering Scheer, [removed: expanding] [added: to expand] our Fluids segment's plastics and polymers product and integrated systems portfolio.

In addition, [added: in 2015,] we acquired JK Group, a global manufacturer and provider of innovative digital inks for the textile printing market, [removed: which complements] [added: to complement] the Printing & Identification platform within our Engineered Systems segment.

For more details regarding acquisitions completed over the past two years, see Note [removed: 2] [added: 3] — Acquisitions in the Consolidated Financial Statements in Item 8 of this Form 10-K.

Our future growth depends in large part on finding and acquiring successful [removed: businesses.][added: businesses which expand the scope of our offering and make us a more important supplier to our customers.]

During the past three years [removed: (2014] [added: (2015] through [removed: 2016)] [added: 2017)] we have sold [removed: six] [added: seven] businesses for aggregate consideration of [removed: $1.1] [added: $1.3] billion.

These disposals did not represent strategic [added: shifts in operations and, therefore, did not qualify for presentation as discontinued operations.]

[added: These disposals did not represent strategic] shifts in operations and, therefore, did not qualify for presentation as discontinued operations.

For more details, see Note [removed: 3] [added: 4] — Disposed and Discontinued Operations in the Consolidated Financial Statements in Item 8 of this Form 10-K.

[removed: Spin-Off] [added: Spin-off] of [removed: Knowles][added: Energy Businesses]

As noted previously, we currently operate through four business segments that are aligned with the key end markets they serve and comprise our operating and reportable segments: [removed: Energy,] Engineered Systems, [removed: Fluids and] [added: Fluids,] Refrigeration & Food [removed: Equipment.][added: Equipment and Energy.]

For financial information about our segments and geographic areas, see Note [removed: 16] [added: 17] — Segment Information in the Consolidated Financial Statements in Item 8 of this Form 10-K.

| • | Printing & Identification – Printing & Identification is a worldwide supplier of precision marking and coding, digital textile printing, soldering and dispensing equipment and related consumables and services. Our Printing & Identification platform primarily designs and manufactures equipment and consumables used for printing variable information (such as bar coding of dates and serial numbers) on fast moving consumer goods, capitalizing on expanding food and product [removed: safety requirements and growth in emerging markets. In addition, our businesses serving the textile market are benefiting from a significant shift from analog to digital printing, resulting from shorter runs and more complex fashion designs, as well as increasing regulatory and environmental standards.] |

Engineered Systems' products are manufactured primarily in the United [removed: States and] [added: States,] Europe and [added: Asia and] are sold throughout the world directly and through a network of distributors.

The segment serves [removed: two] [added: three] broad global end markets: [removed: Fluid Transfer] [added: Fueling & Transport, Pumps,] and [removed: Pumps.][added: Hygienic & Pharma.]

On December 7, 2017, we announced that we plan to spin-off, on a tax-free basis, our upstream energy businesses within our Energy segment, collectively, the “Wellsite” business, into a standalone, publicly traded company, to be named at a later date.

Upon completion of the spin-off, Wellsite will be a leading provider of a full range of oil and gas production technologies and solutions, wellsite productivity software and Industrial Internet ("IIoT") solutions.

Wellsite will also be the industry leader in the development and production of polycrystalline diamond cutters used for oil and gas exploration.

Wellsite serves many of the most attractive segments in the oil and gas industry with its portfolio of leading brands including Norris, Harbison-Fischer, Accelerated, PCS Ferguson, Norriseal-Wellmark, Spirit, Quartzdyne, Windrock and USS.

We expect to complete the spin-off of the Wellsite businesses in May of 2018, subject to the satisfaction or waiver of certain customary conditions.

Upon separation, the historical results of Wellsite will be presented as discontinued operations as it represents a strategic shift in operations with a material impact to the Consolidated Financial Statements.

As part of the spin-off, Wellsite is expected to raise $700 million to $800 million of new debt, the proceeds of which will be paid to Dover in the form of a dividend.

We anticipate returning the proceeds to shareholders as the primary source of funding for $1 billion of share repurchases to be completed by the end of 2018.

In particular, we are pursuing further growth

We are committed to operational excellence and capturing the benefits of common ownership.

With all our acquisitions, we seek businesses that have an accretive margin and a strong organic growth profile, and also offer significant synergy opportunities.

During 2017, we acquired three businesses for an aggregate consideration of $43.1 million, net of cash acquired and including contingent consideration.

These businesses were acquired to complement and expand upon existing operations within the Engineered Systems and Fluids segments.

During 2017, we completed the sale of Performance Motorsports International and the consumer and industrial winch business of Warn Industries, within the Engineered Systems segment, as well as other smaller divestitures.

safety requirements and growth in emerging markets.

In addition, our businesses serving the textile market are benefiting from a significant shift from analog to digital printing, resulting from shorter runs and more complex fashion designs, as well as increasing regulatory and environmental standards.

We strive to optimize safety, efficiency, reliability, and environmental sustainability through innovative fluid handling and information management solutions.

| • | Hygienic & Pharma – Our businesses specialize in the manufacturing of connectors for use in a variety of bio-processing, medical, and specialty applications, along with the production of pumps specifically designed to address the biotech/pharmaceutical industry. Within this framework, we have a strong presence in the markets for sterile connect/disconnect products used in bioprocessing, reusable or disposable air and fluid handling medical applications, and various couplings to suit the industrial/electronic connector market. |

| | |

| --- | --- |

| | | Pumps | | IDEX Corporation (Viking), Ingersoll Rand, ITT, SPX Corporation (Waukesha), Accudyne Industries (Milton Roy), Nordson Corporation |

| | | Hygienic & Pharma | | Seko, Ecolab, Dosatron, Merck Millipore, Danaher Corporation (Pall), Nordson Corporation |

"Risk Factors." For additional details regarding our non-U.S. revenue and

We are committed to operational excellence through our Dover Excellence ("DEx") program.

We have also developed regional support centers and shared manufacturing centers in the United States, China, Brazil and India.

During 2014, we acquired seven businesses for an aggregate purchase price of $802.3 million, net of cash acquired, including Accelerated Companies LLC, expanding our artificial lift footprint within our Energy segment.

We expect to make further dispositions in the future, none of which, individually, are expected to be significant.

In addition, in February 2014, we divested of a significant portion of our technology business with the spin-off of Knowles Corporation ("Knowles") as discussed below.

On February 28, 2014, we completed the separation of Knowles from Dover through the pro rata distribution of 100% of the common stock of Knowles to Dover's stockholders of record as of the close of business on February 19, 2014.

Each Dover shareholder received one share of Knowles common stock for every two shares of Dover common stock held as of the record date.

As a result, Knowles became an independent, publicly traded company listed on the New York Stock Exchange, and Dover retains no ownership interest in Knowles.

The distribution was structured to be tax-free to Dover and its shareholders for U.S. federal income tax purposes.

| | | Pumps | | IDEX Corp, Ingersoll Rand, ITT, SPX Corp. |

| Total percentage of revenue derived from customers outside of the United States | 42 | % | | 39 | % | | 40 | % |

At December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] we have reserves totaling [removed: $30.0] [added: $35.4] million and [removed: $30.6] [added: $30.0] million, respectively, for environmental and other matters, including private party claims for exposure to hazardous substances, that are probable and estimable.

The Company has reserves for other legal matters that are probable and estimable and at December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] these reserves are not significant.

For fiscal year ended December 31, [removed: 2016][added: 2017]

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting company” [added: and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of the close of business on June 30, [removed: 2016] [added: 2017] was [removed: $10,669,106,014.][added: $12,394,317,137.]

The registrant’s closing price as reported on the New York Stock Exchange-Composite Transactions for June 30, [removed: 2016] [added: 2017] was [removed: $69.32] [added: $80.22] per share.

The number of outstanding shares of the registrant’s common stock as of January [removed: 27, 2017] [added: 26, 2018] was [removed: 155,502,313.][added: 154,424,436.]

Documents Incorporated by Reference: Part III — Certain Portions of the Proxy Statement for Annual Meeting of Shareholders to be held on May 5, [removed: 2017] [added: 2018] (the [removed: “2017] [added: “2018] Proxy Statement”).

Such statements concern future events and may be indicated by words or phrases such as [added: "may,"] "anticipates," "expects," "believes," "suggests," "will," "plans," "should," "would," "could," and "forecast," or the use of the future tense and similar words or phrases.

Forward-looking statements address matters that are uncertain, including, by way of example only: [added: the planned spin-off of the upstream energy businesses within our Energy segment, including the benefits of such transaction and the expected performance following the completion of the planned spin-off,] operating and strategic plans, future sales, earnings, cash flows, margins, organic growth, growth from acquisitions, restructuring charges, cost structure, capital expenditures, capital allocation, capital structure, dividends, [removed: cash flows,] exchange rates, tax rates, interest rates, interest expense, changes in operations and trends in industries in which our businesses operate, anticipated market conditions and our positioning, global economies, and operating improvements.

[removed: Forward-looking statements are subject to inherent risks and uncertainties that] [added: These factors] could cause actual results to differ materially from current [removed: expectations, including,] [added: expectations and include,] but [added: are] not limited to, [added: uncertainties as to whether the spin-off will be completed; the possibility that closing conditions for the spin-off may not be satisfied or waived; the impact of the separation transaction on Dover and the upstream energy businesses on a standalone basis if the spin-off is completed; whether the strategic benefits of separation can be achieved;] economic conditions generally and changes in economic conditions globally and in the markets and industries served by our businesses, including oil and gas activity and U.S. industrials activity; conditions and events affecting domestic and global financial and capital markets; oil and natural gas demand, production growth, and prices; changes in exploration and production spending by our customers and changes in the level of oil and natural gas exploration and development; changes in customer demand and capital spending; risks related to our international operations and the ability of our businesses to expand into new geographic markets; the impact of interest rate and currency exchange rate fluctuations; increased competition and pricing pressures; the impact of loss of a significant customer, or loss or non-renewal of significant contracts; the ability of our businesses to adapt to technological developments; the ability of our businesses to develop and launch new products, timing of such launches and risks relating to market acceptance by customers; the relative mix of products and services which impacts margins and operating efficiencies; the impact of loss of a single-source manufacturing facility; short-term capacity constraints; domestic and foreign governmental and public policy changes or developments, including import/export laws and sanctions, tax policies, environmental regulations and conflict minerals disclosure requirements; increases in the cost of raw materials; our ability to identify and successfully consummate value-adding acquisition opportunities or planned divestitures, and to realize anticipated earnings and synergies from acquired businesses and joint ventures; our ability to achieve expected savings from integration and other cost-control initiatives, such as lean and productivity programs as well as efforts to reduce sourcing input costs; the impact of legal compliance risks and litigation, including product recalls; indemnification obligations related to acquired or divested businesses; cybersecurity and privacy risks; protection and validity of patent and other intellectual property rights; goodwill or intangible asset impairment charges; a downgrade in our credit ratings which, among other matters, could make obtaining financing more difficult and costly; and work stoppages, union and works council campaigns and other labor disputes which could impact our productivity.

| [Item [removed: 1.](#sCF391C0CA2415028A119FDBF7125BEE2)] [added: 1.](#sE8E224F61E945E6DA9D0B6F7366BFD5E)] | [removed: [Business](#sCF391C0CA2415028A119FDBF7125BEE2)] [added: [Business](#sE8E224F61E945E6DA9D0B6F7366BFD5E)] | [removed: [3](#sCF391C0CA2415028A119FDBF7125BEE2)] [added: [3](#sE8E224F61E945E6DA9D0B6F7366BFD5E)] |

| [Item [removed: 1A.](#sCF3611814A0953FCB094E33D88F6146D)] [added: 1A.](#s264236B240A0562F969E287706E544C3)] | [Risk [removed: Factors](#sCF3611814A0953FCB094E33D88F6146D)] [added: Factors](#s264236B240A0562F969E287706E544C3)] | [removed: [12](#sCF3611814A0953FCB094E33D88F6146D)] [added: [12](#s264236B240A0562F969E287706E544C3)] |

| [Item [removed: 1B.](#s0CAF70998A545379B54DEBF80D2CB31F)] [added: 1B.](#s3C032060E99D5712B71C81A142532812)] | [Unresolved Staff [removed: Comments](#s0CAF70998A545379B54DEBF80D2CB31F)] [added: Comments](#s3C032060E99D5712B71C81A142532812)] | [removed: [17](#s0CAF70998A545379B54DEBF80D2CB31F)] [added: [18](#s3C032060E99D5712B71C81A142532812)] |

| [Item [removed: 2.](#s65CEAC67B66A5942A242B41BA006DF42)] [added: 2.](#s67536E0EC2A0516CA8659D25D2B059AA)] | [removed: [Properties](#s65CEAC67B66A5942A242B41BA006DF42)] [added: [Properties](#s67536E0EC2A0516CA8659D25D2B059AA)] | [removed: [18](#s65CEAC67B66A5942A242B41BA006DF42)] [added: [19](#s67536E0EC2A0516CA8659D25D2B059AA)] |

| [Item [removed: 3.](#s801BF83093375397A35B5C5514B86A43)] [added: 3.](#s51C83180AF56568DAFA2B7DE2C47B155)] | [Legal [removed: Proceedings](#s801BF83093375397A35B5C5514B86A43)] [added: Proceedings](#s51C83180AF56568DAFA2B7DE2C47B155)] | [removed: [18](#s801BF83093375397A35B5C5514B86A43)] [added: [19](#s51C83180AF56568DAFA2B7DE2C47B155)] |

| [Item [removed: 4.](#s230B05B717CE53A9AAD479286C0A63C9)] [added: 4.](#s551B4B6F71D55BEFA3824E77EC9C87EB)] | [Mine Safety [removed: Disclosures](#s230B05B717CE53A9AAD479286C0A63C9)] [added: Disclosures](#s551B4B6F71D55BEFA3824E77EC9C87EB)] | [removed: [18](#s230B05B717CE53A9AAD479286C0A63C9)] [added: [19](#s551B4B6F71D55BEFA3824E77EC9C87EB)] |

| | [Executive Officers of the [removed: Registrant](#s616EDAAF488F5031AF8E4F0CDB304152)] [added: Registrant](#sBA459BAED0365D1EB892B829EE71D6B0)] | [removed: [19](#s616EDAAF488F5031AF8E4F0CDB304152)] [added: [20](#sBA459BAED0365D1EB892B829EE71D6B0)] |

| [Item [removed: 5.](#sA1D5EF777DB1548290C482F9145BEF1B)] [added: 5.](#sD22F49D4388255FCA64370EC7965E875)] | [Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#sA1D5EF777DB1548290C482F9145BEF1B)] [added: Securities](#sD22F49D4388255FCA64370EC7965E875)] | [removed: [21](#sA1D5EF777DB1548290C482F9145BEF1B)] [added: [22](#sD22F49D4388255FCA64370EC7965E875)] |

| [Item [removed: 6.](#s081873355AC159CFA0F2B434C004DDC9)] [added: 6.](#s2A8D8A5EAFF8567E8615168B6EA98693)] | [Selected Financial [removed: Data](#s081873355AC159CFA0F2B434C004DDC9)] [added: Data](#s2A8D8A5EAFF8567E8615168B6EA98693)] | [removed: [23](#s081873355AC159CFA0F2B434C004DDC9)] [added: [24](#s2A8D8A5EAFF8567E8615168B6EA98693)] |

| [Item [removed: 7.](#sD57417637A2B548F84BEA7F4B1CFF0DD)] [added: 7.](#sEE8FB65AF69951B28F64DE5B1A440DB9)] | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD57417637A2B548F84BEA7F4B1CFF0DD)] [added: Operations](#sEE8FB65AF69951B28F64DE5B1A440DB9)] | [removed: [24](#sD57417637A2B548F84BEA7F4B1CFF0DD)] [added: [25](#sEE8FB65AF69951B28F64DE5B1A440DB9)] |

| [Item [removed: 7A.](#s0F0E995C96395BD7A6F32E4DBE75A372)] [added: 7A.](#s4C37498B1AEC560BA7B6FBB70EBA5136)] | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s0F0E995C96395BD7A6F32E4DBE75A372)] [added: Risk](#s4C37498B1AEC560BA7B6FBB70EBA5136)] | [removed: [48](#s0F0E995C96395BD7A6F32E4DBE75A372)] [added: [49](#s4C37498B1AEC560BA7B6FBB70EBA5136)] |

| [Item [removed: 8.](#s7D4B6B9FDE5E5A3EAE25E278C82C8603)] [added: 8.](#sD4DA164880545D8F88E1A1BB29DBC846)] | [Financial Statements and Supplementary [removed: Data](#s7D4B6B9FDE5E5A3EAE25E278C82C8603)] [added: Data](#sD4DA164880545D8F88E1A1BB29DBC846)] | [removed: [49](#s7D4B6B9FDE5E5A3EAE25E278C82C8603)] [added: [50](#sD4DA164880545D8F88E1A1BB29DBC846)] |

| [Item [removed: 9.](#s24EC481111315799AA2865B2F7980CC0)] [added: 9.](#s07B465841D8A5581B3C15C1538F5125B)] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s24EC481111315799AA2865B2F7980CC0)] [added: Disclosure](#s07B465841D8A5581B3C15C1538F5125B)] | [removed: [96](#s24EC481111315799AA2865B2F7980CC0)] [added: [96](#s07B465841D8A5581B3C15C1538F5125B)] |

| [Item [removed: 9A.](#s3B5E95F2E5255377A127C9282137F758)] [added: 9A.](#s8306DC50318953E6BBF1DA7BC745B289)] | [Controls and [removed: Procedures](#s3B5E95F2E5255377A127C9282137F758)] [added: Procedures](#s8306DC50318953E6BBF1DA7BC745B289)] | [removed: [96](#s3B5E95F2E5255377A127C9282137F758)] [added: [96](#s8306DC50318953E6BBF1DA7BC745B289)] |

| [Item [removed: 9B.](#sC0EFDA5B01275FE5A49CACA83D142918)] [added: 9B.](#sE18CC8A653C85941BEE526CCBA430204)] | [Other [removed: Information](#sC0EFDA5B01275FE5A49CACA83D142918)] [added: Information](#sE18CC8A653C85941BEE526CCBA430204)] | [removed: [96](#sC0EFDA5B01275FE5A49CACA83D142918)] [added: [96](#sE18CC8A653C85941BEE526CCBA430204)] |

| [PART [removed: III](#sE095D944CFC455ECBC222366F1DACA33)] [added: III](#s060F6B20E1515092AE7B5F25D473D541)] | | |

| [Item [removed: 10.](#sB3B7C685E05F5768A8CB689098DD3F40)] [added: 10.](#s639E0606846254008FEFD1A0BFF7257F)] | [Directors and Executive Officers and Corporate [removed: Governance](#sB3B7C685E05F5768A8CB689098DD3F40)] [added: Governance](#s639E0606846254008FEFD1A0BFF7257F)] | [removed: [97](#sB3B7C685E05F5768A8CB689098DD3F40)] [added: [98](#s639E0606846254008FEFD1A0BFF7257F)] |

| [Item [removed: 11.](#s895F77AC45805DECB7B191E6A425E45E)] [added: 11.](#s2B94FA0879C05418B4EAB2FD368B7408)] | [Executive [removed: Compensation](#s895F77AC45805DECB7B191E6A425E45E)] [added: Compensation](#s2B94FA0879C05418B4EAB2FD368B7408)] | [removed: [98](#s895F77AC45805DECB7B191E6A425E45E)] [added: [99](#s2B94FA0879C05418B4EAB2FD368B7408)] |

| [Item [removed: 12.](#s1098DD72DF46510F8E7478F9A310DF9E)] [added: 12.](#s2FEB0C94F40F5AB890074CAC3876278D)] | [Security Ownership of certain Beneficial Owners and Management and Related Shareholder [removed: Matters](#s1098DD72DF46510F8E7478F9A310DF9E)] [added: Matters](#s2FEB0C94F40F5AB890074CAC3876278D)] | [removed: [98](#s1098DD72DF46510F8E7478F9A310DF9E)] [added: [99](#s2FEB0C94F40F5AB890074CAC3876278D)] |

| [Item [removed: 13.](#s9DFBEB64AFA7597F8B73F0F859FB515B)] [added: 13.](#sE75195DB85A959BD8F204080FAB8D918)] | [Certain Relationships and Related Transactions and Director [removed: Independence](#s9DFBEB64AFA7597F8B73F0F859FB515B)] [added: Independence](#sE75195DB85A959BD8F204080FAB8D918)] | [removed: [99](#s9DFBEB64AFA7597F8B73F0F859FB515B)] [added: [100](#sE75195DB85A959BD8F204080FAB8D918)] |

| [Item [removed: 14](#sD3F5676FE24257F59A4A3B0C802C3AFA).] [added: 14](#s4775AF031623587CA1668243906AA0F4).] | [Principal Accountant Fees and [removed: Services](#sD3F5676FE24257F59A4A3B0C802C3AFA)] [added: Services](#s4775AF031623587CA1668243906AA0F4)] | [removed: [99](#sD3F5676FE24257F59A4A3B0C802C3AFA)] [added: [100](#s4775AF031623587CA1668243906AA0F4)] |

| [Item [removed: 15.](#s2C107A329DA252D59E0FD36BB13CFCCC)] [added: 15.](#sB10C1038C5DD562B994353F7D5B824EA)] | [Exhibits, Financial Statement [removed: Schedules](#s2C107A329DA252D59E0FD36BB13CFCCC)] [added: Schedules](#sB10C1038C5DD562B994353F7D5B824EA)] | [removed: [99](#s2C107A329DA252D59E0FD36BB13CFCCC)] [added: [100](#sB10C1038C5DD562B994353F7D5B824EA)] |

| [Item [removed: 16.](#s45bfbed012fd44a7b856fce726bd399a)] [added: 16.](#s4EEA2E7A524455F2B2F838A286E05D6C)] | [removed: [Summary](#s45bfbed012fd44a7b856fce726bd399a)] [added: [Summary](#s4EEA2E7A524455F2B2F838A286E05D6C)] | [removed: [99](#s45bfbed012fd44a7b856fce726bd399a)] [added: [100](#s4EEA2E7A524455F2B2F838A286E05D6C)] |

10-K 1 a2017123110-k.htm 10-K

| | | | Emerging growth company o |

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 o

Forward-looking statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Dover's control.

| [PART I](#s90D94B6EA7EB55E68ECFC6B08B1AA839) | | |

| [PART II](#s86DE925020F55AD0AB3BCF1B7F45E741) | | |

| [PART IV](#sF1D30E5B0C835D819FA89AD5A95E3FAD) | | |

| [SIGNATURES](#sA12B7D91E15C5639959920E12B91E25B) | | [101](#sA12B7D91E15C5639959920E12B91E25B) |

| [EXHIBIT INDEX](#s9EB90202607B5EBDA0B50EE30C23E5D2) | | [103](#s9EB90202607B5EBDA0B50EE30C23E5D2) |

10-K 1 a2016123110-k.htm 10-K

| [PART I](#sEA2388BAE5BD5C8B93FD5E1E7FBC8DCB) | | |

| [PART II](#s039144B026EB5EF4A75509812021ABD9) | | |

| [PART IV](#s94BFC2A2DF6252B385C0B7680CF8C421) | | |

| [SIGNATURES](#s033E81EDF7D15752B8C95137F04FA65C) | | [100](#s033E81EDF7D15752B8C95137F04FA65C) |

| [EXHIBIT INDEX](#sA45D08FC08665FFA833CC1EF9644459A) | | [102](#sA45D08FC08665FFA833CC1EF9644459A) |

The number, type, location and size of the properties used by our operations as of December 31, [removed: 2016] [added: 2017] are shown in the following charts, by segment:

| Refrigeration & Food Equipment | [removed: 17] [added: 29] | | | [removed: 15] [added: 10] | | | [removed: 20] [added: 5] | | | [removed: 52] [added: 2] | | | [removed: 1,569] [added: 46] | | | [removed: 2,586] [added: 1] | | [added: | 10 | |]

| Engineered Systems | [removed: 40] [added: 41] | | | [removed: 53] [added: 50] | | | [removed: 42] [added: 40] | | | 2 | | | [removed: 137] [added: 133] | | | 1 | | | 11 | |

| Fluids | [removed: 18] [added: 13] | | | [removed: 25] [added: 27] | | | [removed: 32] [added: 20] | | | [removed: 4] [added: 7] | | | [removed: 79] [added: 67] | | | 1 | | | [removed: 10] [added: 15] | |

| Refrigeration & Food Equipment | [removed: 24 | | | 10] [added: 18] | | | [removed: 11] [added: 13] | | | [removed: 3] [added: 12] | | | [removed: 48] [added: 43] | | | [removed: 1] [added: 1,549] | | | [removed: 10] [added: 2,641] | |

[removed: We believe our] [added: Our] owned and leased facilities are well-maintained and suitable for our operations.

| Engineered Systems | 38 | | | 37 | | | 75 | | | 150 | | | 3,277 | | | 1,916 | |

| Fluids | 42 | | | 15 | | | 51 | | | 108 | | | 1,597 | | | 2,768 | |

| Energy | 54 | | | 42 | | | 47 | | | 143 | | | 2,721 | | | 1,503 | |

| Energy | 130 | | | 5 | | | — | | | 3 | | | 138 | | | 1 | | | 15 | |

| Energy | 43 | | | 44 | | | 65 | | | 152 | | | 2,425 | | | 1,455 | |

| Engineered Systems | 40 | | | 40 | | | 76 | | | 156 | | | 3,592 | | | 1,912 | |

| Fluids | 43 | | | 15 | | | 49 | | | 107 | | | 2,398 | | | 3,454 | |

| Energy | 139 | | | 4 | | | — | | | 3 | | | 146 | | | 1 | | | 15 | |

Our executive officers as of February [removed: 10, 2017,] [added: 9, 2018,] and their positions with Dover (and, where relevant, prior business experience) for the past five years, are as follows:

| Robert A. Livingston | | [removed: 63] [added: 64] | | Chief Executive Officer and Director (since December 2008) and President (since June 2008). |

| William T. Bosway | | [removed: 51] [added: 52] | | Vice President of Dover and President and Chief Executive Officer (since June 2016) of Dover Refrigeration & Food Equipment; prior thereto Group Vice President, Solutions & Technology (from May 2008 to June 2016) of Emerson’s Climate Technologies. |

| Patrick M. Burns | | [removed: 54] [added: 55] | | Senior Vice President, Strategy (since September 2016) of Dover; prior thereto Vice President, Corporate Strategy (from January 2014 to June 2016) of Johnson Controls; Vice President, Marketing, Strategy and M&A (from December 2012 to December 2013) of Danaher [removed: Corporation; Vice President & General Manager (from September 2011 to December 2012) of Danaher] Corporation. |

| Ivonne M. Cabrera | | [removed: 50] [added: 51] | | Senior Vice President, General Counsel and Secretary of Dover (since January 2013); prior thereto Vice President, Deputy General Counsel, and Assistant Secretary of Dover (from November 2012 to December 2012); prior thereto Vice President, Business Affairs and General Counsel of Knowles Electronics, LLC (from February 2011 to December 2012); prior thereto Vice President (from May 2010 to February 2011), Deputy General Counsel and Assistant Secretary (from February 2004 to February 2011) of Dover. |

| Brad M. Cerepak | | [removed: 57] [added: 58] | | Senior Vice President and Chief Financial Officer (since May 2011) of Dover; prior thereto Vice President and Chief Financial Officer (from August 2009 to May 2011) of Dover. |

| C. Anderson Fincher | | [removed: 46] [added: 47] | | Vice President (since May 2011) of Dover and President and Chief Executive Officer (since February 2014) of Dover Engineered Systems; prior thereto [removed: and] Executive Vice President (from November 2011 to February 2014) of Dover Engineered Systems; prior thereto Executive Vice President (from May 2009 to November 2011) of Dover Industrial Products. |

| Stephen Gary Kennon | | [removed: 57] [added: 58] | | Senior Vice President of Dover and President (since February 2016) of Dover Business Services; prior thereto Executive Vice President (from [removed: 2014)] [added: 2014] to February 2016) of Dover Engineered Systems; prior thereto President and Chief Executive Officer of Vehicle Services Group (2005 to 2014). |

| Jay L. Kloosterboer | | [removed: 56] [added: 57] | | Senior Vice President, Human Resources (since May 2011) of Dover; prior thereto Vice President, Human Resources (from January 2009 to May 2011) of Dover. |

| Sivasankaran Somasundaram | | [removed: 51] [added: 52] | | Vice President (since January 2008) of Dover and President and Chief Executive Officer (since August 2013) of Dover Energy; prior thereto Executive Vice President (from November 2011 to August 2013) of Dover Energy; prior thereto Executive Vice President (from January 2010 to November 2011) of Dover Fluid Management; President (from January 2008 to December 2009) of Dover's Fluid Solutions Platform. |

| William W. Spurgeon, Jr. | | [removed: 58] [added: 59] | | Vice President (since October 2004) of Dover and President and Chief Executive Officer (since February 2014) of Dover Fluids; prior thereto President and Chief Executive Officer (from August 2013 to February 2014) of Dover Engineered Systems; prior thereto President and Chief Executive Officer (from November 2011 to August 2013) of Dover Energy; prior thereto President and Chief Executive Officer (from July 2007 to November 2011) of Dover Fluid Management. |

| Russell E. Toney | | [removed: 47] [added: 48] | | Senior Vice President, Global Sourcing (since February 2015) of Dover; prior thereto General Manager, Market Development (from January 2013 to February 2015) of GE Energy [removed: Management; prior thereto Commercial Leader (from January 2011 to January 2013) of GE Energy Global Industries; prior thereto General Manager, Global Sourcing (from March 2007 to January 2011) of GE Energy Services.] [added: Management.] |

| Paul E. Goldberg | | [removed: 53] [added: 54] | | Vice President, Investor Relations (since November 2011) of Dover; prior thereto Treasurer and Director of Investor Relations (from February 2006 to November 2011) of Dover. |

| Anthony K. Kosinski | | [removed: 50] [added: 51] | | Vice President, Tax (since June 2016) of Dover; prior thereto Director, Domestic Tax (June 2003 to June 2016) of Dover. |

| James M. Moran | | [removed: 51] [added: 52] | | Vice President, Treasurer (since November 2015) of Dover; prior thereto Senior Vice President and Treasurer [removed: (June] [added: (from June] 2013 to August 2015) of Navistar International Corporation (“NIC”); prior thereto Vice President and Treasurer [removed: (2008] [added: (from 2008] to June 2013) of NIC; also served as Senior Vice President and Treasurer of Navistar, Inc. [removed: (June] [added: (from June] 2013 to August 2015) and Vice President and Treasurer of Navistar, Inc. [removed: (2008] [added: (from 2008] to June 2013); also served as Senior Vice President and Treasurer of Navistar Financial Corporation (“NFC”) [removed: (April] [added: (from April] 2013 to August 2015) and Vice President and Treasurer of NFC [removed: (January] [added: (from January] 2013 to April 2013). |

| Carrie Anderson | | 49 | | Vice President, Controller (since May 2017) of Dover; prior thereto Vice President and Chief Financial Officer (from February 2014 to May 2017) of Dover Engineered Systems; prior thereto Vice President and Chief Financial Officer (October 2011 to February 2014) of Dover's former Printing & Identification segment. |

| Girish Juneja | | 48 | | Senior Vice President and Chief Digital Officer (since May 2017) of Dover; prior thereto Senior Vice President/Chief Technology Officer and General Manager of the Marketplace Solutions Business of Altisource (from January 2014 to April 2017); prior thereto General Manager, Big Data Software Products and Chief Technology Officer, Datacenter Software of Intel Corporation (from January 2012 to January 2014). |

| Sandra A. Arkell | | 48 | | Vice President, Controller (since August 2015) of Dover; prior thereto Assistant Controller (2009 to August 2015) of Dover. |

| First Quarter | $ | [removed: 66.30] [added: 81.82] | | | $ | [removed: 52.65] [added: 76.34] | | | $ | [removed: 0.42] [added: 0.44] | | | $ | [removed: 74.50] [added: 66.30] | | | $ | [removed: 68.59] [added: 52.65] | | | $ | [removed: 0.40] [added: 0.42] | |

| Second Quarter | [removed: 72.08] [added: 83.71] | | | | [removed: 62.31] [added: 77.06] | | | | [removed: 0.42] [added: 0.44] | | | | [removed: 77.77] [added: 72.08] | | | | [removed: 69.40] [added: 62.31] | | | | [removed: 0.40] [added: 0.42] | | |

| Third Quarter | [removed: 74.53] [added: 92.43] | | | | [removed: 67.10] [added: 81.62] | | | | [removed: 0.44] [added: 0.47] | | | | [removed: 70.03] [added: 74.53] | | | | [removed: 55.99] [added: 67.10] | | | | [removed: 0.42] [added: 0.44] | | |

| Fourth Quarter | [removed: 77.13] [added: 101.44] | | | | [removed: 65.53] [added: 89.50] | | | | [removed: 0.44] [added: 0.47] | | | | [removed: 66.57] [added: 77.13] | | | | [removed: 56.51] [added: 65.53] | | | | [removed: 0.42] [added: 0.44] | | |

The number of holders of record of Dover common stock as of January [removed: 27, 2017] [added: 26, 2018] was approximately [removed: 19,309.][added: 19,739.]

In January 2015, the Board of Directors approved a standing share repurchase authorization, whereby the Company [removed: may] [added: could] repurchase up to 15,000,000 shares of its common stock over the following three years.

As of December 31, [removed: 2016,] [added: 2017,] the number of shares [removed: still] available for repurchase under the January 2015 share repurchase authorization was [removed: 6,771,458.][added: 5,711,776.]

[removed: ][added: Total Shareholder Returns]

This graph assumes $100 invested on December 31, [removed: 2011] [added: 2012] in Dover common stock, the S&P 500 index and a peer group index.

The [removed: 2016] [added: 2017] peer index consists of the following [removed: 32] [added: 33] public companies selected by Dover.

| 3M Company | Honeywell International Inc. | [removed: Snap-On] [added: Roper Industries] Inc. |

| Actuant Corp. | Hubbell Incorporated | [removed: SPX Corporation] [added: Snap-On Inc.] |

| AMETEK Inc. | IDEX Corporation | [removed: Teledyne Technologies Inc.] [added: SPX Corporation] |

| Amphenol Corp. | Illinois Tool Works Inc. | [removed: Textron] [added: Teledyne Technologies] Inc. |

| Carlisle Companies Inc. | Ingersoll-Rand PLC | [removed: The Timken Company] [added: Textron Inc.] |

| [removed: Corning Inc.] [added: Crane Company] | Lennox International Inc. | United Technologies Corp. |

| [removed: Crane Company] [added: Danaher Corporation] | Nordson Corp. | Vishay Intertechnology Inc. |

| [removed: Danaher] [added: Eaton] Corporation | Parker-Hannifin Corp. | Weatherford International PLC |

| | 2017 | | | | | | | | | | | | 2016 | | | | | | | | | | |

| | | | | | | | | | $ | 1.82 | | | | | | | | | | | $ | 1.72 | |

During the year ended December 31, 2017, the Company purchased 1,059,682 shares of its common stock under this authorization at a total cost of $105.0 million, or $99.11 per share.

In February 2018, the Company's Board of Directors approved a new standing share repurchase authorization, whereby the Company may repurchase up to 20 million shares of its common stock through December 31, 2020.

This share repurchase authorization replaces the January 2015 share repurchase authorization which expired on January 9, 2018.

The total number of shares purchased by month during the fourth quarter of 2017 were as follows:

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | |

| | Total Number of Shares Purchased | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Maximum Number (or Approximate Dollar Value in Thousands) of Shares that May Yet Be Purchased under the Plans or Program | |

| Period | | | | January 2015 Program | | | | | | | | |

| October 1 to October 31 | — | | | $ | — | | | — | | | 6,771,458 | |

| November 1 to November 30 | — | | | — | | | | — | | | 6,771,458 | |

| December 1 to December 31 | 1,059,682 | | | 99.11 | | | | 1,059,682 | | | 5,711,776 | |

| For the Fourth Quarter | 1,059,682 | | | $ | 99.11 | | | 1,059,682 | | | 5,711,776 | |

| Corning Inc. | Johnson Controls International PLC | The Timken Company |

| Emerson Electric Co. | Pentair PLC | |

| Flowserve Corporation | Regal Beloit Corp. | |

| Gardner Denver Holdings Inc. | Rockwell Automation Inc. | |

| | 2016 | | | | | | | | | | | | 2015 | | | | | | | | | | |

| | | | | | | | | | $ | 1.72 | | | | | | | | | | | $ | 1.64 | |

The Company did not purchase any shares under this program in 2016.

Total Shareholder Returns

| Eaton Corporation | Pentair PLC | |

| Emerson Electric Co. | Regal Beloit Corp. | |

| Flowserve Corporation | Rockwell Automation Inc. | |

| FMC Technologies Inc. | Roper Industries Inc. | |

| in thousands except per share data | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Revenue | | $ | [removed: 6,794,342] [added: 7,830,436] | | | $ | [removed: 6,956,311] [added: 6,794,342] | | | $ | [removed: 7,752,728] [added: 6,956,311] | | | $ | [removed: 7,155,096] [added: 7,752,728] | | | $ | [removed: 6,626,648] [added: 7,155,096] | |

| Earnings from continuing operations | | [removed: 508,892] [added: 811,665] | | | | [removed: 595,881] [added: 508,892] | | | | [removed: 778,140] [added: 595,881] | | | | [removed: 797,527] [added: 778,140] | | | | [removed: 650,075] [added: 797,527] | | |

| Net earnings | | [removed: 508,892] [added: 811,665] | | | | [removed: 869,829] [added: 508,892] | | | | [removed: 775,235] [added: 869,829] | | | | [removed: 1,003,129] [added: 775,235] | | | | [removed: 811,070] [added: 1,003,129] | | |

| Continuing operations | | $ | [removed: 3.28] [added: 5.21] | | | $ | [removed: 3.78] [added: 3.28] | | | $ | [removed: 4.67] [added: 3.78] | | | $ | [removed: 4.66] [added: 4.67] | | | $ | [removed: 3.58] [added: 4.66] | |

| Discontinued operations | | — | | | | [removed: 1.74] [added: —] | | | | [removed: (0.02] [added: 1.74] | | [removed: )] | | [removed: 1.20] [added: (0.02] | | [added: )] | | [removed: 0.89] [added: 1.20] | | |

| Net earnings | | [removed: 3.28] [added: 5.21] | | | | [removed: 5.52] [added: 3.28] | | | | [removed: 4.65] [added: 5.52] | | | | [removed: 5.86] [added: 4.65] | | | | [removed: 4.47] [added: 5.86] | | |

| Weighted average [added: basic] shares outstanding | | [removed: 155,231] [added: 155,685] | | | | [removed: 157,619] [added: 155,231] | | | | [removed: 166,692] [added: 157,619] | | | | [removed: 171,271] [added: 166,692] | | | | [removed: 181,551] [added: 171,271] | | |

| Continuing operations | | $ | [removed: 3.25] [added: 5.15] | | | $ | [removed: 3.74] [added: 3.25] | | | $ | [removed: 4.61] [added: 3.74] | | | $ | [removed: 4.60] [added: 4.61] | | | $ | [removed: 3.53] [added: 4.60] | |

| Discontinued operations | | — | | | | [removed: 1.72] [added: —] | | | | [removed: (0.02] [added: 1.72] | | [removed: )] | | [removed: 1.18] [added: (0.02] | | [added: )] | | [removed: 0.88] [added: 1.18] | | |

| Net earnings | | [removed: 3.25] [added: 5.15] | | | | [removed: 5.46] [added: 3.25] | | | | [removed: 4.59] [added: 5.46] | | | | [removed: 5.78] [added: 4.59] | | | | [removed: 4.41] [added: 5.78] | | |

| Weighted average [added: diluted] shares outstanding | | [removed: 156,636] [added: 157,744] | | | | [removed: 159,172] [added: 156,636] | | | | [removed: 168,842] [added: 159,172] | | | | [removed: 173,547] [added: 168,842] | | | | [removed: 183,993] [added: 173,547] | | |

| Dividends per common share | | $ | [removed: 1.72] [added: 1.82] | | | $ | [removed: 1.64] [added: 1.72] | | | $ | [removed: 1.55] [added: 1.64] | | | $ | [removed: 1.45] [added: 1.55] | | | $ | [removed: 1.33] [added: 1.45] | |

| Capital expenditures | | $ | [removed: 165,205] [added: 196,735] | | | $ | [removed: 154,251] [added: 165,205] | | | $ | [removed: 166,033] [added: 154,251] | | | $ | [removed: 141,694] [added: 166,033] | | | $ | [removed: 146,502] [added: 141,694] | |

| Depreciation and amortization | | [removed: 360,739] [added: 394,240] | | | | [removed: 327,089] [added: 360,739] | | | | [removed: 307,188] [added: 327,089] | | | | [removed: 278,033] [added: 307,188] | | | | [removed: 229,934] [added: 278,033] | | |

| Total assets | | [removed: 10,115,991] [added: 10,657,653] | | | | [removed: 8,606,076] [added: 10,115,991] | | | | [removed: 9,018,522] [added: 8,606,076] | | | | [removed: 10,788,895] [added: 9,018,522] | | | | [removed: 10,382,872] [added: 10,788,895] | | |

| Total debt | | [removed: 3,621,187] [added: 3,567,804] | | | | [removed: 2,754,777] [added: 3,621,187] | | | | [removed: 3,019,228] [added: 2,754,777] | | | | [removed: 2,815,715] [added: 3,019,228] | | | | [removed: 2,788,360] [added: 2,815,715] | | |

See Note 3 — [added: Acquisitions and Note 4 —] Disposed and Discontinued Operations in the Consolidated Financial Statements in Item 8 of this Form 10-K for additional information [removed: on disposed and discontinued operations and Note 2 — Acquisitions for additional information] regarding the impact of [added: 2017 and] 2016 [added: acquisitions] and [removed: 2015 acquisitions.][added: disposed and discontinued operations.]

| Earnings (losses) from discontinued operations | | — | | | | — | | | | 273,948 | | | | (2,905 | | ) | | 205,602 | | |

Certain amounts in prior years have been reclassified to conform to the current year presentation.

| [removed: [50](#sEA0EDCE1200450DD843CD076AC8FBF4A)] [added: [51](#sB563E180F6A75222A9F83C3EF2118728)] | [Management's Report on Internal Control Over Financial [removed: Reporting](#sEA0EDCE1200450DD843CD076AC8FBF4A)] [added: Reporting](#sB563E180F6A75222A9F83C3EF2118728)] |

| [removed: [51](#s4AD78C518E6B53CB8E92140D62E87E03)] [added: [52](#s1AE2D90685DA5EE090EE1AE64A6CE503)] | [Report of Independent Registered Public Accounting [removed: Firm](#s4AD78C518E6B53CB8E92140D62E87E03)] [added: Firm](#s1AE2D90685DA5EE090EE1AE64A6CE503)] |

| [removed: [52](#s3BB503668D85503F9F0D1E4D739B57EB)] [added: [54](#s6FECFE6941E3557C8EE05C740403181B)] | [Consolidated Statements of [removed: Earnings](#s3BB503668D85503F9F0D1E4D739B57EB)] [added: Earnings](#s6FECFE6941E3557C8EE05C740403181B)] |

| [removed: [53](#s0D66C0EAE5D0522B8E1B23BD0054A9CD)] [added: [55](#s839B0EB731EF514D805B835D08CDD288)] | [Consolidated Statements of Comprehensive [removed: Earnings](#s0D66C0EAE5D0522B8E1B23BD0054A9CD)] [added: Earnings](#s839B0EB731EF514D805B835D08CDD288)] |

| [removed: [54](#s9809A9D0CAFD5B799396694E1868E1D1)] [added: [56](#sF389434D1A825EB58ECCF49C43660EDE)] | [Consolidated Balance [removed: Sheets](#s9809A9D0CAFD5B799396694E1868E1D1)] [added: Sheets](#sF389434D1A825EB58ECCF49C43660EDE)] |

| [removed: [55](#sC55295F4565F52CDA282EA5CDD8B7CB3)] [added: [57](#s0AEFC1872E5857CB87E393705A1FEFEA)] | [Consolidated Statements of Stockholders' [removed: Equity](#sC55295F4565F52CDA282EA5CDD8B7CB3)] [added: Equity](#s0AEFC1872E5857CB87E393705A1FEFEA)] |

| [removed: [56](#s0FD01F698547550BB74854057A2460F5)] [added: [58](#s5EEBB844FF6251BB937D1D1877531280)] | [Consolidated Statements of Cash [removed: Flows](#s0FD01F698547550BB74854057A2460F5)] [added: Flows](#s5EEBB844FF6251BB937D1D1877531280)] |

| [removed: [57](#s6A3D0CD48EB75391902FE6E817034CB1)] [added: [59](#s172B7EFE80FB5D0DA6ECE06FA0E25989)] | [Notes to Consolidated Financial [removed: Statements](#s6A3D0CD48EB75391902FE6E817034CB1)] [added: Statements](#s172B7EFE80FB5D0DA6ECE06FA0E25989)] |

| [removed: [95](#sA2F48A7BC5B65B91B4F2BF574312DEC8)] [added: [95](#s3AACB70C7C9A51C7ABBA99ED163F01FA)] | [Financial Statement Schedule - Schedule II, Valuation and Qualifying [removed: Accounts](#sA2F48A7BC5B65B91B4F2BF574312DEC8)] [added: Accounts](#s3AACB70C7C9A51C7ABBA99ED163F01FA)] |

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2016.][added: 2017.]

Based on its assessment under the criteria set forth in Internal Control — Integrated Framework (2013), management concluded that, as of December 31, [removed: 2016,] [added: 2017,] 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, [removed: 2016] [added: 2017] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

In our opinion, the consolidated financial statements [removed: listed in the accompanying index] [added: referred to above] present fairly, in all material respects, the financial position of [removed: Dover Corporation and its subsidiaries at] [added: the Company as of] December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2016] [added: 2017] 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, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control - Integrated Framework [removed: 2013] [added: (2013)] issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: COSO.]

The Company's management is responsible for these [removed: financial statements and] [added: consolidated] financial [removed: statement schedule,] [added: statements,] for maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in [removed: Management's] [added: the accompanying Management’s] Report on Internal Control over Financial [removed: Reporting, appearing under Item 8.][added: Reporting.]

Our responsibility is to express opinions on [removed: these financial statements, on] the [added: Company’s consolidated] financial [removed: statement schedule,] [added: statements] and on the Company's internal control over financial reporting based on our [removed: integrated] audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

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 company; and (iii) provide [removed: 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.]

[removed: | February 10,] 2017 [removed: | | |]

| | [removed: Years] [added: Year] Ended December 31, | | | [removed: | | | | | | | |]

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Revenue | $ | [removed: 6,794,342] [added: 7,830,436] | | | $ | [removed: 6,956,311] [added: 6,794,342] | | | $ | [removed: 7,752,728] [added: 6,956,311] | |

| Cost of goods and services | [removed: 4,322,373] [added: 4,940,059] | | | | [removed: 4,388,167] [added: 4,322,373] | | | | [removed: 4,778,479] [added: 4,388,167] | | |

| Gross profit | [removed: 2,471,969] [added: 2,890,377] | | | | [removed: 2,568,144] [added: 2,471,969] | | | | [removed: 2,974,249] [added: 2,568,144] | | |

| Selling, general and administrative expenses | [removed: 1,757,523] [added: 1,975,932] | | | | [removed: 1,647,382] [added: 1,757,523] | | | | [removed: 1,758,765] [added: 1,647,382] | | |

| Operating earnings | [removed: 714,446] [added: 914,445] | | | | [removed: 920,762] [added: 714,446] | | | | [removed: 1,215,484] [added: 920,762] | | |

| Interest expense | [removed: 136,401] [added: 145,208] | | | | [removed: 131,676] [added: 136,401] | | | | [removed: 131,689] [added: 131,676] | | |

| Interest income | [removed: (6,759] [added: (8,502] | | ) | | [removed: (4,419] [added: (6,759] | | ) | | [removed: (4,510] [added: (4,419] | | ) |

| Other [removed: income,] [added: expense (income),] net | [removed: (7,930] [added: 7,034] | | [removed: )] | | [removed: (7,105] [added: (7,930] | | ) | | [removed: (5,902] [added: (7,105] | | ) |

| Gain on sale of businesses | [removed: (96,598] [added: (203,138] | | ) | | [removed: —] [added: (96,598] | | [added: )] | | — | | |

| Earnings before provision for income taxes and discontinued operations | [removed: 689,332] [added: 973,843] | | | | [removed: 800,610] [added: 689,332] | | | | [removed: 1,094,207] [added: 800,610] | | |

| Provision for income taxes | [removed: 180,440] [added: 162,178] | | | | [removed: 204,729] [added: 180,440] | | | | [removed: 316,067] [added: 204,729] | | |

| [removed: Earnings] [added: Net earnings] from continuing operations | [removed: 508,892] [added: 811,665] | | | | [removed: 595,881] [added: 508,892] | | | | [removed: 778,140] [added: 595,881] | | |

| Earnings [removed: (losses)] from discontinued operations, net | — | | | | [removed: 273,948] [added: —] | | | | [removed: (2,905] [added: 273,948] | | [removed: )] |

| Net earnings | $ | [removed: 508,892] [added: 811,665] | | | $ | [removed: 869,829] [added: 508,892] | | | $ | [removed: 775,235] [added: 869,829] | |

| Basic | $ | [removed: 3.28] [added: 5.21] | | | $ | [removed: 3.78] [added: 3.28] | | | $ | [removed: 4.67] [added: 3.78] | |

| Diluted | $ | [removed: 3.25] [added: 5.15] | | | $ | [removed: 3.74] [added: 3.25] | | | $ | [removed: 4.61] [added: 3.74] | |

| Earnings [removed: (loss)] per share from discontinued operations: | | | | | | | | | | | |

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 as of December 31, 2017 and 2016, and the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, 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, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Basis for Opinions

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.

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.

Definition and Limitations of Internal Control over Financial Reporting

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.

| February 9, 2018 | | |

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

| Net earnings | $ | 811,665 | | | $ | 508,892 | | | $ | 869,829 | |

| Settlement and curtailment impact | (2,462 | | ) | | — | | | | — | | |

| Cash and cash equivalents | $ | 753,964 | | | $ | 349,146 | |

| Net earnings | — | | | | — | | | | — | | | | 811,665 | | | | — | | | | 811,665 | | |

| Dividends paid | — | | | | — | | | | — | | | | (283,959 | | ) | | — | | | | (283,959 | | ) |

| Common stock acquired | — | | | | — | | | | (105,023 | | ) | | — | | | | — | | | | (105,023 | | ) |

| Balance at December 31, 2017 | $ | 256,992 | | | $ | 942,485 | | | $ | (5,077,039 | ) | | $ | 8,455,501 | | | $ | (194,759 | ) | | $ | 4,383,180 | |

| Net earnings | $ | 811,665 | | | $ | 508,892 | | | $ | 869,829 | |

| Gain on sale of businesses | (203,138 | | ) | | (96,598 | | ) | | — | | |

| Other | (4,120 | | ) | | — | | | | — | | |

A quantitative test is used to determine existence of goodwill impairment and the amount of the impairment loss at the reporting unit level.

If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

the business climate.

On December 22, 2017, the U.S. bill commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform Act”) was enacted, which significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries.

The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018.

The Tax Reform Act also provided for a one-time deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017.

The Global Intangible Low-Taxed Income ("GILTI") provisions of the Tax Reform Act require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets.

The Company expects that it will be subject to incremental U.S. tax on GILTI income beginning in 2018, due to expense allocations required by the U.S. foreign tax credit rules.

The Company has elected to account for GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the year ended December 31, 2017.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act.

The Company has recognized the provisional tax impacts related to deemed repatriated earnings and the benefit for the revaluation of deferred tax assets and liabilities, and included these amounts in its consolidated financial statements for the year ended December 31, 2017.

The final impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act.

In accordance with SAB 118 the financial reporting impact of the Tax Reform Act will be completed in the fourth quarter of 2018.

A worldwide program of property insurance covers the Company’s

The following standards, issued by the Financial Accounting Standards Board ("FASB"), will, or are expected to, result in a change in practice and/or have a financial impact to the Company’s Consolidated Financial Statements:

In August 2017, the FASB issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.

This ASU provides new guidance about income statement classification and eliminates the requirement to separately measure and report hedge ineffectiveness.

The entire change in fair value for qualifying hedge instruments included in the effectiveness will be recorded in other comprehensive income (OCI) and amounts deferred in OCI will be reclassified to earnings in the same income statement line item in which the earnings effect of the hedged item is reported.

The guidance is effective for interim and annual periods for the Company on January 1, 2019, with early adoption permitted.

| | |

| --- | --- |

In making its assessment of internal control over financial reporting as of December 31, 2016, management has excluded all companies acquired in purchase business combinations during 2016.

The Company is currently assessing the control environments of these acquisitions.

The following companies were acquired in purchase business combinations during 2016: Tokheim Group S.A.S., Fairbanks Environmental LTD, ProGauge, Alliance Wireless Technologies, Inc., Ravaglioli S.p.A.

Group and Wayne Fueling Systems, Ltd. These companies are wholly-owned by the Company and their revenue for the year ended December 31, 2016 represents approximately 5.1% of the Company’s consolidated total revenue for the same period and their assets represent approximately 5.8% of the Company’s consolidated total assets as of December 31, 2016.

In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

As described in Management’s Report on Internal Control Over Financial Reporting included in Item 8, management has excluded Tokheim Group S.A.S., Fairbanks Environmental LTD, ProGauge, Alliance Wireless Technologies, Inc., Ravaglioli S.p.A.

Group, and Wayne Fueling Systems Ltd. from its assessment of internal control over financial reporting as of December 31, 2016 because these companies were acquired by the Company in purchase business combinations during 2016.

We have also excluded these companies from our audit of internal control over financial reporting.

These companies are wholly-owned subsidiaries by the Company whose total assets and total revenues represent 5.8% and 5.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2016.

| /s/ PricewaterhouseCoopers LLP | | |

DOVER CORPORATION

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2013 | $ | 255,320 | | | $ | 871,575 | | | $ | (3,771,758 | ) | | $ | 7,954,536 | | | $ | 67,723 | | | $ | 5,377,396 | |

| Net earnings | — | | | | — | | | | — | | | | 775,235 | | | | — | | | | 775,235 | | |

| Dividends paid | — | | | | — | | | | — | | | | (258,487 | | ) | | — | | | | (258,487 | | ) |

| Separations of Knowles | — | | | | — | | | | — | | | | (1,396,502 | | ) | | (26,695 | | ) | | (1,423,197 | | ) |

| Common stock acquired | — | | | | (983 | | ) | | (600,094 | | ) | | — | | | | — | | | | (601,077 | | ) |

| Cash received from Knowles Corporation, net of cash distributed | — | | | | — | | | | 359,955 | | |

| Proceeds from exercise of share-based awards, including tax benefits | 8,431 | | | | 4,024 | | | | 20,337 | | |

| Cash and cash equivalents at beginning of year | 362,185 | | | | 681,581 | | | | 803,882 | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Recoverability of goodwill is measured at the reporting unit level and determined using a two-step process.

The second step of the goodwill impairment test, if needed, compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill.

The Company has not provided for any residual U.S. income taxes on unremitted earnings of non-U.S. subsidiaries as such earnings are currently intended to be indefinitely reinvested outside of the United States.

It is not practicable to estimate the amount of tax that might be payable if some or all of such earnings were to be repatriated, and the amount of foreign tax credits that would be available to reduce or eliminate the resulting U.S. income tax liability.

Reclassifications

In October 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.

This ASU requires entities to recognize the income tax consequences of many intercompany asset transfers at the transaction date.

The seller and buyer will immediately recognize the current and deferred income tax consequences of an intercompany transfer of an asset other than inventory.

The tax consequences were previously deferred until the asset is sold to a third party or recovered through use.

The FASB has also issued the following standards which clarify ASU 2014-09 and have the same effective date as the original standard: ASU 2016-20, Technical Corrections and Improvements to Topic 606, ASU No. 2016-12, Narrow-Scope Improvements and Practical Expedients, ASU 2016-10, Identifying Performance Obligations and Licensing and ASU 2016-08, Principal versus Agent Considerations.

The Company is also in the process of drafting an updated

In March 2016, the FASB issued ASU 2016-07, Simplifying the Transition to the Equity Method of Accounting (Topic 323), which eliminates the requirement to retrospectively apply equity method accounting when an entity increases ownership or influence in a previously held investment.

The Company early adopted this guidance at December 31, 2016, which requires prospective application of equity method accounting treatment when the Company obtains significant influence over an investee during the period.

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were effective as of December 31, [removed: 2016] [added: 2017] to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.